Beginner’s Guide to Ethereum Casper Hardfork: What You Need to Know

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If you’ve been on any of the popular Ethereum web forums lately, you’ve surely seen Casper this and Casper that. But what is Casper, and what’s it mean for everyday Ethereum users like yourself? Today’s guide aims to bring you up to speed and answer that increasingly pressing question. Let’s get to it.

Ethereum’s Proof-of-Work

Currently, Ethereum’s associated cryptocurrency, ether, is a Proof-of-Work (PoW) coin; simply put, this means ether miners are responsible for computing complex algorithms in order to secure consensus and support the Ethereum network’s vitality.


Image Credit: Genesis Mining

The Casper update’s mission is straightforward, then: to shift ether from being a PoW coin to a Proof-of-Stake (PoS) coin.

The Shift To Proof-of-Stake

As opposed to the PoW consensus protocol, the PoS protocol achieves consensus through stakers—sometimes referred to as minters, too—who “stake” their coins by locking them down in specialized wallets.

With these stakers at work, mining will become redundant, meaning the Ethereum network post-Casper will rely on stakers and staking pools instead of miners for its operability.

And, like miners, stakers will be rewarded for their service to the network. “Minters” will receive an annual dividend of ether (collected from network fees), so staking would be a lucrative endeavor for those with enough coins.

Naturally, then, the more ETH you stake, the larger your annual dividends will be.

For now, Ethereum’s developers haven’t arrived at a hard number for the amount of ETH that will be required to stake. What they have confirmed, though, is that the number will likely start out higher before gradually being brought considerably lower.

For instance, Ethereum founder Vitalik Buterin has recently thrown around a guesstimate of needing approximately 1,000 ETH to be one of the network’s inaugural stakers. He said that number could be dropped down to as low as 10 ETH over time.

Whatever the number ends up being, users will still be able to band together and create “staking pools,” just like there are robust mining pools in the Bitcoin and Ethereum communities today.

You’ll simply pitch your desired amount of ether in, lock in down with your peers, and rake in the dividends together (to be shared proportionally, of course).

Who Created Casper?

Well, the Casper update is certainly a team effort, but it’s inarguable that top Ethereum researcher Vlad Zamfir has been at the vanguard of the update’s development for years now.

Educated at the University of Guelph, Zamfir’s a self-described “researcher known for his work on ‘cryptoeconomics,’ proof-of-stake and blockchain sharding in the Ethereum ecosystem [ … and] ethics in the use and governance of blockchain technology.”

You can find his LinkedIn profile here and his Casper repository on GitHub here.

Scaling Ethereum

With Casper, the name of the game is long-term sustainable scaling. For the Ethereum network to be able to achieve mainstream adoption, it needs to be able to handle extremely large amounts of transactions in seconds. To this end, Casper is designed to help Ethereum achieve this much-need, large-scale network scalability.

Other Problems That Casper Solves

There are two other fundamental issues beyond scalability that Casper will be focused on tackling:

  • Censorship: currently, Bitcoin miners enjoy a zero-sum game dynamic—if a miner’s block is censored/gets lost, then every single one of their competitor miners benefit accordingly. Ethereum’s PoS will shift the network to a “coordination game” dynamic, wherein everyone benefits more if all miners’ blocks get included on the chain.
  • Costs: through Ethereum’s current PoW protocol, satisfactory security can only be maintained through high operating costs. Casper will ease this dynamic, by making it so honest validators can cheaply validate while attackers’ costs are conversely extremely expensive.

Added Perk Of Casper? Cuts Down On Insane Energy Usage Of Crypto Miners

By and large, electricity is still generated in most places by fossil fuels, meaning the incredible energy consumption that goes into mining cryptocurrencies in general is only contributing to human civilization’s runaway energy consumption—a dynamic that’s bolstering the harmful effects of climate change as we know it.

Indeed, ether miners currently consume approximately 2.5 TWh of electricity per year – a level of electricity equivalent to what nations like Mauritius or Gabon would consume in an entire year.

After Casper’s implemented, ether mining will die off, which means so, too, will ether miners’ growing energy consumption.

So while Bitcoin’s PoW protocol has the current #1 crypto’s network energy consumption levels set to continue jettisoning, Ethereum’s Casper update will help put an end to Ethereum’s smaller but still significant mining-related energy consumption.

When Is Casper Coming?

At a developer’s meeting at the end of October, Ethereum creator Vitalik Buterin recently remarked that Casper could be bunched up with the second and upcoming hard-fork update of Ethereum’s Metropolis overhaul, the so-called “Constantinople” hard-fork.

Per Buterin:

 “Theoretically, Casper may well be at the stage where we may actually just try doing it for the next fork, even if that sounds ambitious.”

“It should be done … I would say very soon. The parts that aren’t done are fine details of the contract. The actual spec of the [Constantinople] fork is not going to be particularly complex. It’s basically just increase the balance of a contract then change the fork choice rule by adding a couple function calls going into the Casper contract. If those details change, that would not affect anything of the client implementation by much.”

For now, though, there’s been no announcement from the ETH devs on exactly when Constantinople—and thus potentially Casper—will occur.

Casper Is Much-Needed

In other recent comments to the press, Vitalik Buterin stressed that Ethereum’s current scalability issues are paramount and must be solved quickly.

There’s decentralized applications (dapps) in the space that are being held back because of Ethereum’s current limitations, per Buterin:

“The applications are there…all are on backburner now precisely because scalability is not there. I personally have cut down evangelism precisely because I see that the main bottleneck is now not interest, but tech.”

Vitalek Buterin

(Buterin: one of the main geniuses behind Ethereum – Image Credit: Coin Fox)

Two Types of Casper

Right now, there are two renditions of Casper:

  • Casper FFG (Friendly Finality Gadget)
  • Casper CBC (Correct By Construction)

Casper FFG is pioneered by Buterin; this rendition will make it so that the Ethereum blockchain will “pause” after every 50 blocks to let stakers validate and establish consensus on the chain.

Casper CBC is conversely pioneered by Zamfir; this rendition makes it so that a “safety oracle” constantly fine-tunes a partially built PoS protocol until the safety oracle completes the system.

When all is said and done, the final implemented version of Casper will undoubtedly draw heavily from both Buterin’s and Zamfir’s different renditions.


The Casper update will be a blockbuster update that will fundamentally change the way the Ethereum network functions—greatly for the better, the network’s developers hope.

The lucrative possibilities of staking, too, should attract a whole new generation of Ethereum users once Casper’s live. It is much anticipated within the Ethereum community, that once Ethereum moves to Proof of Stake, the price should rise quickly and exponentially as more and more Ether is tied up in Staking which will reduce the available supply. If you are looking to become a staker, it is wise to stock up on as much Ether as possible before the fork happens.

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Editor-in-Chief of Blockonomi and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all. His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. Contact


  1. Avatar
    Graham Anderson Reply

    Under “Casper is Much Needed” heading, assuming ‘Buterik’ should be Buterin.


  2. Avatar

    Well, PoW wasn’t verifying anything, it was just a barrier that needs to be crossed before anything can be written into blockchain.
    That barrier of time makes it quite hard for anybody to double spend immediately the same coin through different peers.
    Am I right?

    And how does PoS work conceptually?
    Just locking ETH doesn’t mean anything. Why is it locked at all?
    Is there a mining phase at all in PoS?

  3. Avatar

    Is there any tutorial or how to on setting up a staking node for Casper?.. Would not the official wallet do this automatically?. I would like to know what the minimum hardware and software requirements are. I have searched searched and searched but not found any place to find a simple guide or much less anything to explain how to do the staking.

    • Avatar
      Oliver Dale Reply

      Hi Robb,
      There are no guides at the moment as the fork hasn’t actually happened – it’s possible sometime in 2018 or maybe 2019. Nearer the time there should be plenty of info on how to do it, the requirements and so on.

  4. Avatar

    I don’t get how ether are going to be created in a PoS world? Where is the mining process going to happen?

  5. Avatar

    (Rookie Question) When Casper launches does my Ether then become irrelevant? And will there be a new token / coin for Casper? i.e is there a benefit to continue to purchase ETH?

    • Avatar
      Oliver Dale Reply

      No they won’t become irrelevant, if anything the price will increase as you can then “stake” them to earn passive income.
      Casper is not the name of a new coin, just the name of the update itself that is proposed.

  6. Avatar
    POS is Centralized Network Reply

    Everything needs computing power of some sort! POS will centralized to few network computing power to do much work. It will no longer decentralized if you’re relying on Visa to perform computing transactions for example.

    • Avatar

      Indeed I am wondering the same.

      Casper might reduce the complexity or redo the way the way the calculation or validation is done. But at the end of the day, you’ll computing power/processing power in order to meet the raising transactions.

      So without miners and without the computing power, how will you manage to meet that demand? Are we moving to ASCI based gear to setup “Stake masternodes” and wouldn’t that contradict the concept of decentralization? Wouldn’t we see that Stakers with most Ether will also be the ones with the Largest amount of computational power and thereby we will see the network move from a lot of small nodes to Larger semi-centralized ones?

      Guess my main question is where will the computational power for the network come from?

  7. Avatar

    Hi Oliver,

    what will happen to cloud mining contracts after the fork?
    How can you be sure that the price of Eth shall increase, not decrease after the work? (I am referring to the passive income).

    Best Regards,

  8. Avatar

    as you said mining becomes redundant
    what would happen to miners and GPUs then?
    where would the computing power of the ethereum network come from after POS?
    for me as a miner with alot of GPUs and no stakes, should i go to mine another coin?

  9. Avatar

    Hello. I am currently locked into a mining contract. Mining ETH. So should I mine while I can and Store my ETH coins? Will they be worth more after Casper. Or should I sell them while I can to try recap my capital? Thanks

    • Avatar

      My understanding is that you should keep and stake up as much as ETH as possible before the fork, then join in some stake/forger pool with your amassed ETH and be paid proportionally after that. Price of ETH should go up as there are no more new ETH created by mining, hence increasing demand and price. Theoretically.

      Then you could switch to mining another coin with your miners (probably not possible under your mining contract terms)…

      What I DO NOT understand on the other hand, is how forge system will work IRL. I.e when you lock your ETH in forger pool, what will be the conditions to withdraw them if you will needing them or how often will you receive the forger dividend (based on ammount of ETH locked in the system) , if by reaching some minimal payout or by some time ammont (really only annualy/once a year???)

      And also what the ether rewards will be for staying plugged into “system” with some computing power for processing and what kind od hardware will be required under POS…?

      • Avatar

        Thanks for your reply. Still a bit concerned about this whole thing.

  10. Avatar

    As far as many masternodes doing all of the transactions, thus centralizing all of the work, I would like to point to PIVX, which is a PoS coin. I have a PIVX wallet on my computer. As long as my wallet is online on the internet, it will be part of the ‘minting’ pool. I only have 12 PIVX, but already I have some of the rewards from this. There are Masternodes in PIVX, and they are balanced with rewards so that regular, non-masternode wallets all get an equal share of the rewards. If not many wallets are online, the masternode reward goes down in favor of the smaller wallets. If the load becomes to great for the wallets then the masternode reward goes up. At least that is my understanding of it.

    As far as reducing energy consumption, I doubt it. It will just spread it out more over more, smaller computers using more energy, just not all tied up in mining rigs like PoW coins. I am currently a ETH miner. Not a big one, but I do take pride in providing a service to the ETH users. I have the ETH wallet. I have run it on my normal PC at home and ran it overnight for several night. It NEVER caught up to the blockchain. I do not like this idea so far. But I do like the PoS concept as implemented by PIVX.

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