The Gasper Protocol: a Proof of Stake Era for Ethereum

Nowadays, it is crucial to ensure the secrecy of shared data and the validity of received information. This is the case of money exchange between two different parties, in which one must keep the data of its own bank account hidden, or the exchange of information in the military field, where an interception must be prevented. For such reasons, cryptography was born. Because of its primary characteristic of assuring secrecy and reliability, one of its main applications regards blockchains: a network composed of people who do not know or trust each other uses it to ensure valid transactions. In 2009, Bitcoin was developed: a shared, permissionless blockchain whose structure and integrity are based on a Proof of Work (PoW) protocol. Miners, users that perform the protocol, compute a value that must be lower than a specific target to prove that they have done a sufficient amount of work. This type of protocol leads to a certain centralization, due to the ever-increasing difficulty of the task, so that only few users, combining their resources in a mining pool, have the appropriate computational power to carry it out; moreover, since it is a trial-and-error kind of task, it consumes a lot of energy, so it has a great negative environmental impact. In 2013, the idea of another type of blockchain, Ethereum, was conceived. Its main purpose was not only to assure safe transactions between users, but also the possibility of implementing Smart Contracts on a distributed platform. When Ethereum went live for the first time in 2015, it used a PoW consensus protocol; only recently, on September 15th, 2022, Ethereum replaced it with a Proof of Stake (PoS) one. This change was made to improve decentralization and scalability and to limit the environmental impact of the blockchain. PoS is based on the idea that all those who take part in the protocol, known as validators, have a stake in the network, a frozen amount of the cryptocurrency managed by the blockchain, and their decisional power is proportional to that stake. The PoS protocol used by Ethereum is Gasper, obtained combining Casper and GHOST. Casper is a finalization gadget used to mark certain blocks as finalized, so that even a user with only partial information can be sure of the validity of that specific block. GHOST is based on the idea that ommer blocks, valid blocks that are in the chain but do not belong to the main one, contribute to the heaviness of a chain from a computational point of view. The chosen branch in a fork will not be the longest one, as in Bitcoin, but the heaviest one. Gasper combines these two elements in a complete PoS protocol: a user becomes a validator when he stakes a fixed amount of its Ether, Ethereum’s cryptocurrency. Validators are then split into committees and in each slot, the unit in which time is divided into, one is randomly chosen to propose a block, while the others must attest to the block obtained using GHOST. If the block receives at least two thirds of attestations, messages with which validators vote for the next head of the chain, it is finalized and added to the chain. Gasper possesses the properties of safety and liveness: two conflicting blocks, thus when neither is an ancestor of the other, can never be finalized and the set of finalized blocks will always grow. The purpose of this master thesis is the in-depth description of the Gasper protocol and its properties and the demonstration of how and why PoS seems like a better alternative to PoW.