Proof of stake is an alternative consensus mechanism to proof of work. On proof-of-work blockchains, like Bitcoin, users stake computing power to verify blocks. On proof of stake, users stake currency. The advantage is that you don’t have to have powerful mining networks, saving money, energy, and planet Earth.
Proof-of-stake consensus will be implemented one day by Ethereum, but much work is left to be done. CasperLabs says proof of stake is faced with a number of security issues: a proof-of-stake protocol worth its salt has to safe—it must make consistent decisions, and it must be live—there must be some guarantee that it’s actually making those decisions.
Ethereum Researcher Vlad Zamfir addressed safety in a paper last year, “CBC Casper,” but not liveness. CasperLabs Highway, for the first time, addresses both. Highway does this by having a “summit,” where consensus can be said to have been made, and “levels” of agreement.
CasperLabs asks us to think of “mathematical highways,” where the speed of cars is constant, but where cars in different lanes send messages over time. The leader car sends a message, which prompts the car in the next lane to send a message to the car in the next lane, and so on. Confirming messages leads to different levels of agreements, which can be reached in a certain time period, or “rounds.”
To do all of this effectively, the process of moving “lanes” is dynamic: if the message is switched to the left lane, the frequency of switching doubles. If you send a message to the right lane, the frequency of switching halves. Thus, the direction of the spread of the message determines the frequency of lane switching, and determines the length of the round.
The point of all this is to make everything quicker, without sacrificing on safety.
Does it work? We don’t know yet. It’s just been released under an open-source license, and the CasperLabs team hopes to garner feedback.