Kaspa: A Leap in the Blockchain Trilemma | Altcoinist Official Review

Kaspa: A Leap in the Blockchain Trilemma | Altcoinist Official Review
Tip: KASPA in Old Aramaic means “money” or “silver.”

Project Overview

  • Kaspa is the fastest, open-source, decentralized & fully scalable Layer-1
  • The vision behind this project is to build a Nakamoto-like service that operates on internet speeds, to build a system that surpasses the limits of Satoshi's V1 protocol (aka Nakamoto Consensus) yet adheres to the same principles embedded in Bitcoin.
  • Fair-launched, no pre-allocations, no reserves, no company, no CEO
  • 10 years of research behind the project
  • The world's first asynchronous consensus mechanism to order the world's
    first blockDAG - a digital ledger with fast-rate parallel blocks (1 BPS, soon
    10 BPS, eventually 100 BPS
    ), instant transaction confirmations, and near-instant settlement.
  • Built by industry pioneers, led by the people.

The Best of Both Worlds: Bitcoin and Ethereum

Since its creation, blockchain technology has been a cause célèbre in the world of finance, redefining our understanding of digital currencies. However, the "Blockchain Trilemma" - the challenge of balancing security, decentralization, and scalability - has proven a tough knot to untie for the crypto community. Kaspa, a novel cryptocurrency, endeavors to tackle this conundrum head-on. With its unique blend of features, including scalability and deflationary properties, it sets itself apart from the crowd.

"We are taking Nakamoto's Proof-of-Work algorithm to the next level by utilizing a blockDAG that, in practice, allows us to speed up the chain more than tenfold. Today, we are already 15 times faster than Ethereum, and with optimization, we think the technology can get us to roughly 100 blocks per second" - Yonatan Sompolinsky.

Founded by esteemed computer scientist and blockchain researcher Yonatan Sompolinsky, Kaspa merges the foundational elements of Bitcoin and Ethereum. It takes the best of these two worlds and builds upon them, establishing an intriguing blend of features tailored for the future of decentralized finance.

The base consensus layer of Kaspa, modeled after Bitcoin's proof of work consensus, guarantees high throughput and fast confirmation times, courtesy of the PHANTOM protocol. This protocol ensures that the cryptocurrency is backed by a 51% security, a high number of mining validator nodes, and boasts a subsecond first confirmation with ~10-second fully confirmed transactions.

The second layer of Kaspa, on the other hand, draws from Ethereum's Layer 2 smart contract scaling solutions. This layer aims to support Ethereum virtual machines (EVM) and other virtual machines, adding versatility to the Kaspa platform and opening new doors for its application in decentralized finance.

KASPA solving the Blockchain Trilemma

Kaspa uses the PHANTOM protocol in its consensus layer to resolve the blockchain trilemma. The protocol forms a directed acyclic graph of blocks (blockDAG), incorporating "orphan" blocks into the chain and employing a novel greedy algorithm to order these blocks. This approach increases the efficiency, speed, and security of the platform while solving the trilemma and paving the way for practical applications of blockchain technology.

The result is a decentralized currency that acts as a store of value while being geared towards supporting decentralized finance applications. With fast confirmation times, high throughput, and a scalable consensus protocol, Kaspa introduces a new phase of financial application potential.

The Visionaries Behind Kaspa's Rise

Kaspa, the brainchild of a visionary computer scientist known as Yonatan Sompolinsky, stands as a testament to his unwavering passion for blockchain technology and relentless drive to innovate. Yonatan's journey began at the Hebrew University, where he pursued his undergraduate and doctoral degrees in computer science. His years of dedication and refinement have allowed Kaspa to secure its unique position in the bustling realm of digital currencies.

As a postdoctoral researcher at Harvard, Yonatan delved deep into blockchain technology, focusing on the GHOSTDAG protocol. His work aimed to enhance the scalability and security of blockchain networks, solidifying his reputation as an expert in the field. His profound understanding of consensus algorithms and blockchain scalability distinguishes him as a visionary researcher.

The GHOST protocol, proposed by his project supervisor Aviv Zohar, sparked Yonatan's research interests. This proposal evolved from a laboratory project into a comprehensive research paper and ultimately, a thesis. The broader community's enthusiasm for the GHOST protocol motivated Yonatan and his team to dedicate substantial efforts towards the development of Proof-of-Work (POW) based Directed Acyclic Graphs (DAGs). This line of research culminated in Yonatan's doctoral dissertation, offering a robust and comprehensive alternative to traditional blockchains.

If you want to go deeper into the rabbit hole about who Yonatan Sompolinsky is, please read Captain Sats 𐤊 's excellent thread:

There's an intriguing thread by Crypto Phoenix discussing the possibility that Yonatan is Satoshi Nakamoto himself:

Emission Schedule and Deflationary Properties

Another critical feature of Kaspa is its emission schedule and deflationary properties. The Kaspa Monetary Policy operates in two phases: the pre-deflationary phase, which ended in May 2022, and the chromatic phase, which sees the block rewards decrease over time based on a musical 12-note scale.

Note: The policy dictates how many coins are minted per second regardless of the block rate. Therefore, should the block rate change, the reward will be adjusted accordingly to maintain the same emission rate.

  • January 1st, 2023, approximately 15.3B KAS will have been mined (53.3%)
  • January 1st, 2024, approximately 21.9B KAS will have been mined (76.3%)
  • January 1st, 2025, approximately 25.1B KAS will have been mined (87.4%)
  • July 10th, 2026, about 95% of all KAS will have been mined

It will take about 36 years for the block reward to fall below 1 Sompi (smallest divisible unit of Kaspa), meaning the reward is essentially 0 (in this case, the block rate is kept as 1 BPS (Blocks per second). Otherwise, the time will shrink for log2 (new BPS) years. So, for example, if 32 BPS is established, the new zero-reward date becomes 36 — log2(32) = 36–5 = 31 years from the mainnet start.

KAS emission schedule graph

This emission schedule and fast deflation rate are designed to counter the issue of ASIC dominance. The low hardware entry barrier allows for a more democratic distribution of mining power, making the ROI for potential miners significantly less intimidating than that in Bitcoin.

Token distribution, we've never seen before...

One of the reasons we're incredibly bullish on KASPA is the fully decentralized token distribution, with no whales, ICO, reserves, or pre-mine allocation. This approach ensures a fair and equitable distribution of tokens, eliminating the risk of market manipulation by large holders, often referred to as 'whales'.

This not only fosters a sense of trust and transparency but also provides an equal opportunity for all participants, regardless of their investment size. As a result, KASPA token holders can have confidence in the stability and integrity of their investment, knowing that the value of their tokens is reflective of genuine market dynamics rather than the actions of a select few.

KAS Token Distribution (Without Exchange Wallets)

Of the total circulating supply of 19,312,669,004 KAS:
Top 100 KAS holders hold 22.43 % ( 4,332,083,136 KAS )
Top 10 KAS holders hold 6.25 % ( 1,207,744,647 KAS )
The top KAS holder holds 1.27 % ( 245,006,235 KAS )

Source:  https://www.lookintokaspa.com/pie

Deep Dive into Kaspa's Technology

Kaspa's technology is a significant departure from traditional blockchain structures. The BlockDAG architecture allows for a high block rate and virtually instant transaction finality up to the limits of internet latency. This makes Kaspa the fastest proof-of-work cryptocurrency currently in existence, with the potential to operate at 32 blocks per second with the upcoming Rustlang rewrite.

The technology is based on the Nakamoto Consensus (NC), which uses the longest-chain rule as its core protocol. Kaspa has extended this rule to create a blockDAG that references all mined blocks within the structure, which is secured via proof-of-work by a robust network of miners and nodes. This makes Kaspa the first proof-of-work cryptocurrency to solve the orphan block problem, a common issue in traditional blockchain networks.

Read the latest update on the KASPA testnet from @DesheShai's tweet:

Smart Contracts on KASPA:

  • Kaspa is currently not equipped with smart contracts, but it was designed to support them on a large scale.
  • The platform has refined event sequencing functionality, making it suitable for smart contracts.
  • Kaspa supports computation and validation separation via roll-up technology.
  • Potential benefits of Kaspa for smart contracts include speed, throughput decentralization, censorship resistance, fairness, and resistance to Miner Extractable Value (MEV).
  • Kaspa could potentially serve as an ideal network for smart contracts for all participants.
  • The development of smart contracts on Kaspa would be a substantial project, requiring significant research and development efforts.

Market Opportunity

Kaspa's native token, $KAS, gained more than 6900% over the last year during one of the bloodiest altcoin bear markets in crypto history.

KAS 1-year performance during the bear market: +6,976%

Is it over? Probably not. In fact, $KAS has a strong chance of being the leading performer when the next significant bull run occurs, and it has the potential to reach a market cap of 100B, similar to $ADA during the last cycle.

Kaspa price with Cardano ATH

Final Thoughts

Kaspa, a groundbreaking cryptocurrency, is set to redefine the digital finance landscape with its unique BlockDAG architecture and community-centric approach. The upcoming Rusty Kaspa upgrade promises enhanced functionality and user experience, bolstering optimism in the crypto community. Founder Yonatan's relentless drive for improvement and adaptation, coupled with Kaspa's community-driven ethos, positions it for exponential growth. More than just a digital coin, Kaspa is a scalable, technology-driven solution addressing crypto space challenges. Backed by Yonatan Sompolinsky's expertise, Kaspa is a promising contender in decentralized finance, making it an exciting opportunity for future-focused investors.

In conclusion, Kaspa is a revolutionary cryptocurrency that has managed to solve the blockchain trilemma with its unique BlockDAG architecture, community-driven approach, and fair tokenomics, making it a standout in the crowded crypto space. As the world continues to embrace decentralized finance and blockchain technology, Kaspa is well-positioned to play a significant role in this new era of digital finance.

KASPA developments

Kaspa's upcoming Rusty Kaspa upgrade is a strategic move to enhance functionality, efficiency, and user experience. As the crypto community eagerly awaits the beta release, the progress made thus far instills optimism in the Kaspa community. The upgrade is expected to provide a faster, more stable, and more secure experience, further solidifying Kaspa's position as a leading cryptocurrency project.

The project's founder, Yonatan, has shown a relentless drive to improve and adapt, which has allowed Kaspa to carve out its niche in the increasingly crowded cyber-world of digital currencies. This drive, coupled with a community-driven ethos, positions Kaspa well for future growth and success.

Kaspa is not just another digital coin; it is a technology-driven, scalable solution aiming to resolve long-standing issues in the crypto space. Its unique features, backed by the expertise of Yonatan Sompolinsky, make it a promising contender for future applications in decentralized finance. For anyone looking to be part of a future-proof blockchain project, Kaspa is definitely one to watch.

KASPA has already been listed on numerous exchanges.