The very first version of Hybrid Casper is now out, indicating one of ethereum’s biggest upgrade may be ready in weeks, not months.

This isn’t quite the fully finalized version, it is only 0.1, but Hybrid Casper is now clearly pretty much fully fleshed out with just crossing the t-s and dotting the i-s left to be done.

“More than just the research team is using the contract now — auditors, client devs, etc — so we wanted to start issuing clearer versioning and changelogs to help everyone stay organized,” Danny Ryan, an ethereum developer, says.

A number of academics and others are auditing the code to ensure all can be safe when it launches. While Geth and Parity, the two main ethereum clients, have now begun implementing it too.

That means hybrid casper may be out this summer if all goes well, with the release of the first version one small step towards this big milestone.

Its aim is to incrementally remove Proof of Work (PoW) miners and replace them with Proof of Stake (PoS) stakers.

Instead of electricity or hardware standing as proof that it is actually a non-fakable “person” “voting” on who has what eth to spend, once full casper launches it will be eth to be used for the purpose of preventing double spending and maintaining network consensus.

In the hybrid version, the two will co-exist for some time of around two years when a PoS difficulty bomb kicks in to complement the PoW exponential difficulty increase that kicks in after a period of time to ensure the network moves to full PoS.

During this co-existing period PoW miners will receive significantly less block rewards at just 0.6 eth per block. Down from the current 3 eth per block. While PoS stakers will receive 0.22 eth per block, bringing overall inflation down to 2%, half that of bitcoin’s current 4%.

In practical terms, staking for end users will be as easy as clicking deposit, Vitalik Buterin, Ethereum’s inventor, said at Edcon.

Some 1,500 eth will initially be needed to stake, but there will be staking pools. That will drop to 32 eth once Sharding v 0.1 goes out.

There is some risk in staking, but if it is a problem with just one staker then the risks appear fairly small at just a potential loss of 2% of the stake in extreme circumstances or if they misbehave. If, however, others misbehave at the same time, the punishment can become very painful very quickly to the point of all the stake being lost.

Which is why it is important to go against the crowd when designing the staking gear. Unlike in PoW where a big pool means predictable rewards, in PoS a big pool means a potential risk of losing 100%, while a small pool might mean a risk of losing just 2%.

That’s why you want to do what others aren’t doing, or you want to use systems others aren’t using, or generally you want to go against the crowd and do things differently, because punishment depends on not just whether you are misbehaving or whether your hardware accidentally does something wrong, but also on whether that applies to others.

If not, and it is just you, then no one really cares, but if it is say 10% of others at the same time, the system can get very angry very quickly.

The point of all of it is securing the network so that eth isn’t copyable, but as far as the staker is concerned the point of it is to get the estimated 5% yearly reward.

Estimated because it depends on how many others are staking. If 2.5 million eth, then it’s 10%, if 10 million it’s at 5% and if 40 million, which would be quite incredible as it would be nearly half of all eth, then it’s at “only” 2.5%.

We say “only” because the best comparison for staking rewards is really dividends. Now that’s a very imperfect comparison for many reasons (so get off SEC), but a savings account comparison is even more imperfect as the initial stake itself in a savings account, say the $1,000, does not grow in value and become worth say $10,000 while not accounting for the interest itself.

Buying a stock might mean its value grows, and it usually does at around 8% a year, but here in eth you would have a dividend of 5% of actual eth on top of however much eth’s value itself might grow against gold or house prices or the printed like there is no tomorrow fiat dollars.

Final point here is that if anything goes wrong no one should be surprised. All has been done to ensure or at least minimize the chances of something going wrong, but man will never be perfect so there might be some bug somewhere.

In which case it would only be temporary. It is code, you just delete the bug or you fix it and we’re done, up and running like nothing happened Nakamoto style after 1 trillion bitcoin were printed out in 2010 and he made them vanish just like that.

This upgrade has been anticipated for a long time. Once it launches eth will become something more refined. A bit cleaner, a bit greener, a bit more efficient, and a bit of a milestone.

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