Why do they want to leave Proof of Work? Which problems do they want to solve? Is PoS more or less democratic than PoW? Why is introducing PoS hard and risky? After a clear explanation of Pow and poS as general solution to bizantina problem in distributed trust less p2p systems, we will try to explore these themes giving something to reflect and hints to answer these question yourself.

1. Title: Why Ethereum and other blockchains are
going to Proof of Stake?
Author: Stefano Maestri
Milan | November 29 - 30, 2018

2. Who is Stefano?
● A young enthusiast open source developer
● Red Hat Principal software engineer and Associate Manager
● https://www.linkedin.com/in/maeste/
● https://twitter.com/maeste
● https://github.com/maeste/
● http://www.onchain.it/
My matching pairs game: Java & JBoss, Open Source & Red Hat,
Blockchain & Ethereum

4. Casper e altri fantasmi
Swarm, ipfs & friends

13. Today agenda
● Byzantine problem
● PoW vs PoS
● PoS simple implementation and pitfalls
● Ethereum 2.0: why?
● Beacon chain the heart beat of Ethereum 2.0
● Ethereum 2.0 is it the future here?

15. Byzantine Problem solution
● Easy voting system
● In a permissionless system we can’t trust nodes/generals
● Sybil attack
● Need proof of ownership defense against Sybil attack

16. PoW
● Proof of ownership is HW used to compute the puzzle
● Puzzle hard to perform, easy to verify
● Only solving puzzle a miner could mine a block
● 51% attack
● HW/Power is an economic resource external to the system

17. PoS
● Proof of ownership using digital assets instead of computational power
● Easier to prove (just digital signing)
● Intrinsic secure (crypto based)
● Reduce power usage == cost of consensus
● Is based on internal resources
● IS MORE DEMOCATRIC 1 ETH == 1 ETH no cost scaling

18. PoS simple implementation and pitfalls
● Attempt to close replicate PoW chain
● Simple and easy to understand (from who is understanding PoW)
● Everyone could be a validator. More coin you have, higher is the probability
to validate a block
● PROBLEMS:
○ RNG manipulation
○ Nothing at stake flaw

19. RNG manipulation
● RNG need to be a deterministic function
● (Pseudo) random numbers generation depends on seed
● Seed depends (with variations, but still) on block(s)
● Validators could vote for blocks maximizing the probability to be selected in
future, even with less short term rewards
● It would drive to centralization
● There are algorithms to minimize this effect.

20. Nothing at stake flaw

21. Nothing at stake flaw: PoW solution

22. Nothing at stake flaw: slashing double voter

23. Nothing at stake flaw: slashing cheat and
double voter

24. Ethereum…..
…..is using Proof of Work…..but…..
…..2 different PoS (FFG and CBC) research are active….so
….So PoS matters...but…..

25. But the general problem is scalability

26. We have mining farm like this

27. To get the unstoppable world computer
Last year I was saying….
● Transaction sent to a contract address
● Every full node of ethereum run the code at this address
and store the state
(and it’s bold because it’s important)

28. Wrold computer performing like this

29. And it’s busy

30. And sometimes too much busy

31. Spending a lot of GAS...

32. Why is Eth (and other BC) is hard to scale?
Is not matter (only) of consensus
In today’s Ethereum network, every node is responsible for:
(1) participating in consensus on ordering transactions,
(2) executing those transactions to update the state
(3) making those transactions and the updated state available to the rest of the
network (data availability).

33. Scalability trilemma

34. Scalability solutions?
Off chain solution/child chain (raiden, lightning coin, plasma)
On chain solution (sharding, PoS, aka Ethereum 2.0)

36. Why together in ETH 2.0?
● Both require validator deposits (stakes),
● Both rely on access to random numbers,
● Both have fault proofs and slashing mechanisms,
● Both make use of aggregate signatures.

37. Ethereum 2.0

38. Staking - Sharding Manager Contract (SMC)
⟠ The PoW Main Chain is the part that exists today: the
current Ethereum Mainnet. In the Ethereum 2.0
system, this continues to operate pretty much as it does
today. Everything below this is new.

39. Random Number Generation
The Beacon Chain is a brand-new, Proof-of-Stake blockchain. It is the spine
that supports the whole of the new Ethereum 2.0 system. It is the heartbeat
that keeps the system alive. It is the conductor coordinating all the players.
⟠
Beacon Chain
“Coordination Layer”

40. Random Number Generation
The Beacon (RNG) is designed to provide:
● unpredictability,
● autonomy,
● consistency.
● (reasonably) unbiasible
The current approach to random number
generation is a RANDAO construction with
validators providing a “hash onion”

41. Data Layer
The Shard Chains are next and are where the scalability will
come from. Initially, the shard chains will simply aggregate
transactions and come to consensus on their ordering, without
executing them. This will be a good test of the system’s
infrastructure and security.

42. State Layer
The VM layer is the final big component of the Ethereum 2.0
system and will provide for the execution of contracts and
transactions....
Ethereum flavored WebAssembly (eWASM)
Some ideas comes from TrueBit

43. Ethereum 2.0
Ethereum 2.0 isn’t a new idea. Back in 2014, Vitalik said of Ethereum 2.0 that,
“We will either solve the scalability and consensus problems or die trying.

44. Ethereum 2.0
Well, they’re still very much alive, and his updated view from just a couple of
weeks ago is that “There is no significant unsolved theoretical problem left for
Ethereum 2.0.

45. Now201920212020
Speculative timing

46. Is Ethereum 2.0 “The solution”
Probably not….but it’s good to have someone researching and looking for
solutions...

47. Is Ethereum 2.0 “The solution”
Probably not….but it’s good to have someone researching and looking for a
solution...

48. Thanks for coming
0x41a6021A6Dc82cbB0cd7ee0E3855654D225F48C6
I’ll use ethers only for beers :)
● https://www.linkedin.com/in/maeste/
● https://twitter.com/maeste
● https://github.com/maeste/
● http://www.onchain.it/