Ethereum Foundation 2018 preview: Vitalik Buterin Keynote

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Two days ago, Vitalik Buterin, known to most of us as the Canadian-Russian brains behind Ethereum, was in town to discuss the 2018 roadmap as well as plans for Ethereum.

The first part of his talk covered the Proof of Stake (PoS) and Casper the Friendly Finality Gadget. A quick visual guide below provides a simple explanation of the difference between Proof of Work and Proof of Stake.

The Proof of Work is a protocol that has the main goal of deterring cyber-attacks such as a distributed denial-of-service attack (DDoS) which has the purpose of exhausting the resources of a computer system by sending multiple fake requests. The Proof of Work is a requirement to define an expensive computer calculation, also called mining, that needs to be performed in order to create a new group of trustless transactions (the so-called block) on a distributed ledger called the blockchain. Proof of Work is not only used by the bitcoin blockchain but also by Ethereum and many other blockchains. Proof of Stake is a different way to validate transactions based and achieve the distributed consensus. In a distributed consensus-based on the Proof of Work, miners need a lot of energy. One Bitcoin transaction required the same amount of electricity as powering 1.57 American Households for one day. Developers are pretty worried about this problem, and the Ethereum community wants to exploit the Proof of Stake method for a more greener and cheaper distributed form of consensus.

Credits to Blockgeeks for the diagram below.

More technical information on the Casper protocol can be found here on the Ethereum Casper Note

 

Proof of Work vs Proof of Stake: Basic Mining Guide

 

The second part of the talk was spent largely on the Plasma Chain, which are Scalable Autonomous Smart Contracts. The Plasma Chain is a proposed framework which is scalable to represent a significant amount of decentralized financial applications worldwide. The general idea is that transactions happen off-chain on a “Plasma chain” by default and if the  Plasma chain at any point starts issuing invalid blocks, then users can all “exit” to the main chain. The exit priority queue mechanism ensures that all legitimate coins can exit before any fake coins do. It aims to provide the basic security properties of Plasma and leans heavily on users being willing to immediately exit as soon as they detect any kind of malfeasance.

The Plasma provides massive scaling, can scale to more than 1,000 transactions per second (TPS) and later versions can process TPS in the millions. The asset security in the Plasma has strong security guarantees, ensuring tokens cannot be double spent, withheld and can always be redeemed on the root chain.

An example of the Plasma Exit:

  1. Operator creates a block
  2. A new user deposits ETH into the Plasma chain
  3. New user sends a bunch of transactions to peer
  4. New user attempts to exit with all 5 PETH but fails
  5. Operator creates an invalid block and all users exit

The final takeaways of Plasma would involve storing minimal information on the chain as well as the advantages of threat recourse can be enough to prevent bad behaviour.

The full framework draft of the Plasma can be found here Plasma Chain