As you can see, the expected dates for Ethereum PoS (test & release) is somewhere in mid 2019. The exact date for Ethereum's Casper Proof Of Stake is uncertain. If you are an ETH investor or interested in investing, I suggest you read up on the events leading up to these delays. In the next section I explain transition from the Initial Ethereum Roadmap and the Updated Ethereum Roadmap with Casper Version 2.

First, let’s quickly go over what the road map was supposed to be last year. Again, I’m going to keep this simple.

As of last year, the roadmap included two major milestones: Metropolis & Serenity

Both of these milestones were efforts to move towards eventual scalability with Proof Of Stake & Sharding. 

Phase 1: Byzantine
The Byzantium update would bring privacy improvements. It took place on the Ethereum chain last year.  

Phase 2: Constantinople  
PoW/PoS Hybrid (Casper FFG) and more.  Constantinople was supposed to happen earlier this year. But all priorities were shifted to rolling out Proof Of Stake & Sharding as soon as possible.

Up until June 2018, Constantinople’s Casper FFG was still in play. However, that plan is now being dropped as well – for something more clean and efficient. This brings us to the new release-date milestone on the Ethereum Roadmap for 2018:  Casper V2

The initial plan was to transition to Proof Of Stake with Casper FFG. Casper 2.0 was to be a Smart Contract that allowed you to become a validator with a deposit of 1500 ETH. The Ethereum estimated this release date to be somewhere in 2018.

Proof Of Stake was to be implemented first and the team would roll out Sharding after. There were separate deposit pools for Sharding and Casper.  

To Summarise:

1. Casper FFG to be a Hybrid PoS and PoW chain
2. 1500 Ether deposit required to become a validator
3. Casper rolled out first, Sharding rolled out after

Due to some misleading posts and misunderstood comments, several people are confused. These are the two primary impressions that people have in regard to the Casper update:

1. Casper and Sharding will be combined and launched together.
2. Sharding will now be prioritized over Proof Of Stake

This is not true at all. And it’s important that expectations are set right.

The plan for Casper FFG requiring 1500 ETH deposits will be scrapped.  Casper V2 will be implementing a “beacon chain” – onto which Casper and Sharding will be merged (here is where people get confused).

This does not mean that Casper and Sharding will be launched on the beacon chain together. It simply means that Casper and Sharding will be implemented on the same chain.  So, Casper could come first, and Sharding be implemented much later. Or vice-versa. 

So to summarise:

1. A Beacon Chain that will be used for both: Casper & PoS validators

2. Sharding and Casper will be worked on concurrently – they are independent efforts

3. Only 32 Ether minimum staking deposits

The beacon chain was originally supposed to be used only for the Sharding implementation.

The Casper V2 Ethereum Update has been confusing a lot of people. I don’t blame you guys – the information has been all over the place. But maybe this analogy will help:

Think of the Casper and Sharding as two cars going to a family picnic. To get there, both cars have to merge onto Highway 10. We’re not sure which car will merge on first. We simply know that:

1. Both cars are headed there (Casper and Sharding are the two cars)
2. Both need the Highway to get there efficiently (Beacon chain)
3. Everyone needs to eventually get to the family picnic (scalability)

Similarly, Casper and Sharding are two independent projects – either could be completed first.This unified approach will allow for a minimum staking requirement of 32 ETH deposits.

Casper will most likely be launched first, but we can’t rule out the possibility of Sharding going faster.

Ethereum's release date for Casper FFG was scheduled for 2018. However, the new version of Casper will have a release date somewhere in 2019-2021. Yes, the rather timeline for release is vague, but there's good reason for that. Let's recap quickly:

As mentioned, the initial plan was to roll out Casper FFG as a hybrid PoS/PoW. Casper FFG would have Proof of Stake (PoS) but would not have Sharding. With the PoS release, Validators would be allowed to deposit ETH in order to stake. However, they would require to 1500 ETH in order to participate in the PoS consensus. This wasn't ideal because it would entail a lot of centralisation.

In 2018,  the need for scaling became increasingly urgent. The Ethereum team shifted all focus to the key releases that would move the needle toward scalability; namely, the PoS release and Sharding release.  Casper FFG was to be the first PoS release, but would still use the PoW chain. This release date was estimated to be somewhere in 2018. The team was to release Sharding after PoS.

Casper FFG allow Ethereum to release a PoS quicker. However, it would entail "double work". Since Ethereum would have to eventually release/migrate to a pure PoS chain. Because of this, they decided to scrap working on Casper FFG. They will now be working toward releasing Casper V2 – which will have PoS on the beacon chain as well. Since Sharding will be implemented on the beacon chain as well, it allows Ethereum to have a unified approach for their releases.

Unfortunately, this  pushes back the release date for Ethereum Casper V2 to around 2019-2020. Sharding will be released on the same beacon chain that will be used by the PoS release. This does not imply that Casper and PoS are coming together.  I would estimate it's release date to be in 2021. But there's a possibility that it may beat the PoS to the release finish-line. 

Related Posts:
1. Ethereum ​Casper V2: All You Need To Know
2. Ethereum Sharding Explained Simply

Radix DLT is beginning to garner increasing attention in the crypto-space. Radix rose from an obscure and exotic "coin" in 2017 to one of the most discussed technologies in 2018. Every week, I receive several questions on Radix’s Scalability & Sharding or on their Tempo Consensus Method.  But one of the more common questions goes something like this:

"Hey, what are your thoughts on the Radix Coin ? "​

It recently dawned upon me that while I’ve discussed Radix’s infrastructure, I haven’t really delved into the “Radix Coin”.  While Radix does indeed sport a crypto coin, it is so much more than that. Radix DLT is a fully fledged distributed ledger technology platform. The platform will feature decentralised applications, mass scalability, and of course, the Radix Coin as well – 'RDX'.

In this post, however, we focus our discussion on the Radix Coin (RDX) and its purpose in revolutionizing the digital economy. If you’re interested in the Radix  DLT Infrastructure – mainly its Consensus and Sharding approach, then you can read the following introductory & simple explanations:

• Radix Sharding  – Explained Simply
• Radix Tempo Consensus Algo – An Easy Analogy

The following sections will discuss how the Radix Coin will serve and benefit from the Radix DLT infrastructure.

The Radix Coin will be the token used on the Radix DLT platform to fuel various operations. However, the coin and the platform have special features that make the dynamic rather interesting. The Radix coin will be a relatively stable coin. Notice the word "relatively" – this is key. Several people mistaken the Radix Coin to be a stable coin. This can lead to confusion – especially for interested investors. 

Radix DLT designed the RDX token so as to have low-volatility. In that vein, the Radix Coin will initially be pegged against the US Dollar where 1 Radix Coin will be equivalent to $1 USD. However, after a certain period, the price of the Radix coin will float free.  Low-volatility and relative stability will be maintained by increasing the supply of the coins. 

“Wait, what the… what do you mean by ‘increasing’ supply of the coins? “

Don’t worry – we’re not talking about ‘Supply inflation’ here. Radix DLT will be using an algorithmic model that will monitor demand and accordingly increase as well as decrease the total supply of the Radix Coin at regular periods. The low volatility of the Radix Coin will help facilitate mass adoption. And the flexible supply should satisfy investor needs as well.

In the following sections, we will discuss how investors and merchants both benefit from this flexible supply system.

Upon first hearing “stable coin”, cryptocurrency investors are immediately skeptical. After all, why invest in something if it’s going to be stable in value? This is an understandable concern since we’re conditioned to the volatility of cryptocurrencies. The Radix Coin, however, functions sort of like a Bond with a variable interest rate.  The value of each Radix Coin may not rise and fall substantially. But the investor will receive more RDX at regular intervals which should increase his total amount of RDX.

For example, let’s say John has  2000 RDX. At the time, each RDX is valued at around $1.10.

• No. of RDX: 2000   
• Value of each RDX:  $1.10
• Total Value: $2200

In the coming months/years, the demand for the Radix Coin skyrockets! Now, each of John’s RDX will not increase drastically in value. Instead, the total number of RDX he has will increase.  His total Radix Coins will increase to 6000 RDX and each RDX will be worth $1.15 (Remember – the Radix Coin will be relatively stable.)

• No. of RDX: 6000  
• Value of each RDX:  $1.15
• Total Value: $6900

Note: This is just an example – as details on the calculations have yet to be released.

On the flip side – if the demand for the Radix Coin reduces, the platform has mechanisms in place that will perform a token-burn process to reduce the total supply of the Radix Coin. Again, details on how this process is yet to be revealed. We will all have to wait for the economic white paper that should be released closer to their mainnet launch.

However, we can rest assured that investors don’t have to worry about their investments being “stale”.

One of the biggest reasons the Radix Coin features relative stability is to facilitate mass adoption. Without stability, mass adoption across the world will be near impossible.

As things stand, the general public find it troublesome to hold cryptocurrencies for anything other than a speculative investment. You may hear increasingly more reports of merchants accepting cryptocurrencies as a form of payment. However, most of these merchants are immediately converting their cryptocurrency back into regular FIAT.  Why? Well, simply because merchants need to be able to rely on their revenue holding value in the months that follow. Cryptocurrencies are far too volatile to offer the level of reliability that merchants need in order to run an efficient and sustaining business.

Similarly, regular consumers will only hold a fraction of their purchasing power in cryptocurrencies for similar reasons. With the current state of the market, it’s a serious gamble to rely solely on your holdings of cryptocurrencies to pay your rent or mortgage. The Radix coin will safeguard against violent price swings using an elastic-supply. This will allow merchants and consumers to hold their Radix Coins with reduced risk.

Scalability has been one of the biggest limitations of current blockchain solutions. Most DLT consensus models have to make the tradeoff between throughput and decentralization. Radix, however, achieves high throughput, security and decentralization using a unique approach to Sharding along with their Consensus Method – Tempo .   The Radix DLT platform ensures that every single device can be part of the network and use the Radix Coin to transact with high speed across the globe.

With "Stable Coins", like the Radix Coin, being the latest talk of the town, its no surprise that investors and enthusiasts alike are blazing with questions on how to seize opportunity on this relatively new crypto class.

The concept of price stability around the radix coin will be primarily based on elastic supply. Depending on the demand of RDX, there will either be a coin issuance to each RDX holder, or a coin burn. While much of the economic structure behind the Radix coin is yet to be unveiled, their scaling solution - Radix Sharding & Tempo Consensus – has been fully implemented and tested. 

Follow up Reads:
1. Radix Sharding  – Explained Simply
2. Radix Tempo Consensus Algo – An Easy Analogy
3. Radix DLT – The Future of Crypto?

There’s been a great deal of confusion in regard to Ethereum’s new approach to Casper. Part of the confusion stems from the updated timeline for Ethereum’s PoS (proof of stake). And the other part of the confusion stems from this new “Beacon Chain” thingy.  Yes, I said ‘thingy’.

So, in this post I’m going to try to break things down in an easy manner for you guys. What exactly is the Beacon chain? And what role does it play in Proof Of Stake and Sharding

As usual, I’ll keep it simple – and avoid the unnecessary details.

Before we go any further, allow me to break down the structure of Ethereum’s Casper V2.  There will be three chains that we are concerned with:

1. The Ethereum PoW Chain
2. The Beacon Chain
3. The Sharding Chain(s).

All three of which will be linked together in Casper V2.

This is the chain that Ethereum is currently using. It’s using the traditional Proof Of Work (PoW) consensus method. In Ethereum’s Proof Of Work chain, miners currently validate blocks by running the PoW Cryptographic Puzzle.

However, Ethereum will be using Proof Of Stake in Casper. Miners will have to transition to the Proof of Stake chain if they want to keep validating blocks for the Ethereum Network.  To do so, they will have to deposit 32 Ether into the Beacon Chain. Once they do that, they will become Validators on the Beacon Chain.

Important:  Miners are not the only ones who can become validators. Anyone can deposit 32 Ether from the Ethereum PoW Chain to the Beacon chain to become a validator

Alright, so the Beacon Chain is where all the confusion stems from. But it’s actually quite simple. The Beacon Chain serves two primary roles

1. The main Proof Of Stake chain

2. The base layer of the Sharding solution

   
   

To Simplify: The Beacon Chain will link to the Shard Chains and “signal” which blocks from the Shards should be added onto the main chain. The main chain will be validated & finalized using Proof Of Stake. The main chain also resides on the Beacon Chain. The Beacon Chain will also play a crucial role with the Shard Chains. It links up to the Shard Chains to listen for blocks that will be included onto the beacon chain (the PoS chain).

Yes, there are going to be multiple Shard Chains. Remember, Sharding is an attempt to avoid having “every single node validate every single transaction”. This will allow for more scalability.  In order to do so, instead of having one single chain, we will have multiple shard chains. I explain Sharding in more detail in this article: Ethereum Sharding Explained Using An Analogy.

Essentially, you can think of the Shard Chain as a group/block of multiple chains. All the transactions will take place on these Shard Chains – and will be split between each shard.  The account data will also be stored on these shard chains.

Above, I mentioned the Beacon Chain links up to a Shard. Well, there’s also a link from the Shards to the Beacon chain. This link needs to be attested/signed-off by a sub-group of Validators that will be pseudo-randomly picked.
​

Casper will be using Proof Of Stake which does not require “mining” to validate blocks. If a miner wants to continue validating blocks on Casper, he will have to deposit 32 Ether into the Beacon Chain like everybody else.

Once 32 Ether is deposited, the person will go into the “Queued Validator” pool and eventually get added to the “Active Validator” pool. Active Validators will be responsible for producing blocks, sign off on blocks and sign off on links (to shards).

You may be wondering why the Ethereum team chose the term “Beacon Chain?”.  The Beacon Chain was originally only part of the Sharding spec. It’s role was (and still is)  to link up to Shard Chains and signal which blocks should be added to the main chain. 

The Validators utilize the crosslinks between the two chains to “listen” for new blocks on the shard chains. They then sign off on the block and the crosslink if it is to be included on the main chain.

Beacon essentially means “Lighthouse/signal” – and that’s precisely what the role that the Beacon Chain serves.

Disclaimer: I’m sort of taking an educated-guess at this one. To be honest, a lot of the terminology in Sharding & Casper PoS is sorta...confusing (e.g: proposer, collator, validator, committee...come on Vitalik!)

As you can see, the Beacon Chain in the new Casper implementation isn't all that complicated. All you need to know is that it will serve as the foundation for the Proof Of Stake and facilitate the communication via the Shard Chains (via cross-links).  You can become a Validator on the Beacon Chain if you deposit 32 Ether from the current PoW Chain. Once you do that, you can take part in the Proof Of Stake consensus process as well. Validation & Finality  will take place on the Beacon Chain. Transactions & Account Data will be on the Shard Chain.

Simple, eh? Tbh, maybe all you need to read is the conclusion of this post. Damn. Oh well.

Follow up Reads:
1. Casper Roadmap Update Explained
2. ​Ethereum Sharding - A Simple Analogy
3. Finality: Understanding Settlement & Finality

Sharding has morphed from an obscure concept in 2017 into the buzz-word of 2018. The need for blockchain scalability has become glaringly obvious, and several projects have turned to Sharding as a solution.

However, Sharding a blockchain is not a simple task. In fact, it poses challenges that have our best thought-leaders scratching their heads. Several projects have made lofty promises of future scalability using Sharding. But, only few have provided a viable Sharding solution for mass adoption. RadixDLT is one of the rare projects that brings forth a novel approach to Sharding –– an approach that seeks to meet the demands of mass adoption

Right from its conception, the goal for Radix was:  Every single person, on every single device using a single protocol simultaneously.

​Every single person, on every single device using a single protocol simultaneously.

The RadixDLT Sharding architecture was designed (unlike other projects that approached Sharding “after-the-matter”)  to allow for unbounded scalability while maintaining security, and maximizing decentralization.

In this post, I will explain how Sharding works in Radix in a simple way – without any technical jargon.

Break a window, and you have shards of glass. Break an iceberg and you have shards of ice. A shard is simply a broken piece of ‘something’.  So, when you “shard” something, you’re simply breaking it into smaller pieces.

But, why do we shard? Well, you usually shard something because it’s easier to manage. For example, we ‘shard’ a large pizza because it’s easier to eat one slice at a time. It also allows us to share (distribute) the pizza with friends a lot easier.

Similarly, when a database gets too large to handle, we shard it and distribute it across multiple computers. There you go –– you now understand distributed computing & Sharding. It’s really that simple.

Sharding has been used to partition databases for a long time. You simply cut the database (think of an excel sheet) horizontally into several pieces and distribute across multiple “database servers” (machines that ‘serve’ you data when you need it). When the data needs to be retrieved or processed, the relevant database server is called upon to do the task.

In Blockchain these “servers” are what we call “nodes”.  However, Sharding a decentralized system isn’t as straightforward as we’d like. There are complications that a centralized system doesn’t need to concern itself with.

Every distributed system requires a Consensus Method. But, developing a Consensus Method for a Sharded blockchain is tricky. You find yourself sacrificing security in favor of scalability.

Why? Well, a huge component of the security comes from the fact that every node stores all the data. Since every node keeps a copy of the entire database – you can’t cheat/lie about past events. But when you shard that database, each node stores partial data. Suddenly, you can tell Node Bob one thing, and tell Node Lisa another.

To understand this better, think back to when you were a kid.

Remember when your Mom grounded you and your Dad didn’t know about it? If you were anything like me, you tried to sneak out by asking your Dad for permission. Dad didn’t have all the info. And you took advantage of it.

Mom and Dad represent a Sharded database. Sure, together they have all the info needed to run the household. But as individuals, they don’t – and can be lied to about past events (like you being grounded or not)

Founder & CTO  Dan Hughes identified the scalability issues that would plague Bitcoin back in 2012. After several attempts at improving the protocol, he realized that the only solution is a brand new architecture and consensus method. Six years and a lot of sweat later, he brought us Radix DLT – a unique Sharding approach and consensus algorithm.

Radix DLT approaches Sharding in a unique but simple manner.  Most projects take existing Consensus Methods and build a Sharding solution on top of it. But as discussed, this leads to sacrificing security. For example, Sharding on PoS network could result in a One Percent Shard Attack.

Radix, however , started with a Sharded network –– and built a unique consensus method on top of that network. This “Sharding-first” approach allowed them to bypass the limitations faced by other consensus methods.

Essentially, Radix began with the end state in mind, which is:  every single person on every single device using a single protocol.

Radix’s pre-sharded network serves as a fundamental around which they have designed their consensus method (Tempo).

The size of each shard, and the number of total shards are predetermined. Nodes then place themselves atop shards – and can overlap with other nodes in layers. 

This is where it gets interesting…

Remember, every shard has already been created. They all live in the same “Universe” and their location ID is known. Every transaction is stamped with a blend of the sender’s ID and shard ID.

This makes it extremely simple to locate the Shard from which the transaction that has been sent.  Now, if Node Bob tries to double-spend his $10, we don’t need to check every other shard to catch him cheating. We can simply check his shard.

To better understand this let’s go back to our Mom & Dad analogy

​Your Mom grounds you. But this time, she stamps your forehead with the word “Grounded”. You now go to your Dad’s study room and ask him if you can out to play. Your Dad simply looks at your forehead and says “Nope”.

He didn’t need to go check with your Mom. He didn’t need all the info – and was still able to stop you from cheating.

Similarly, the overlapping of nodes and easy cross-shard communication allows each node to store partial info. Which essentially means: not all nodes have to store all the data!  This plays a significant part in Radix’s massive scalability without sacrificing security.

(I simplified this, of course. But we will discuss more on Atoms, Universes timestamping & Temporal Proofs in future posts)

As mentioned earlier, the need to store and process every transaction is a huge limitation for blockchains. Radix is a cleverly designed network that avoids this limitation.

Radix has presented an innovative and noble approach to solving the scaling issues of DLTs. 

Over six years of sweat and frustration, Dan Hughes and team remained true to the goal: Every single person, on every single device using a single protocol simultaneously. The project is still in alpha and the team urges us to participate and help find any potential issues or flaws. 

​Although this was an introductory explanation, I’m sure you can’t help but wonder... Will Radix DLT be the answer to the burning question for mass adoption? Time will tell.

Businesses – small or large – face issues with finality of payments quite often. A consumer can attempt to reverse his payment made via VISA or PayPal. In these scenarios, settlement finality conflicts are handled by the middleman.

However,  middleman-solutions are always going to be a point-of-weakness for finality. What if people in key positions are bribed?  What if  centralised servers are hacked? In a centralised solutions, there's always a chance that finality is reverted. Each intermediary will pose a risk point.

Comparatively, a blockchain uses no intermediary. It achieves finality via it's consensus method. Notable consensus methods are Proof Of Work and Proof of Stake. Both of which eliminate several weaknesses of centralised systems. However, neither of them achieve true finality. Finality will always be probabilistic (i.e there's a chance – however small – that a transaction can be reversed) 

First, let's go over finality in proof of stake and proof of work.

Settlement Finality: Proof of Work & Proof Of Stake

In my previous posts, I discussed Ethereum Sharding & Scalability. Several of you have been following the series and have asked me some intriguing questions.

A question that has come up multiple times is:  
​“Will Ethereum’s Scalability lead to a reduced “scarcity” and thus suppress the price of Ether?”

It’s a fair question, since scalability will lead to reduced operations/transaction costs. And that’s precisely what creates the demand for Ether. But the answer isn’t as intuitive as most would think.

Ether’s Scalability, Scarcity & Price

On one hand you’d think that Ethereum scaling should increase the price. After all, scalability is a good thing, right?

But on the other hand, scalability will lead to lower transaction fees. Since transaction costs are paid for in Ether – wouldn’t Ether be consumed less? And hence needed less? Therefore, is it fair to assume that the demand for Ether will decline because we’d need less of it?

Finally, if less Ether is needed for operation costs on the network, would the “scarcity” of Ether reduce? (leading to price suppression)

So which is it? Will scalability lead to a price up or price down?

Jevon’s Paradox - Coal & Steam,  Ether & Gas

English Economist William Jevons observed this paradox during the era of coal-fired steam engines.

He’s essentially saying: People assume that technological improvements that lead to efficient usage of fuel will in turn lead to reduced usage of fuel. But the opposite is true

Ether & Jevon’s Paradox:  The Rebound

Yes, transaction fees will decrease as the Ethereum network achieves scalability. However, this does not mean that the price of Ether will decrease as well.

As we scale into mass adoption, Ether will be used for various operations across a wide range of diverse industries. With this, the consumption of Ether will rise in response to lower prices. Eventually, we will reach a point of “rebound” where the gains in efficiency are overcome by the rise in consumption.

There are several examples of technological advances increasing the efficiency and availability while prices have still gone up. 

A perfect example is the price of fuel for your car (gas)
​Technology has made fuel far more efficient. We consume it more efficiently, and we find it more efficiently too. But the demand for fuel has only gone up with time.

Ether & Scarcity: To Infinity And Beyond

Finally, let’s understand what Scarcity really is - People tend to believe that scarcity is defined by the item/resource, but in truth, it’s defined by us humans and our needs.

And we live in a digital age where the “want” to conduct transactions/operations as efficiently as possible is fast approaching “infinite”.

As the cost of each operation on the Ethereum network reduces, humans will “want” to use the network more and more. But, Ethereum at any given point of time, is finite in number. (setting aside the minor inflation, of course)

Note: There’s a difference between a “shortage” and “scarcity”. Shortages are caused by rising prices, while scarcity results from falling prices.

However, as the village began to grow, they found it difficult to keep up with the system.

Maintaining the Security of the ledger was a tedious and time-consuming task.  It was essential that they cross-check & validate the ledgers properly. Any shortcuts would lead to security-vulnerabilities. Eventually, the village grew into a city, and they simply could not keep up with the task of maintaining the ledger anymore.

Essentially, the village wasn’t able to take their system and Scale it in preparation for the growth of the city.

In order to scale, the villagers had to alter their solution. They were wary of having a single middle-man due to their past experience with Mr.Ledger. So they appointed a group of individuals to maintain the ledger and keep a check on each other.

Conclusion​

As things stand, blockchain solutions are struggling the find the right balance balance to the trilemma.  Vitalik Buterin proposes Sharding to theoretically break the trilemma. I explain Sharding (using another analogy) in a previous post. It’s an ingenious solution – but still has some form of sacrifice. 

Other blockchain solutions that have high scalability have done so by sacrificing decentralization. EOS is a notable example that uses Delegated Proof Of Stake. This is essentially much like appointing (delegating) a group of individuals to manage the ledger – much like our village analogy.

Finally, other solutions like Radix, HashGraph and IOTA are not blockchains. They do not have the architectural limitations that blockchains do.

Sharding is an initiative to tackle the scalability issues that Ethereum faces. All blockchains are limited by their architecture & design. How? Because every node in the blockchain processes every single transaction. While this enforces a high degree of security/reliability (explained in this post), it also limits the scalability.

Sharding improves the scalability of the Ethereum blockchain by splitting the network into smaller “groups/pieces”.

Remember from our post on Consensus Methods, that consensus or “agreement” is achieved by a majority agreeing on the state of the ledger.

Remember that if we SHARD in PoW, we are breaking up the network into "pieces". Hence, to achieve a “majority” hashpower in a particular shard would suddenly become feasible (since each shard will have only a “piece” of the total hash power”)

Proof Of Stake

Proof Of Stake – along with this structure – allows Ethereum to do something that it cannot do (easily) in PoW. And that is the ability conduct “random-sampling”.

Since Super-Nodes are depositing their Ether, we can use that to randomly assign them to a shard. The assignments are reshuffled regularly as well.

This will ensure that attackers:

Comparing a Blockchain to a DLT  is like comparing an Apple to a Fruit. An Apple IS A Fruit.  Similarly, a Blockchain IS A DLT (Distributed Ledger Technology)

I've also received questions on whether or not the Bitcoin blockchain and distributed ledger technology have anything in common. Let's use another analogy to answer this question.

The Bitcoin Blockchain and Distributed Ledger Technology synonymous to "Google" and "Search Engine". Google is a specific type of Search Engine.  Similarly,  the Bitcoin blockchain is a specific type of distributed ledger technology.  

 Bitcoin IS a Distributed Ledger Technology (DLT). 

Remember, in the previous section we discussed how a blockchain is a sub-category of a DLT. There are many types of DLTs; and blockchains are only one of them. Similarly, there are many types of blockchains; and the bitcoin blockchain is just one of them. 

What is a DLT?

So what exactly is a DLT ?  Again, I will attempt to make this as easy to understand as possible.  A DLT – Distributed Ledger Technology – simply distributes information to multiple computers. These computers could be spread across the world. The primary aim is to reduce the risk of central storage.

Distributed Ledger Technology is the umbrella term to describe any system that distributes data across multiple sites. There are several types of DLTs.

A Blockchain is a type of DLT that organises its data in a “chain of blocks”. Each block encompasses a bunch of data that is verified & validated and then chained to the next block. Hence the term “blockchain”.  This data  – in the form of chained “blocks” – is distributed to everyone in the network.

That’s how a Blockchain type of DLT is typically implemented. Other DLT types may choose to implement differently. Radix, Corda and IOTA are all different types of implementations of DLTs. None of which are Blockchains.

This is another frequently asked question: Blockchain vs Databases – what's the difference? Technically, Databases are used within a Blockchain system. So a comparison between a Blockchain VS Databases is akin to  a comparison between Heart and a Body. The heart lies within the body; and is a core part of the system. Similarly, databases are used within the Blockchain system.

Remember, DLTs are simply databases that are distributed across multiple sites. And Blockchains are simply a type of Distributed Ledger Technology.  So essentially, a blockchain comprises of structured databases – that are distributed.

Blockchain vs Distributed Databases

This is where things get tricky.  If a Blockchain is simply a system of distributed databases, then what's the difference between a Blockchain and a Distributed Database? This really boils down to the interpretation of a "Blockchain". 

The first Blockchain system was introduced in 2008, and its goal was to escape the shackles of centralisation. Usually, when people talk about  Blockchain technology, they are referring to a distributed system with no central control. However, when they talk about  Distributed Databases, they are referring to high powered distributed systems that have a central authority. 

To sum it up, a Distributed Database has a central authority that requires trust; while a Blockchain is typically a trustless system that has no central authority 

Can we have a system that has sufficient number of “professors” (nodes) to still maintain the security –  while being small enough to increase the speed at which your assignments are returned (throughput of the network)?

Ethereum Sharding - Structure

Okay, so I may have oversimplified a tiny bit. But now that you understand the gist, you’ll understand this part a lot easier.

In each shard/group, we have nodes that are assigned as “Collators”.  Collators are tasked with gathering mini-descriptions of transactions & the current state of the shard.

In our analogy, you can think of Collators as Teacher’s Assistants. All the TA’s in shard/group do the first run through of all the assignments within the shard.

Finally, we have super-nodes. Each super-node receives the collations created by the collators of each shard. They then processes the transactions within those collations. Furthermore, they maintain the full-description/state data of all the shards – which they get from the collators as well.

You can probably see the benefits of this structure. The number of nodes that process every single transaction would be greatly reduced, and thus increase overall throughput.