Everyone's favorite "Friendly Finality Gadget" doesn’t replace mining; it just provides Ethereum with increased security. But will it lead to greater centralization? Its creators have tried to ensure it does not.
Given that pretty much everybody enjoys a little validation, we've decided to give you a breakdown of Vitalik Buterin's presentation[1] during the Community Ethereum Development Conference (EDCON), in Toronto.
This Friendly Finality is Not the End
It should be known that the Casper "Friendly Finality Gadget" (FFG) is an "overlay process that lives on top of the existing proof-of-work chain," to give blocks additional security. It does not replace proof-of-work; it only verifies it. "Finality" in this case is defined as[2] an operation that, once completed, cannot be reverted.
Casper FFG is an important stepping stone on the road to fully switching Ethereum to proof-of-stake[3]. It basically recruits nodes into becoming validators of the network. While this does not replace miners, it does in some way transfer an amount of power, and ability to earn ETH, into the hands of the validators.
"A validator," says Buterin, "is someone who has a pile of ETH and deposits it into a smart contract, and [who] runs a node that basically signs coins with the same key that controls that ETH, in order to participate in Ethereum's consensus algorithm and keep the network running."
There is a disincentive for bad behavior, too. Nodes that attempt to hedge their bets and stake Ether in conflicting votes will be flagged by the system. That user will be logged out, bumped off the network, and could lose between 1 percent to 100 percent of their stake.
Here's how it works.
Step 1: Choose Your Validation Code
Buterin is trying to
