Over the last week, Ethereum crossed a major landmark – the $1000 mark. This was something which many Ethereum investors and enthusiasts were waiting for, for quite some time. 2017 was a big year for the company and 2018 appears even brighter as the testing of the Casper protocol has begun. It is expected that this testing of Casper is one of the reasons behind the $1000 milestone.
Moreover, considering that Ripple overtook Ethereum’s no. 2 position and crossed $100 Bn in the process – Ethereum was bound to rise. While it still is at the #3 position, Ethereum currently appears to be in the position of a stronger growth than compared to Ripple which has recently faced a small correction.
Let us now take a quick look at the Casper Protocol which is bound to bring in a number of changes in the way Ethereum as a technology functions.
What is Ethereum’s Casper Protocol
Ethereum’s Casper protocol will help change their Proof of Work algorithm to a Proof of Stake algorithm. The existing Proof of Work model is basically the same as various other cryptocurrencies such as Bitcoin – where the Ethereum blockchain is maintained by miners who mine for Ethereum by solving cryptographic puzzles using the computing power of their devices.
However this means that those with a higher mining power can mine more – also leading to environmental pollution. As it is, the energy consumed by miners across the world in one day is the same as consumed by the entire country of Oman in one day. Let us now look at the Proof of Stake model that Casper protocol brings in –
As defined by Blockexplorer, here’s how Proof of Stake model works: “Participants can become validates by locking up or ‘staking’ ether. Validators will take turns proposing and voting on blocks, and both the weight of their votes and the size of their rewards will hinge on the size of their stakes.”
However, the biggest problem with Proof of Stake algorithms like Casper is that people who have more Ether will be able to get mining rights to more blocks – thereby causing an unequal distribution. It will be interesting to see how the Casper protocol impacts Ethereum in the long run.