This article was written with assistance from ETHNews staff writer Alison Berreman.
During the Ethereum Core Devs Meeting #40 on June 15, Ethereum guru Vitalik Buterin discussed some possible upgrades to Ethereum involving Casper and sharding.
The update replaces the proposed Casper FFG with a version dubbed Casper v2. Casper v2 would operate on a beacon chain linked to the main chain. Keeping the proof-of-stake (PoS) component separate from the main chain allows for less intrusive development, and users would be able to make their own voting rules as well as rules about how blocks are moved around – and how blocks are added – all without having to worry about how other transactions are being processed.
At some point, a sharding function would also be enabled on the beacon chain and would operate with the PoS consensus algorithm Casper provides. This development would smooth the transition to full PoS and sharding implementation on the main chain because sharding can be built into Casper v2.
Additionally, Buterin explained in the meeting that the transition to Casper v2 would be easier "because basically, here, there would only be one validator set and only one way to get into the validator set – only one kind of validator – right from the start."
Prior to this latest proposal, Casper FFG was being tested as a smart contract on the testnet to be implemented on the main chain. The idea was that a more complete PoS rollout would come later, as would sharding.
As it stands, Buterin said that Casper v2 implements basic shard management, but that "there are some parts of shard management that are not currently specified here, in part because we want to preserve the optionality of how those parts will evolve over time." He went on to say:
"The functionality that this provides, at least in the short term, is very similar to the functionality that Casper FFG as a contract had, with the exception that this particular mechanism is one-way."
The one-way nature of the beacon chain's functionality means that when ETH is deposited to the system, those tokens would sit there until a future hard fork enables shard state transitions to allow the ETH to be withdrawn.
Casper v2 is also intended to offer increased security for the Ethereum main chain. Every block on the beacon chain would reference a block on the main chain. This means that whenever a block on the PoS chain finalizes itself, it directly points to a block in the main chain, which is indirectly confirmed by the block on the beacon chain.
The update would also reduce the minimum stake from 1,500 ETH to 32 ETH, making it possible for even more people to participate.
"This beacon chain is something that pushes us much further along towards the final product of a sharded system. This design can scale up the blockchain to its theoretical maximum."
Ethereum is in a constant state of flux as technology and ideas evolve, but this particular development has been brewing for several years. In January, ETHNews reported that Buterin rolled out a development roadmap for Ethereum that included his plans for sharding and moving to a proof-of-stake consensus mechanism as methods to address the blockchain's scaling problem. In April, specifications for the proposed Capser FFG implementation were published. And just last month, Buterin tweeted "Sharding is coming," for which he received a massive online response.