[Ethereum] Who will run the network after proof of stake

The fundamental flaw of Proof of Work (PoW) is that the costs of attacking the system are equal to what is spent to run the system. High security thus can only be achieved at high operating costs. The idea is that the honest participants just outspend the dishonest.

This is already today highly inefficient, but it does work for Bitcoin. As soon as the block subsidiary starts reaching zero, the ratio between the Market Capitalization and the costs of attacking Bitcoin becomes critical. Details are presented here.

Why Proof of Stake?

• Costs

Proof of Stake (PoS) promises to solve this problem. An honest validator is expected to have very low costs, compared to the costs an attacker would incur.

• Less Censorship

Another problem Casper tries to solve is to disincentivize censorship. The PoW schema of Bitcoin is, more or less, a zero sum game. This means, if a miner loses a block (it does not get included in the main chain/ it gets censored), all other miners benefit from their loss. PoS for Ethereum will not be a zero sum game but instead a coordination game, where the rewards for everyone are highest, if every participant can include their blocks.

• Scalability

Finally some scalability problems can be addressed more easily with PoS.

There may well be multisig stake pools which allow multiple parties to stake their Eth but there will not be mining pools in the sense of contributing processing power to a pool.