Category Archives: casper

Development Update — 13th Oct, 2017

Rocket Pool — Next Generation Ethereum Proof of Stake Pool

Happy Friday Rocket Poolers! With the RPL presale in the rear view mirror, efforts over the last few weeks have been concentrated on working on some core elements of Rocket Pool that will be required for its beta release hopefully on the Kovan testnet in the first quarter of 2018. Some of these core elements are the smart node service scripts and the design / functionality of the Rocket Pool beta UI.

Smart Nodes

Following up on the previous development update, more work has been done on the smart node service scripts. Rocket Pool isn’t only made of smart contracts, but also a network of nodes that can listen to the main smart contracts and receive instructions from those contracts. These scripts also allow the smart nodes to check in with the main contract on a regular basis to report on their server load which helps with load balancing users who stake with Rocket Pool + more.

Currently these beta scripts are functional and will run as a background service on a node. They will automatically run when the smart node is booted up and will wait for the Parity node software to initialise, they will then add event listeners to the Ethereum blockchain which allows for two way communication between the Rocket Pool smart contracts and themselves. The scripts will also process past events in case they incur downtime, so no instructions are missed in the case of hardware faults. Still more work to be done, but the initial beta versions of these scripts are promising and working well initially.

Rocket Pool Beta UI

Development has largely taken a backseat over the past few weeks as we near part one of the Metropolis hard fork, the Byzantium fork. With this upgrade to the Ethereum blockchain happening soon, it will also bring with it several new notable upgrades for smart contracts that will allow huge optimisations to Rocket Pool that I’ll discuss a bit further on. Waiting for these changes to come into play allowed for some initial design work on the beta version of the Rocket Pool user interface for users that wish to stake with Rocket Pool and earn interest on their ether holdings.

Rocket Pool beta menu style and interface.

The aim of the UI is to be big, simple, effective and attractive. A lot of Web3js apps using Metamask and ethereum browsers currently in the ecosystem are fairly clunky, so the aim is to make this UI as smooth and easy to use as possible. Here’s two screenshots of very early prototype designs of the beta style.

Selecting your Ethereum account you wish to stake with.

Not only have designs been undergoing work, there’s also been some initial work on the actual UI animations and JS framework that will power the UI. Currently this is Vue.js, similar to React in some ways, but very powerful and flexible when combined with a global Event Bus (I’m a huge fan of Pub/Sub frameworks and design concepts).

The blurred world map in the previous screenshots will also be an interactive live status of the Rocket Pool networks current capacity and node locations. Click to view animation.

Contract Updates

While a lot of the recent focus has been on the UI, a few but important contract updates have been made.

Rocket Pool was originally designed according to the Mauve Paper specs which specified that Casper would require some parameters that identified a node by a validation code (EVM byte code, like a mini contract). This has since been changed to a normal node account address for the first version of Casper, so Rocket Pool has been updated accordingly and is now compatible with this approach.

Byzantium HF

The first part of Ethereums next major upgrade, Metropolis; is set to begin in just a few days. This update brings with it several new features which will enable Rocket Pool to do across the board optimisations and even some contract restructuring.

Two of the most useful updates are some new opcodes which will now allow contracts to send variable length data between each other. Until now this wasn’t possible and often resulted in some inefficient methods to get the job done. This update will allow dapps that use a modular contract structure, as Rocket Pool does, to achieve much more efficiency. We’ll be looking at starting these optimisations in the near future.

Ethereum Brisbane — Anatomy of a dapp.

Rocket Pool got a special invitation to give a talk on our Dapp + Network to the Brisbane Ethereum Meetup group on the 4th October. Gave a high level overview of the differences betwen PoW/PoS as well as a rundown on what Rocket Pool is, how it works and some general info on decentralised apps.

Had a great turn out of 60-80 people and spent a good hour going over all Rocket Pools tech, how it was made and what it was made using. If anyone wants to view slides from the events, there’s a pdf version available here.

Contact Us

If you’re new to Rocket Pool or have any questions, we invite you to please checkout our website and contact us there or join our slack chat group to get all news and updates before they are posted anywhere else.


Development Update — 13th Oct, 2017 was originally published in Rocket Pool on Medium, where people are continuing the conversation by highlighting and responding to this story.

Vitalik Buterin Confirms Ethereum’s Proof of Stake 75 Percent Complete

At the Taipei Ethereum Meetup, Vitalik Buterin, one of the co-founders and lead developers of Ethereum, revealed that the development of a proof of stake protocol for the Ethereum network is 75 percent complete.

Prior to the announcement of Buterin, in a recent interview, Ethereum Foundation member and Ethereum co-founder Hudson Jameson released the foundation’s official roadmap for Ethereum development in 2017. The roadmap included the foundation’s plans of releasing the next version of Ethereum called Metropolis in three to six months and following that update with a switch of consensus protocol from proof of work to proof of stake.

Vitalik Buterin reaffirmed the Ethereum development roadmap laid out by Jameson and emphasized that Ethereum will most likely switch to a proof of stake protocol by the end of 2017. At the Taipei Ethereum Meetup, a community of over 500 members that focuses on the discussion of Ethereum and blockchain innovation, Buterin stated:

“We are working on a daemon that actually interacts with a Casper [smart] contract and sends transactions to it. That is the first part. The second stage is that we will write clients that are aware of Casper contracts.”

In regard to the development of Casper, Buterin stated that it is over three quarters completed.

What is Casper & Proof of Stake

Since 2015, Ethereum developers actively have dug into the development of Casper and a proof of stake (PoS) protocol. PoS and proof of work (PoW) are consensus protocols that allow stakeholders or miners to come to an agreement on various issues and verify transactions on the blockchain.

For instance, if the Bitcoin network is to agree upon a hard fork, miners have to signal their hash power to approve the fork. Also, in a proof of work protocol, miners have to allocate their hash power to verify and confirm transactions.

PoS is different in the way that it considers stakeholders as the majority and it does not utilize the hash power of miners to verify or confirm transactions. In a PoS protocol, miners do not exist. The largest stakeholders in the network are forced to play by the rules and verify transactions.

Ultimately, the economic issue of switching to Casper or a PoS protocol comes down to the incentives for stakeholders. How stakeholders are incentivized or benefited for verifying and confirming Ethereum transactions.

The Ethereum Foundation and Buterin’s perception of a PoS system is that everyone within the protocol is technically a miner and therefore unless they choose to lose their stake of Ether by playing against the rules, every user will verify and confirm transactions in a fair manner. Essentially, the foundation and its developers believe this is the ultimate decentralized governance system that increases participation of stakeholders of the network.

In an interview on January 18, Buterin stated that once completed, Casper will be tested across all seven clients of Ethereum in a testnet. If the testnet experiment of Casper is successful, developers intend to move it to production and release its final code by this year.

Currently, various blockchains including NXT, BitShares, and Peercoin operate on the PoS protocol. Some utilize a hybrid system between PoW and PoS to optimize their networks’ efficiency.

However, despite the success of the aforementioned blockchain networks, leading blockchain company and mining firm BitFury noted in its whitepaper that a PoS protocol is vulnerable to a wide range of attacks such as long-range attack, bribe attack, Coin Age accumulation attack and precomputing attack that could result as long-term issues for the network.

“Currently, there are several digital currencies implementing some form of proof of stake consensus including Peercoin, Nxt, Novacoin, BlackCoin, and BitShares. However, pure proof of stake approaches pose substantial security threats that cannot be recreated in proof of work systems (including Bitcoin). These problems are inherent to proof of stake algorithms, as proof of stake consensus is not anchored in the physical world (cf. with hashing equipment in proof of work),” BitFury’s white paper read.

Thoughts on ETH and BTC (03.2017)

This month (March, 2017) has been a roller-coaster ride for the digital currency market. The announcement of EEA (Enterprise Ethereum Alliance) a concerted effort between major firms like Microsoft, Accenture, JP Morgan, amongst others – led to a massive increase in the price of Ether (a near 400% 1-month return at the time of writing — making many early investors in the project rather happy.

Launch Members of the Enterprise Ethereum Alliance (EEA)
Quoting the EEA whitepaper, the Ethereum blockchain will help enterprises increase efficiency to:
“improve banking trade settlement latency, increase transparency in supply chains, and create peer-to-peer markets where intermediaries typically were previously needed between counterparties.”

Bitcoin

Simultaneously, Bitcoin’s steady growth YTD seemed to falter due to concerns over the community’s ability to effectively implement a scaling solution to reduce the growing transaction tx paid out to miners. Uncertainties around a bitcoin hard-fork have led to some on Reddit to call for “The Flippening” — a situation where interest and hashpower in the Ethereum blockchain would supersede that of Bitcoin.

In many ways, while the market for cryptocurrencies has exceed 22 Billion USD, it is fundamentally still a market-driven laboratory experiment, trying to solve problems like “the economic inefficiency of financial intermediaries”, “inability for two parties to hold funds in contractual escrow”, and issues associated with the integrity of private data.”

The race to create the blockchain standard, analogizes with the competition for technological standards in generations past (like VHS vs Betamax, for example). As with all technology wars, the winner will be decided through a mix of factors — like network effects, ease of adoption, and technological superiority.

The Current State of “Blockchain”

As we can see from the way bitcoin has stumbled, the key to success for blockchain will lie in its ability to effectively scale once its userbase begins to hit a critical mass. The kicker is that the network must effectively remain ‘decentralized’ — barriers to entry for computational mining must remain low in order to prevent the oligopilistic collusion which appears to be currently taking place.

Ethereum’s current ‘Proof-of-work’ hashing model, Ethash, differs from markedly from bitcoin’s SHA-256 model. It was specifically formalized to disincentivise the use of specialized ASICS which have taken over (and to some degree, centralized) the competitive market for bitcoin’s computational hash mining. Ethash accomplishes this goal by requiring 1–2 GB’s of RAM in order to fit the DAG while mining. This memory allocation thus disincentives specialized CPU’s and ASICS, thus disincentivising the creation of massive ‘mining pools’ like the data centers which have been built in China. Thus, PoW systems like Ethash promote GPU mining in an effort to keep the general hashrate decentralized and the computational hashing algorithm competitive.

However this proposition has not come without opposition, with technical insiders like Erik Vorhes stating on Twitter,

“Changing Bitcoin’s proof-of-work to prevent miners from mining is the most absurd and reckless thing I’ve heard in the scaling debate.In order for a blockchain to effectively scale to critical mass, it needs to rig the technical requirements of a blockchain in a way that is grounded in a cogent economic incentive model.”

Other scaling options have been proposed like “Segregated Witness” (SegWit) which keeps block size at 1MB but removes transaction data from block and places it in a merkle derivative. An important facet of SegWit is that enables off-chain state transfers like Lightning Network, which would bolster the market for microtransactions.

Another proposal centers around the “Bitcoin Unlimited” (BU) chain fork— which would increase scalbility at the expense of decentralization by enacting a dynamic blocksize determined by the market. The main criticism of BU is that larger blocksize encourages consolidation and centralization of mining pools, effectively turning bitcoin into a “Paypal 2.0"

Key innovation: Proof-of-Stake

Rather then rely on a resource intensive and energy inefficient PoW system the Ethereum blockchain plans to migrate to a PoS system, formalized as through the Casper outline. Currently, PoS acts as a relatively untested ‘market-experiment’ where success relies on the correct formalization of monetary and allocation incentives. A key aspect of Casper

In Casper, If p% of the block validators actively participate in the consensus game, then they earn f(p) ≤ p% of the revenues they would earn if 100% of the validators were participating, for some increasing function f.

Key Concerns for PoS:
1. “Nothing-at-stake”– Casper implements ‘Slasher’ in order to solve this incentive problem through “rule-dependent” security deposits. With Slasher, you lose your block reward if you sign blocks at the same height on two forks (reward payout described above).

2. “Synchronicity Problem”– how do we know nodes are synchronized? Casper uses a loop of messages (code-bits) transferred across nodes to create a “heartbeat”. This is markedly different then the ‘timestamp’ approach used by other blockchains.

3. “Byzantine Generals Problem”– Casper, like other blockchains, is 50%-fault tolerant. It uses economic incentives to encourage consensus in the presence of ‘bad faith actors’

4. “Bribing attacker model — “By bribing game participants you can modify a game’s payoffs, and through this operation change its Nash Equilibriums.” Vlad Zamfir

Future Opportunities
Regardless of which blockchain becomes the de-facto standard for Web 3.0 identity, the winner(s) would be great candidates to be integrated with a mobileOS.

Same as any other network, Ethereum needs fully-fleshed out use-cases in the form of dApps (which replace the current ‘wallet-stack’ below) in order to showcase its ‘value-add’.

  1. Application Goals — Why do people use it? What value does it add.
  2. Network Growth Effects — How is the value added synergistic, what encourage armies of evangelists to push others into the adoption-plunge?
Digital Wallet Stack (courtesy A16Z)

In between each block in the above “wallet-stack” is a theoretical wall, where the passing requires a payment in the form of either value or user information. The blockchain ecosystem and its decentralized applications have the potential to ‘flatten’ this stack and remove ‘gatekeepers’ which unnecessarily suck value and economic surplus away from the user

If a blockchain standard can create a successful encrypted identity standard, integration with Mobile would make a lot of sense, especially considering the hooks of Web 2.0 Identity Standards by networks like Facebook.

In my next post, I will consider future growth avenues for mobile integration and tokenization, using ‘Wake Coin’ as an example for a theoretical framework for tokenization within the context of the university system.

Thoughts on ETH and BTC (03.2017)

This month (March, 2017) has been a roller-coaster ride for the digital currency market. The announcement of EEA (Enterprise Ethereum Alliance) a concerted effort between major firms like Microsoft, Accenture, JP Morgan, amongst others – led to a massive increase in the price of Ether (a near 400% 1-month return at the time of writing — making many early investors in the project rather happy.

Launch Members of the Enterprise Ethereum Alliance (EEA)
Quoting the EEA whitepaper, the Ethereum blockchain will help enterprises increase efficiency to:
“improve banking trade settlement latency, increase transparency in supply chains, and create peer-to-peer markets where intermediaries typically were previously needed between counterparties.”

Bitcoin

Simultaneously, Bitcoin’s steady growth YTD seemed to falter due to concerns over the community’s ability to effectively implement a scaling solution to reduce the growing transaction tx paid out to miners. Uncertainties around a bitcoin hard-fork have led to some on Reddit to call for “The Flippening” — a situation where interest and hashpower in the Ethereum blockchain would supersede that of Bitcoin.

In many ways, while the market for cryptocurrencies has exceed 22 Billion USD, it is fundamentally still a market-driven laboratory experiment, trying to solve problems like “the economic inefficiency of financial intermediaries”, “inability for two parties to hold funds in contractual escrow”, and issues associated with the integrity of private data.”

The race to create the blockchain standard, analogizes with the competition for technological standards in generations past (like VHS vs Betamax, for example). As with all technology wars, the winner will be decided through a mix of factors — like network effects, ease of adoption, and technological superiority.

The Current State of “Blockchain”

As we can see from the way bitcoin has stumbled, the key to success for blockchain will lie in its ability to effectively scale once its userbase begins to hit a critical mass. The kicker is that the network must effectively remain ‘decentralized’ — barriers to entry for computational mining must remain low in order to prevent the oligopilistic collusion which appears to be currently taking place.

Ethereum’s current ‘Proof-of-work’ hashing model, Ethash, differs from markedly from bitcoin’s SHA-256 model. It was specifically formalized to disincentivise the use of specialized ASICS which have taken over (and to some degree, centralized) the competitive market for bitcoin’s computational hash mining. Ethash accomplishes this goal by requiring 1–2 GB’s of RAM in order to fit the DAG while mining. This memory allocation thus disincentives specialized CPU’s and ASICS, thus disincentivising the creation of massive ‘mining pools’ like the data centers which have been built in China. Thus, PoW systems like Ethash promote GPU mining in an effort to keep the general hashrate decentralized and the computational hashing algorithm competitive.

However this proposition has not come without opposition, with technical insiders like Erik Vorhes stating on Twitter,

“Changing Bitcoin’s proof-of-work to prevent miners from mining is the most absurd and reckless thing I’ve heard in the scaling debate.In order for a blockchain to effectively scale to critical mass, it needs to rig the technical requirements of a blockchain in a way that is grounded in a cogent economic incentive model.”

Other scaling options have been proposed like “Segregated Witness” (SegWit) which keeps block size at 1MB but removes transaction data from block and places it in a merkle derivative. An important facet of SegWit is that enables off-chain state transfers like Lightning Network, which would bolster the market for microtransactions.

Another proposal centers around the “Bitcoin Unlimited” (BU) chain fork— which would increase scalbility at the expense of decentralization by enacting a dynamic blocksize determined by the market. The main criticism of BU is that larger blocksize encourages consolidation and centralization of mining pools, effectively turning bitcoin into a “Paypal 2.0"

Key innovation: Proof-of-Stake

Rather then rely on a resource intensive and energy inefficient PoW system the Ethereum blockchain plans to migrate to a PoS system, formalized as through the Casper outline. Currently, PoS acts as a relatively untested ‘market-experiment’ where success relies on the correct formalization of monetary and allocation incentives. A key aspect of Casper

In Casper, If p% of the block validators actively participate in the consensus game, then they earn f(p) ≤ p% of the revenues they would earn if 100% of the validators were participating, for some increasing function f.

Key Concerns for PoS:
1. “Nothing-at-stake”– Casper implements ‘Slasher’ in order to solve this incentive problem through “rule-dependent” security deposits. With Slasher, you lose your block reward if you sign blocks at the same height on two forks (reward payout described above).

2. “Synchronicity Problem”– how do we know nodes are synchronized? Casper uses a loop of messages (code-bits) transferred across nodes to create a “heartbeat”. This is markedly different then the ‘timestamp’ approach used by other blockchains.

3. “Byzantine Generals Problem”– Casper, like other blockchains, is 50%-fault tolerant. It uses economic incentives to encourage consensus in the presence of ‘bad faith actors’

4. “Bribing attacker model — “By bribing game participants you can modify a game’s payoffs, and through this operation change its Nash Equilibriums.” Vlad Zamfir

Future Opportunities
Regardless of which blockchain becomes the de-facto standard for Web 3.0 identity, the winner(s) would be great candidates to be integrated with a mobileOS.

Same as any other network, Ethereum needs fully-fleshed out use-cases in the form of dApps (which replace the current ‘wallet-stack’ below) in order to showcase its ‘value-add’.

  1. Application Goals — Why do people use it? What value does it add.
  2. Network Growth Effects — How is the value added synergistic, what encourage armies of evangelists to push others into the adoption-plunge?
Digital Wallet Stack (courtesy A16Z)

In between each block in the above “wallet-stack” is a theoretical wall, where the passing requires a payment in the form of either value or user information. The blockchain ecosystem and its decentralized applications have the potential to ‘flatten’ this stack and remove ‘gatekeepers’ which unnecessarily suck value and economic surplus away from the user

If a blockchain standard can create a successful encrypted identity standard, integration with Mobile would make a lot of sense, especially considering the hooks of Web 2.0 Identity Standards by networks like Facebook.

In my next post, I will consider future growth avenues for mobile integration and tokenization, using ‘Wake Coin’ as an example for a theoretical framework for tokenization within the context of the university system.

Ethereum Takes the Stage As Devcon2 Begins

Like any good movie, mission impossible music metaphorically came on last night around midnight London time, just hours before the opening of Devcon2, as Geth nodes – used by most of ethereum’s network – suddenly started crashing at block 2,283,416. Some villain, who presumably just wanted to see the world burn, had coded a smart […]

The post Ethereum Takes the Stage As Devcon2 Begins appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Casper May Cause Centralized Staking By Rich Ethereum Holders

TheMerkle_Ethereum Casper Centralized Staking

The Ethereum developers have unveiled some more details regarding the Casper release. As part of this release, Ethereum will also transition from proof-of-work to proof-of-take. Securing the network at that time will be of the utmost importance, as PoS is inherently more prone to network attacks compared to PoW. But it looks like there will be some other issues regarding Casper that need to be addressed.

Ethereum’s Casper Is Causing Some Debates

On paper, the transition from proof-of-work to proof-of-stake will be a significant milestone for Ethereum. It is not financially viable to keep a cryptocurrency in an indefinite proof-of-work state, as that would only lead to inflationary concerns. Ethereum will become proof-of-take only shortly, and the new Casper release will be a critical part of this transition.

But there are some twists to this whole concept which have some community members concerned. When Casper is released, all of the stake held in user wallets will act as bets. That means that earning a stake is still possible, but it will also be possible some stakers will see their balances shrink over time. Such a strange scenario has never occurred in the cryptocurrency world before, and it is only reasonable people are concerned regarding their holdings.




Staking pools can be created, where pool owners can ‘gamble” with other people’s money. At this time, it remains unclear if there will be specific boundaries to ensure no erratic gambling can take place. At the same time, this creates a significant opportunity for staking pool owners to make a ton of money while managing other people’s assets. All of this sounds a lot like what banks around the world are doing with consumer funds these days.

Assuming there would be some form of countermeasures to prevent staking pools from becoming too large, another issue will arise. Some community members feel Casper will lead to centralized staking by the rich. To be more precise, without large staking pools, one needs to be rich to have some competitive edge over other people trying to take on the network.

It is important to keep in mind nothing about Casper has been set in stone yet, and a lot of things may still change in the coming months. While it is commendable to see the developers look at PoS in a very different manner, this concept will have to be fleshed out a lot more before deciding on a course of action.

Image credit 1

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Researchers Claim Bitcoin’s Blockchain Can Be Secured Even if 51% of Miners Are Malicious

One of the fundamental assumptions of blockchains, whether public or private, is that 51% of actors, especially miners, are honest. Logically, the more actors there are, the more the assumption stands. However, numerous bitcoin developers, including Gregory Maxwell, Peter Todd, Luke-Jr and others, have stated that bitcoin mining is centralized in two or three individuals. […]

The post Researchers Claim Bitcoin’s Blockchain Can Be Secured Even if 51% of Miners Are Malicious appeared first on CCN: Financial Bitcoin & Cryptocurrency News.