Matthew BeedhamEditor, SHIFT by TNW
Matthew is the editor of SHIFT. He likes electric cars, and other things with wheels, wings, or hulls. Matthew is the editor of SHIFT. He likes electric cars, and other things with wheels, wings, or hulls.
Ethereum co-founder Vitalik Buterin recently took to Reddit to discuss some of the biggest roadblocks ahead the network’s transition to Proof-of-Stake (PoS).
According to Buterin, there are currently four major hurdles ahead of implementing Proof-of-Stake. Here they are:
1. Having lower than expected participation rates in validating
2. Stake pooling becoming too popular
3. Sharding turning out more technically complicated than expected
4. Running nodes turning out more expensive than expected, leading to (1) and (2)
Buterin’s primary concern lies in keeping Ethereum’s blockchain decentralized, while also ensuring a low entry barrier for network validators – or put otherwise, making sure the cost of running a node doesn’t become prohibitively expensive.
“A lot of Proof-of-Stake systems tend to be more explicitly organized around the idea that there should only be a couple of dozen or a couple of hundred nodes,” Buterin said an interview recently. “I use my own opinions when designing the part of the Ethereum protocol I do myself.”
If validators refuse adopting the new PoS implementation and validation rates go down, running nodes on Ethereum could become prohibitively expensive, Buterin explained.
Moving towards a Proof-of-Stake model will come with “trade-offs,” Buterin acknowledged in an interview recently. But Ethereum’s approach is focused on “emphasizing decentralization, enforcing security deposits for stakers, penalties for rule breakers, and keeping nodes cheap to run,” he added.
A recap on Ethereum and PoS
Ethereum is exploring PoS as a potential strategy to combat growing scaling woes. It aims to help the blockchain platform deliver faster “block times” – the time it takes to produce one block.
PoS isn’t the only strategy being explored, though. Back in February this year, Buterin hinted that Ethereum was looking to test its “sharding” protocols as part of its attempts fix scaling issues.
In preparation for those updates, Ethereum recently implemented two software forks, more commonly known as Constantinople and St. Petersburg. Despite numerous delays to fix security issues, these updates supposedly laid the technical groundwork for future Ethereum scaling projects.
The main update implemented reduced Ethereum block rewards from 3 ETH to 2 ETH per block. Other changes implemented in the hard fork were said to serve as “maintenance and optimization” updates to improve the blockchain’s efficiency.
Indeed, Ethereum is acutely aware of the need to continue to develop and scale its blockchain. One potentially contentious strategies though, is moving from a Bitcoin-like Proof-of-Work algorithm to a Proof-of-Stake type protocol.
Another strategy Ethereum is exploring to address scaling concerns is to use a Programmatic Proof-of-Work model, which is sort of blend between PoW and PoS.
It aims to reduce the advantages ASIC miners have over off-the-shelf GPUs. In principle this should reduce the wasteful and continual manufacturing of ASIC machines; some believe this should in principle keep the cost of launching and running a node lower than it would be if everyone needed specialized mining hardware.
Lower costs to entry mean greater decentralization, a good thing according to Buterin. “Those [PoS] systems can be faster and have faster block times but on the other hand they can fall into centralization concerns.”
Indeed, Ethereum’s move to ProgPoW or PoS-based model will come with its own trade-offs. How these will manifest and how the community will rationalize them still remains to be seen, for now.
Want to find out more about cryptocurrencies and blockchain technology? Check out our Hard Fork track at TNW 2019!
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