The market value of 7 days has decreased by nearly 10 billion. This problem has become the biggest obstacle to the development of Ethereum.
In the past week, the price of ETH has plummeted in a row, and the market value has shrunk by nearly 10 billion US dollars.
It is said that the big drop was caused by the ETH sold by the project side.
“Issuing tokens” is the most important application of Ethereum. Based on the Ethereum main chain, the project side generates its own tokens and raises funds in the form of ETH.
After a period of time, these unprofitable project parties can only rely on the sale of ETH to get cash and keep the company running. This is the embarrassing situation that Ethereum is currently facing.
In fact, Vitalik Buterin (founder of Ethereum) knew this problem long ago. A few years ago, he began to develop Casper algorithm based on POS consensus, to improve TPS (transaction throughput) to make more applications and Assets landed in the main chain of Ethereum.
However, when people talked about the future of Casper, I felt a bit of a worries from the conversation between Vitalik Buterin and Charles Hoskinson.
Although the PBFT (Practical Byzantine Fault Tolerance) algorithm can circumvent the risk of malicious offline of nodes, the characteristics of the application make it necessary to face the risks of the "Byzantine general problem."
This may become the biggest bottleneck that hinders asset chaining and restricts the development of blockchain.
Vitalik's argument with Charles touches the soul of POS consensus
These days, Vitalik and Charles Hoskinson (founder of ADA) conducted a heated discussion on Reddit about the stronger issues of Ouroboros (the POS consensus used by ADA) and Casper.
One of the details caught my attention. When Vitalik questioned the ADA's "end" ability, Charles said it was a probabilistic problem and could add a light BFT (Byzantine Fault Tolerance Algorithm) protocol to close the interval if necessary.
Then, Charles replied that there were only 1/3 Byzantine resistance in Karpas, but Uroporos had 1/2.
In fact, the debate between the two experts touched the POS consensus "deep in the soul."
Since the POS selects the validator based on the number of tokens in the client, when the selected validator is offline, the system will stagnate. Malicious nodes often use this method to attack the system, so Vitalik will question its "end" capability.
Usually, POS will join PBFT (Practical Byzantine Fault Tolerance Algorithm) to select the validator in a round-robin fashion. When the validator is offline, it automatically exchanges the next node for accounting to ensure the normal operation of the system. The ADA does not use the PBFT algorithm.
But Charles's counterattack is sharper, and his words directly target the most fundamental problem solved by the blockchain - the Byzantine general.
Byzantine General The sword of Damocles hanging over the POS
The Byzantine General question describes how collaborators without a foundation of trust can rely on technical means to prevent cheating, because the author of the proposal, Lambert, used the model of the Byzantine generals to attack the city to deduct the problem, hence the name.
After the study, the scholars found that the problem was solved only when the number of participants was less than 1/3. That is to say, when more than one-third of the disadvantages are used, the conclusions drawn by the participants are not credible within a certain probability regardless of the way they are calculated.
At one time, people once thought that Bitcoin solved the problem of General Byzantine by means of digital signatures and time stamps. But in 2015, Yahoo Labs scholar Juan Gray found that the Bitcoin POW Consensus was a probabilistic agreement that did not completely solve the Byzantine general problem.
When the number of defects is close to 50%, the POW algorithm does not guarantee the reliability of the results.
The POS-based Casper technology can only resist 30% of malicious nodes in some states. In contrast, Ouroboros can resist 50%.
Although Charles is very proud of this, I am concerned about the future of POS and even the entire blockchain.
Off-market profit and solutions
Despite the hidden dangers of Byzantine, there have been no major accidents in Bitcoin for more than eight years. The fundamental reason is that the market value of Bitcoin is too large, and it takes a lot of cost to attack the network. Once the network is attacked, the price of the currency is likely to go directly to zero, which is not worth the loss.
The ETH, ADA and other tokens that focus on the actual application are different. Although the network is attacked, the token price may be zero, as long as the attacker gains more benefits than the attack cost.
For example, an e-commerce listed company A is based on the Ethereum main chain development project, and the transaction confirmation is confirmed by the Ethereum network.
At the time of the company's most critical year-end promotion, a fund B invested heavily, mastered more than 1/3 of the nodes, and maliciously attacked the Ethereum network, forcing the transaction to roll back and invalidating all transactions in the past few days.
The incident reduced the revenue of Company A by nearly 100% compared with the same period of last year. When the financial report was released, Company B made a profit in the stock market.
This has led to the inability of listed companies to truly land their assets on the Ethereum main chain, as well as the technology giants participating in the Ethereum Enterprise Alliance, and more willing to develop private and alliance chains.
The recent ETH plunge also reflected the lack of value assets of the mortgage in the Ethereum main chain.
Some analysts said that the Ethereum's plunge came from the project side selling tokens to obtain cash, while the mortgaged assets in Ethereum were the funds raised by various blockchain companies, and these assets did not use the actual application to generate value.
In fact, using the weaknesses of the Ethereum main chain to profit from other transactions, this approach has already appeared in some applications. According to the media "block rhythm" report, some people crazyly created 80,000 transactions at a certain moment, forcing the Ethereum network to block, trying to swallow the Ethereum gaming application Fomo3D worth 2.4 million US dollars.
There are two ways to solve the problem: First, let more funds buy ETH, so that the cost of controlling 1/3 node is so high that the evil party can't bear it. The second is to use DPOS consensus (authorized equity certificate) to expose participants to community supervision.
However, the number of DPOS consensus accounting nodes is limited. For example, there are only 21 EOS. Once major assets fall into the chain, such as international exchange rate liquidation or the results of the US presidential election, then some real-world hidden interests in real life will affect the decentralization. Hope. Judging from the fact that V God had previously interacted with BM, he obviously would not take this approach.
So there is only one solution left.
But in a bear market, how can we get more money into ETH and increase the cost of doing evil? Only the day when the Ethereum Casper algorithm is launched is the time when the bull market returns.