Wondering what would be the implications of casper update for the Ethereum network? This is the main topic we will be looking into in the following sections so that it becomes easier for you to understand what this update is about.
What is the casper hardfork and its implications for Ethereum?
Before we talk about Casper update, it will be important to mention a few things about CryptoKitties, an Ethereum based game which became quite popular in December and attracted a lot of traffic. The result? This game was able to totally overwhelm Ethereum network for almost 24 hours.
In this context several improvements have been planned which will help Ethereum reach a point where it will be able to manage a lot of transactions on a per second basis, similar to the way Visa network is able to but in a very decentralized as well as cheaper manner.
The first step towards achieving this goal is the Casper update and a test network has been released which will help in accomplishment of this goal.
After its complete integration with Ethereum, Casper will be able to turn Ethereum into a Proof of Stake to a Proof of Work platform so that everything remains fast even when the network continues to grow.
What does Proof of Work mean?
In Proof of Work system, miners are required for solving complex algorithms for supporting consensus as well as for keeping the network running.
On the other hand, when the Proof of Stake system is used, stakers will replace miners. The job of stakers will be to stake all of their coins in special wallets and in return they would be getting dividends out of network fees on the basis of amount of ETH they are able to stake.
However, it will be necessary for stakers to maintain a certain amount of ETH before it becomes possible for them to get associated in the consensus. How much ETH a staker should have is not certain yet, however, according to Vitalik Buterin, it will be about 1,000 to start with.
The Benefits of Casper