[Ethereum] Can Proof of Stake (PoS) improve the number of Transactions per Second

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Currently Ethereum is using Proof of Work (PoW). From my understanding there is a limit of time between blocks for two reasons:

  • Part of that time between blocks represents the time to solve the PoW puzzle. It is kept at a certain value in order to provide a reasonable entry barrier to the blockchain.
  • The second reason for some time between blocks is for the blockchain network to have time to distribute all messages

If we move to PoS, essentially the first reason is not of importance anymore. Does that mean that we can have smaller times between blocks?

Also lets say we have a private blockchain with a small number of miners next to each other in a datacenter. Does that mean that we could have a very small time between blocks since the miners will distribute the information very fast between them?

Best Answer

Block time in Ethereum's Proof-of-Stake system (called Casper) is being conservatively targeted at around four seconds. Vlad Zamfir of the Ethereum Foundation believes the block time will ultimately end up being much lower (sub-second) while Vitalik is not as convinced on that front. Vlad discusses this in this excellent video explaining Casper: https://youtu.be/3g2CwTnn0Us

The block time is able to be lowered because validators aren't burning cash on electricity to mine, which makes producing uncles much less painful relative to the canonical block. Validators are rewarded on the basis of how they place their bets, and won't lose money so long as they always bet on blocks which make it into the security record. So their profit is slightly higher for betting on a canonical block relative to an uncle, but their cost is the same either way (and much reduced relative to PoW mining, as is the reward).

Casper therefore, in addition to its much-improved security properties relative to Proof-of-Work, is able to provide much lower confirmation latency. This does not mean, however, that we have improved Ethereum's underlying efficiency in terms of transactions per second. With Casper, Ethereum is still a single-threaded global computer, and any improvement in TPS will come from validators upgrading their hardware.

Sharding, not Casper, is Ethereum's proposed scaling solution for increasing TPS by orders of magnitude.

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