Why did Ethereum choose the PoW+PoS hybrid mechanism? Vitalik Burterin: More secure

The market value of the entire cryptocurrency reached a new milestone in early June, exceeding $100 billion. Ethereum, the second largest cryptocurrency in the cryptocurrency market, has also exceeded $20 billion. Huobi.com and OKCoin, two of the three major domestic trading platforms, have opened Ethereum transactions. More and more smart contracts based on Ethereum have been established, and the entire ecosystem is continuing to grow.

On May 26, Ethereum founder Vitalik Buterin, as an important guest, stepped onto the stage of the "Summit Dialogue" of the 2017 Big Data Expo, along with other Internet giants such as Jack Ma, Pony Ma, and Robin Li, and once again popularized blockchain and Ethereum to the world.

What is a good blockchain?

Vitalik first mentioned in his speech that the reason why blockchain has a bright future is that many industries are currently monopolized, which brings risks and problems, so the decentralization of blockchain has its place. "Giant companies in the industry have monopolized the market, such as Microsoft and Google. The consequence of the monopoly of giants is that prices will become higher and higher, and many unequal treaties will appear. Monopoly will continue to bring about a new round of monopoly, and there is no way to stimulate disruptive creation, and the industry cannot develop effectively."

Vitalik believes that blockchain has undergone significant conceptual and cognitive changes since its birth. When asked what a good blockchain application is, Vitalik said that a good blockchain application must first solve the problem of coordination, coordination between different companies, and cross-border interactions between different entities and institutions in a trustful manner, while not causing monopoly problems.

"The first step of the sharing economy is how we build a service that connects the world and benefits users. The second step is how we build a service that connects more people without putting some people at the center. This is a sustainable model."

From PoS to PoW+PoS: More secure

Ethereum published a planned implementation guide in early May, stating that Ethereum will first start with a "hybrid" system - a mixture of Bitcoin-style proof-of-work (PoW) mining and the much-anticipated and experimental proof-of-stake (PoS) system Capsper.

This plan actually means that Ethereum will start alternating between the PoS and PoW systems, so that some transaction blocks (1%) are protected by PoS, and the rest remain in PoW. Ethereum originally considered converting the PoW mechanism directly to the PoS mechanism. Why did it make such a change? Vitalik Burterin's answer is concise and direct:

“The change from the PoW mechanism to the PoW+PoS hybrid transaction mechanism is a small change, which can be faster and safer, and is more beneficial to users. Because we need to avoid the dangers brought about by the mechanism change, we can only make greater investments after the entire system is safer.”

The greater value of Ethereum lies in smart contracts

As the ICO market becomes increasingly popular, there are many projects that use smart contracts on Ethereum to conduct ICOs. Many people in the community believe that there are many smart contracts but few are actually implemented. Vitalik also has his own opinion on many ICOs that are "much ado about nothing": "That's true. Many people are launching ICOs now because they see that ICOs are very popular. Projects that don't need to set up a token system themselves also set up tokens for ICOs. Many more successful applications still need further progress in technology, and security issues also need to be resolved."

Vitalik also discussed with reporters the question of "What is the perfect digital currency?" He believes that even if Bitcoin becomes the perfect digital currency, Ethereum will have a completely different positioning and better development, such as smart contracts.

Moreover, due to Bitcoin's high transaction fees, long confirmation time, and the unresolved block expansion problem, Bitcoin is still far from being a perfect digital currency. "It is difficult to solve the problem of block expansion, and I don't think Bitcoin is brave enough," said Vitalik.

Ethereum’s smart contracts are a completely different development direction. “Ethereum is not just a digital currency, its value lies in smart contracts. Ethereum has many applications and many people are interested in it. It can realize many functions and applications in many different industries.”

So what is the perfect digital currency? Vitalik didn’t give a clear answer, but he said, “The next generation of blockchains will need to handle more transactions and require a brand new approach.”