On September 15, the time had come: Ethereum switched its consensus process from Proof of Work to Proof of Stake – and in doing so wrote blockchain history. How was the merge experienced in the control room? BTC-ECHO spoke to Ethereum developer Parithosh Jayanthi about the 12 minutes that decided Ethereum’s fate.
BTC-ECHO: Introduce yourself to our readers: what do you do at Ethereum?
Parithosh Jayanthi: My name is Parithosh Jayanthi, I’m 28 years old and I’ve been working on the Ethereum Foundation DevOps team for about a year and a half. There I mainly deal with automating testnets, coordinating client teams and setting up validators.
BTC-ECHO: What was your task during the merge?
Jayanthi: I was involved in coordinating all merge testnets. Each client team had their own internal tests they ran. Eventually we got to a point where we wanted to do some interoperability testing. At this stage I was involved. So I usually create the configuration files, distribute them to all the teams, and help build the infrastructure for the merge.
BTC-ECHO: Four years of development went into the merge, the Beacon Chain has been online for two years. Were you still nervous that it would go wrong?
Jayanthi: First of all: We never delayed the merge because we never specifically announced a date (laughs). However, we’ve spent the last time doing interoperability testing and a lot of shadow forks – a special type of test where you take the state from the mainnet and then simulate the merge. This way you can find a lot of edge cases that you wouldn’t have found otherwise. Even if we have done all this, the fear of the unknown always remains. We never know if we’ve found all the bugs, although I was very optimistic.
BTC-ECHO: Were you even able to sleep the night before the merge?
Jayanthi: It took me a while to fall asleep. I went through all the scenarios in my head. I woke up a few hours before the merge because I didn’t want to miss it. The first thing I did was take my cell phone and see how much time was left. In the morning I went to the Ethereum Foundation office in Berlin, where we followed the merge with some client teams as a “viewing party”.
BTC-ECHO: How did that moment feel when the merge countdown hit zero?
Jayanthi: There was a lot of stress because we knew: This is the moment when all the things that could go wrong start. When the countdown hit zero, that’s when you move on to Proof of Stake but haven’t reached finality yet. It’s only when finality occurs that we stand firmly on Proof of Stake with both feet. This usually takes twelve minutes. So in that time span, we’re sort of in the middle: we’ve just completed Proof of Work, but we’re not quite there yet at Proof of Stake. In those 12 minutes, we’ve looked at all the charts, all of our monitors, to get the best idea of where we are. Will there be a fantastic version? Or a terrible one where we have to fix things in the next few hours? That was stressful.
BTC-ECHO: What is the biggest benefit of Proof of Stake for Ethereum?
Jayanthi: There are a couple of big advantages. The most obvious is that Proof of Stake reduced CO₂ emissions by 99.9 percent. They also got a much better security budget – you are now paying a lot less for Ethereum security. Put simply, we no longer pay miners. And Proof of Stake has lower costs because stakers don’t have to pay huge utility bills.
BTC-ECHO: How exactly does Proof of Stake increase security over Proof of Work?
Jayanthi: Proof of Stake is more robust because attacks on Proof of Work can be repeated – there is no penalty mechanism. When I attack a Proof of Stake network, there is a slashing. This occurs in one of two scenarios. If you’re malicious, anything you’ve wagered can be deducted. First just a part. After all, you can also be kicked out of the network.
BTC-ECHO: How does it work?
Jayanthi: If a node finds something that it feels like someone is behaving maliciously, it can submit this evidence to the blockchain stating: Look, this validation key signed two things. And these two things contradict each other. So once each node has received the information that this person acted maliciously and has to prove and verify the evidence themselves, they will publicly smash that malicious validator and say, okay, I have the proof, I verified the proof myself, it is wrong. So I’m going to slash that person. The validator is classified as malicious if 66 percent of the network agrees on this information.
BTC-ECHO: Couldn’t a majority of 67 percent then take control of the network?
Jayanthi: This is where the social consensus comes into play. So if 67 percent of the network is taken over by Party A and the rest by the honest minority, then the community would decide: we don’t go with the malicious majority, we go with the honest minority. And that then depends on the ecosystem, users, etc. to decide which fork they want to support. Ultimately, it’s up to the community to decide which fork is true and which fork is non-canon.
BTC-ECHO: What is the impact of Proof of Stake on Ethereum scalability?
Jayanthi: In addition to security and energy consumption, this is another advantage of Proof of Stake. One possibility is Layer 2 solutions, which have reached an enormous level of scaling today. Ethereum wants to support that by looking at things like Proof of Action. In addition, there is sharding. Essentially, it introduces the concept of layers of data on top of which one can then store other information that Layer 2 solutions require. This should increase scalability by a factor of 10 or even 100.
BTC-ECHO: One criticism of Proof of Stake is the centralization through large staking pools. Lido now controls 30 percent of all staked ether. Is there a threat to decentralization?
Jayanthi: Not necessarily. In fact, that’s one of the things I think is better about Proof of Stake versus Proof of Work. A simple example: If I have a graphics card and I try to mine a block in Ethereum, it is statistically a very, very long time. So I need to join pools. But at Proof of Stake, I have enough stake to run a validator node that is statistically guaranteed to produce blocks. That said, while I used to have variable income at Proof of Work or had to join a mining pool to generate some sort of income for myself, Proof of Stake guarantees me the income. It doesn’t matter if I have one validator node or ten. On the other hand, with proof of work, I have a strong competitive advantage if I have a data center with 10,000 GPUs. So I would actually say that Proof of Stake is a lot more decentralized than Proof of Work.
BTC-ECHO: Could the switch to Proof of Stake ensure more acceptance of blockchain technology in society?
Jayanthi: I definitely think so. I’m really glad we’re able to address one of the biggest criticisms of cryptocurrencies. And I’m hoping that really gets adoption and more people on board to get involved with this really cool technology.
BTC-ECHO: The merge is over: can you sit back for now or are the next projects coming up?
Jayanthi: I look forward to working on things that don’t need to be finished tomorrow and aren’t as critical as the merge (laughs). I’m working on a few hobby projects that are less risky but important. I’m really looking forward to that.
Do you want to buy cryptocurrencies?
Trade the most popular cryptocurrencies like Bitcoin and Ethereum on eToro, the world’s leading social trading platform.
To the provider