Kaspa is a project that aims to build on the foundation laid by Bitcoin, the original and most well-established cryptocurrency. As the first decentralized digital currency, Bitcoin has withstood the test of time and Kaspa recognizes this seeks to leverage its strengths while addressing some of its limitations, particularly in terms of transaction speed and scalability.
In this article, we examine Kaspa in detail and explain why Kaspa has developed a following in the cryptocurrency community.
Kaspa utilizes a proof-of-work consensus mechanism and describes itself as the fastest and most scalable Level 1, instant validation transaction layer.
Based on the GHOSTDAG Phantom protocol, Kaspa offers a scalable generalization of the Bitcoin consensus.
With a name derived from the Aramaic term for ‘silver,’ it wants to represent a purpose as a complementary digital asset to Bitcoin, the digital ‘gold.’
The branding of Kaspa captures this thought as well, an ordered circular logo that is worn for usage, representing a silver coin, marked with a stylized letter ‘K’ similar to paleographical scans from ancient Aramaic script.
In 2021, Kaspa emerged as a blockchain-based project created by a group of talented developers and blockchain enthusiasts. Yonatan Sompolinsky, the founder of Kaspa, along with Professor Aviv Zohar, who conceived the Ghost Protocol, which laid the groundwork for the block Directed Acyclic Graph technology used by Kaspa.
Some other core developers and researchers contributing to the Kaspa network include:
Michael Sutton Shai Wyborski Mike Zak
Elichai Turkel Ori Newman Anton Yemelyanov
This review of Kaspa (KAS) was created for informational purposes. This article is not intended for promotion.
If we take a look at Bitcoin, we see that it addresses network latency by spacing out block confirmations to every 10 minutes, effectively reducing conflict but also limiting transaction speed and scalability.
Kaspa was developed with the goal of creating a consensus protocol that remains faithful to the proof of work paradigm but is equipped to handle high internet latency effectively.
To understand better, we take a look at their infrastructure in detail…
GhostDAG is reportedly the only decentralized protocol that fully solves the trilemma. As it operates in a way that transactions are consistently ordered and finalized.
It is a refined version of the Nakamoto Consensus, a technology that differentiates honest blocks from dishonest ones, establishing a reliable set of rules on the blockDAG. It also has less energy consumption compared to traditional PoW networks.
It is a proof-of-work consensus mechanism that generalizes the Bitcoin protocol to a direct, open chain graph of blocks called blockDAG.
The Directed Acyclic Graph (DAG) architecture allows each block to point to multiple previous blocks rather than simply the previous one, like traditional linear blockchains.
The Crescendo Hardfork represents an upgrade for the Kaspa blockchain network and is scheduled to take effect on May 5, 2025. This hardfork will transition the network from producing one block per second to ten blocks per second.
This change reduces the time between blocks from 1,000 milliseconds to just 100 milliseconds.
Furthermore, the Crescendo Hardfork is designed to address and improve several key aspects of the Kaspa network:
Currently, Kaspa does not support smart contracts directly. However, they envision a scenario where smart contracts can be integrated. Transactions would be sent on-chain, recorded by the consensus nodes without them necessarily understanding the specific functionalities of the transactions.
Then the nodes view smart contract instructions as additional data attached to regular transactions. The interpretation and execution of these smart contracts would be handled by specific nodes, known as rollup operators or provers, similar to systems implemented on Ethereum. But this is not yet launched.
The Kaspa Rainbow Chart calculates a linear regression on log-log scaled data of Kaspa’s price history. It then creates an envelope around the price action, identifying potential support and resistance levels. The middle band of the chart, while not representing the “fair price” as per the power law, serves as a midpoint between the lowest and highest regression lines.
Kaspa was launched through a fair-launch that encapsulated the ‘no pre-mining, no pre-sale’ phrase, assuring a net-zero allocation to ensure the network is 100% decentralized and community managed.
Kaspa’s token distribution is rooted in its fair launch model, meaning there was no pre-mine, pre-sale, or insider allocations. All tokens are distributed through Proof-of-Work (PoW) mining, ensuring a decentralized and transparent process from the network’s inception on November 7, 2021.
Kaspa does not have a vesting schedule. The project was fair-launched, meaning there were no pre-mines, pre-sales, or token allocations to insiders, teams, or investors. All tokens are distributed exclusively through Proof-of-Work (PoW) mining;
Because Kaspa employs the same proof of work algorithm as Bitcoin, or is similar in many ways, Kaspa is mineable with ASICs. Initially, it was possible to mine it with CPUs and even on mobile devices, and then with GPUs. Those times have long since passed (they ended around mid-2023) because ASICs’ specialized mining machines have taken over most of the Kaspa network’s hashrate.
Technically, it is still possible to mine Kaspa with a GPU or even a CPU, but this endeavor results in a negative profit; you would end up paying more for electricity than you could acquire by selling the mined Kaspa.
While Kaspa is one of the earlier projects starting building on Bitcoin, it has undergone some changes along the way. One of them is the migration to Rust from Golang (code language) that enabled developers to optimize the blockchain’s infrastructure, supporting higher transaction throughputs with increased block rates.
Also, contrary to conventional wisdom, Kaspa demonstrates that ASIC mining can contribute to decentralization. The platform’s high block production rate (VPS) allows for a larger number of miners to participate in the network, which enhances decentralization.
For instance, while Bitcoin can support around 120 miners or pools with a reasonable return on investment, Kaspa could potentially accommodate up to 1.5 million miners or pools due to its higher VPS.
The timeline for when we are going to see smart contract functionalities on Bitcoin will be for us to witness. If this is the case, it would mean a new era for Kaspa and perhaps for bitcoin holders that can earn on the biggest, oldest blockchain.
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