Originally posted on 26, Nov, 2018 at Unitimes.
The Ethereum Team in charge of continously enhancing the blockchain platform are comprised of leading developers. Unitimes invited young talented PoS developer Karl Floersch to talk about Ethereum’s Casper initiative and the development of Proof-of-Stake algorithms.
Let’s start with an interesting question: What do you do in your spare time?
My two main activities outside of Casper are meditation and freestyle rapping. I was raised Hindu and so meditation has been a part of my life since I was young. I also grew up in New York City so Hip Hop played a key role in my development. So when I have time, I explore consciousness through meditation and express how I’m feeling with a freestyle.
Why did you choose to dip your toes in Ethereum at the start of your career?
I initially choose Ethereum because of its developer focus. While I was a huge supporter of peer-to-peer technology, I always shied away from Bitcoin because of the trader culture. When I learned about Ethereum, and saw that the focus wasn’t money but instead changing how the internet and broader society is structured, I immediately dove in.
Why did you choose to work on Casper instead of other exciting opportunities?
There are a huge number of exciting fields and projects to work on. However, I believe Ethereum has the unique potential to redistribute wealth and influence on a global scale. To realize that potential, Ethereum must fulfill its original mandate to create a secure, scalable, and decentralized smart contract blockchain. Achieving this goal requires moving to a more cost efficient & safe consensus mechanism than its current one, proof of work. The replacement is Casper, Ethereum’s proof of stake protocol. So I figure working on one of Ethereum’s hard dependencies is probably a good use of my time!
Some developers left the Ethereum Team and built their own projects on the Ethereum blockchain platform. How do you feel about that? Do you have plans to build your own blockchain application one day?
Moving from working on Ethereum the protocol to an application on Ethereum is a very natural step. Ethereum will serve as the base layer for lots of decentralized applications (dapps)–from derivatives, to decentralized autonomous organizations (DAOs), to Cryptokitties and everything in between. There are so many opportunities that I can’t pick my favorite one! But for all of these dapps to scale, a lot of fun research needs to be done.
Until the research is mostly complete and Ethereum is secure and scalable, my focus will remain contributing to the core protocol. However, while I contribute I will be actively promoting cryptoeconomic research, education, and ethics. For instance, I am in talks with community members to create resources on where to start as someone new to cryptoeconomics. The crypto space is growing exponentially and so it is critical we spread the right ideas. This means spreading the understanding of what makes Ethereum special, and how we have a responsibility to use this new technology for good.
In simple terms, how does Casper work on Ethereum?
Ethereum is the internet’s self-governance platform. It allows developers to program incentives. These incentives govern the way we interact with one another.
Casper is a proof of stake protocol which will replace proof of work on the Ethereum network. Casper will secure Ethereum. It ensures that the network remains open to all, and that the smart contracts deployed to the network are executed exactly as defined.
What is your design philosophy when it comes to Casper?
Casper’s design philosophy has developed naturally from the exchange of ideas between Vitalik, Vlad, and many other researchers. Some of the core principles that have emerged are:
- Economics is key. You cannot reason about public blockchain consensus protocols without reasoning about economics.
- Robustness is a must. Casper must be able to thrive in an extremely adversarial environment.
- Clients-first. We are building Casper for the averageuser, not for miners, exchanges, or crypto whales.
Our design philosophy differs from a number of other projects because we always consider the economic power relations between actors in our system. It isn’t just about building the fastest chain, but instead about balancing trade offs which will ensure the long-term security and stability of the system. With a network worth billions of dollars, we have to carefully consider every single choice we make–there is no room for mistakes.
What are the advantages and disadvantages of Proof–of–Work (PoW) and Proof–of–Stake (PoS)?
Proof–of–Work (PoW) Advantages:
- Conceptually very simple
- Has been securing the Bitcoin blockchain well since 2008
Proof–of–Work (PoW) Disadvantages
- Burns huge quantities of energy–Bitcoin currently burns more energy than 159 countries.
- Centralization around mining equipment & energy sources–large mining farms benefit from economies of scale.
- Lacks finality–history can always be reverted. Even if it gets harder and harder to do so as block depth increases, it is still possible.
Proof–of–Stake (PoS) Advantages:
- Energy efficient–almost no energy waste when compared to PoW mining.
- Provides finality–smart contracts know when transactions can never be reverted.
- Fine-grained economic control–more flexibility regarding how to reward and penalize validators because votes on the main chain are made in coins (intrinsic scarce resource) instead of hashrate (extrinsic scarce resource).
Proof–of–Stake (PoS) Disadvantages:
- Fine-grained economic control–because we have more flexibility, deciding the right parameters is more difficult.
- More subjective–to login to a PoS network you need to explicitly choose a fork with information outside of the protocol definition, unlike PoW, where you just need to know the PoW algorithm.
- Less battle-tested than PoW–public PoS blockchains have been running since 2013, but none have had as much value to protect as Bitcoin’s PoW blockchain.
There is a huge discussion among the blockchain community regarding Ethereum and scalability. Can you give some insights into how Ethereum is scaling?
Vitalik has given a number of talks which describe different ways to scale blockchains. One method to scale a blockchain is simply by scaling up the computing power required to run that blockchain. You can achieve thousands of transactions per second with ten gigabyte blocks and super short blocktimes! However, this means that to run a full node you’d probably need to own a well connected datacenter–not good for decentralization.
Ethereum has committed to keeping the hardware and connectivity requirements as low as possible. One should be able to run a full node on a standard laptop with a moderate internet connection. To do this, we need to split up the blockchain intelligently into sub-chains called shards, each one with reasonable compute requirements.
Designing a sharding solution is challenging and there’s a lot of decisions which go into how we split each shard up. However, the fundamental problems, like the data availability problem, have been tackled. Now we are just deciding on design directions, trade offs, and implementing!
Which industries are most suitable for blockchain applications and use cases?
Wherever there needs to be a single source of truth, blockchains can be used. This means that blockchain technology can be used in almost every field & industry. Some examples of single sources of truth are:
· Currency–single source of truth regarding who has how much money.
· Music streaming–single source of truth regarding which titles & artists map to which music files.
· Decision making–single source of truth regarding how to make new group decisions and which decisions have been made (DAOs).
It gets even more interesting when you combine these constructions. For instance, you can create a DAO which curates a music streaming service that makes decisions based on votes from participants, weighted by a token which represents ownership shares. With a technology which affects something as fundamental as “truth”, it isn’t hard to imagine blockchains touching every sector in society.
What is your take on Bitcoin’s frequent hard forks? In your opinion, how would Bitcoin look like several years down the road?
I think Bitcoin’s hard forks are great. However, it is important to note that these hard forks are a recent phenomenon, and only came about after years of brutal debate between different communities regarding Bitcoin’s future. Thankfully these communities have now been able to separate formally, most notably during the Bitcoin Cash hard fork.
One important takeaway from this costly separation is that not establishing a clear roadmap at the genesis of a decentralized community can lead to a lot of conflict. Thankfully, Ethereum avoided this cost by establishing Casper and Sharding at the genesis of the project, making them uncontroversial upgrades.
I think Bitcoin’s future is a bright one. The original Bitcoin chain has finally established its focus on the store of value use case, which is reasonable. That said, this leaves a lot of room for Ethereum to serve as the backbone for the decentralized applications which I think could see mainstream adoption and hopefully change the world–for the better.
What do you think of ICOs projects? From a technical perspective, what are the key success factors (Success DNA) that we should look out for ICO?
I would avoid most ICO projects. The token use cases which I have seen are often uninspired and uncompelling. However, this is not entirely the fault of the project’s founders! The design space of cryptoeconomics and token mechanisms is very immature. There is no established literature on how to design and analyze these tokens.
Without a clear path to learning these cryptoeconomic concepts, it is difficult for someone new to the space to determine the promise of a project. That said, one general heuristic is: simplicity is key. If a mechanism cannot be expressed in a paragraph, and doesn’t intuitively make sense, then it probably won’t work. Eventually complex mechanisms will be able to be created, but that requires foundational cryptoeconomic concepts and design patterns which are currently not established.
In your opinion, what is one biggest challenge that Ethereum currently faces?
In 2017, cryptocurrency has hit the mainstream. There are a lot of expectations that blockchains can run a new wave of decentralized applications. However, in their current state blockchains are not nearly scalable enough to support this decentralized ecosystem.
The biggest challenge for Ethereum over the next year is to provide a clear path for scaling applications while maintaining decentralization. This means providing core Plasma implementations, educational resources around creating new Plasma chains, and also promoting projects which are adopting Plasma. This is already starting with the Plasma implementers kickoff call this week. Further work here is critical and will be one of my main focuses over the next year.
Where do you see Ethereum in 5 years?
The next four years of Ethereum’s development is mostly specced out. In four years we should have Casper, Plasma, sharding, account abstraction, stateless clients, and much more. This should be enough to satisfy Ethereum’s original objective. After these changes are in place, there will likely be no more large scale overhauls to the protocol and instead just incremental improvements.
What do you think of consortium chains?
Consortium chains are often hamstrung by political problems and unproductive incentives. It can be valuable for companies to declare that they have joined a consortium because it signals that they are forward thinking. However, actually balancing the diverse interests of all the consortium players is a huge challenge. This is why you see many announcements of new consortiums, but few consortium chains actually in production.
On the other hand, the public blockchain space has a “build it and they will come” mentality which is often more effective than creating private consortium chains. This is because it sidesteps many of the complex governance problems that come with coordinating competing organizations. Instead of appeasing entrenched interests, you create a public system with aligned incentives. Once the system is live organizations can voluntarily join. Whether you are building a consortium chain, public blockchain, or DAO you cannot compromise on aligning incentives.
Blockchain is going more and more mainstream now. How do you think this will impact society as a whole?
“Blockchains allow us to program money. When we can program money, we can program incentives. When we can program incentives, we can program people.” -Mike Golden
Programming incentives is a new superpower given to every developer. We have democratized trust, and lowered the cost of human-to-human coordination. This is a huge step forward. It’s now up to the developers in the blockchain space to use their superpowers for good. We can centralize wealth by ICO-ing to raise hundreds of millions of dollars, or we can promote inclusion with self-sovereign identities and more. This is a unique opportunity to impact change. Let’s use it for good.
Again, note that this article was originally posted on 26, Nov, 2018 at Unitimes. Some of the answers may have gone out. Stay tuned for our latest talks!
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