Ethereum launches its first public testnet for full upgrade to Proof of Stake (POS). What is Proof of Stake?

On December 21, Ethereum core developer Tim Beiko announced on Twitter that Ethereum will launch the first public testnet Kintsugi Merge Testnet for a full upgrade to Proof of Stake (PoS). Tim Beiko also said that although client development and UX will continue to improve, users are encouraged to start using Kintsugi as early as possible to familiarize themselves with the Ethereum network in a merged environment. Major upgrades will be performed by pledgers who deposit 32 ETH. Currently, 2.3 million testnet ETH has been deposited into the new network by 72,000 validators, indicating that the community is fully prepared for "the biggest upgrade in the crypto space." In addition, according to the report, there will not be much change for application developers, and tools that only interact with the consensus layer or execution layer will be largely unaffected.

What is Proof of Stake?

Proof of Stake is a consensus mechanism for a blockchain network to reach consensus.

This will require users to stake their ether to become legitimate validators in the network. Validators have the same responsibilities as miners in proof-of-work (PoW): ordering transactions and creating new blocks so that all nodes can reach a consensus on the state of the network.

Proof of Stake has many improvements over Proof of Work systems:

1. Improved energy efficiency - you don’t need a lot of energy to mine blocks

2. Lower barriers to entry and reduced hardware requirements - you don’t need excellent hardware to get the opportunity to build a new block

3. Stronger decentralization - Proof of Stake can provide more nodes in the network.

4. Stronger support for shard chains - a key upgrade to expand the Ethereum network

Proof of Stake, Staking, and Validators

Proof of Stake is a basic mechanism used to incentivize validators to accept more stake. In the case of Ethereum, a user needs to stake 32 ETH to qualify as a validator. Validators are randomly selected to create blocks and are responsible for checking and confirming blocks that were not created by them. A user's stake is also used as a way to incentivize good validator behavior. For example, a user may lose a portion of their stake for being offline (failed to verify), or lose their entire stake for intentional collusion.

How does Ethereum Proof of Stake work?

Unlike proof of work, validators do not need to use a lot of computing power because they are randomly selected and there is no competition between them. They do not need to mine blocks, they only need to create blocks when they are selected and verify blocks submitted by others when they are not selected. This verification is called attestation. You can think of attestation as saying "this block looks good to me". Validators are rewarded for proposing new blocks and proving blocks they have seen.

If you provide proof for a malicious block, you lose your stake.

Proof of Stake and Security

The threat of a 51% attack still exists in Proof of Stake, but it is becoming increasingly expensive for an attacker to attack. To launch a 51% attack, you need to control more than 51% of the ether stake. Not only is this a huge sum of money, it also has a high probability of causing the value of ether to depreciate. It is very easy to destroy a large portion of the value of your currency. Of course, there are also stronger incentives to keep the network secure and healthy.

Stake slashing, kicking, and other penalties on the beacon chain are coordinated to prevent other malicious behavior. Validators will also be responsible for recording these events.

Pros and Cons

advantage

Staking makes it easier to run a node. It doesn’t require a huge investment in hardware or energy. If you don’t have enough ETH to stake, you can join a staking pool.

Staking is more decentralized. It allows more people to participate, and more nodes do not mean an increased percentage of rewards like mining.

Staking can ensure security protection. Sharding allows Ethereum to create multiple blocks at the same time, increasing the transaction throughput. Placing the Ethereum network in a proof-of-work system will reduce the computing power required for the network to be attacked.

shortcoming

Compared to proof of work, proof of stake is still in its infancy and has not been tested in real-world applications.