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What Is Kaspa (KAS) Blockchain?

The Kaspa (KAS) blockchain is a decentralized, open-source, and scalable Layer-1 solution often referred to as “Bitcoin 2.0” or “the next Bitcoin.” However, Kaspa is unique in its own way despite functioning very similarly to Bitcoin. Just like Bitcoin, Kaspa is a proof of work (PoW) cryptocurrency, but unlike other traditional blockchains, Kaspa implemented the GHOSTDAG protocol.

This protocol is unique in the fact that it does not have orphan blocks created in parallel. Rather, it allows them to coexist and orders them in consensus. This makes Kaspa the first of its kind to do this, with the blockDAG (Block Directed Acyclic Graph) protocol being a generalization of Nakamoto’s consensus.

The Founder And The Team Behind The Kaspa (KAS) Network

The founder of Kaspa is Yonatan Sompolinsky, a Ph.D. in Computer Science at Havard University and a member of the Maximal extractable value (MEV) research team. He was also in Ethereum’s whitepaper and rumored to be in Ripple’s whitepaper as well.

Sompolinsky had direct input in creating Ethereum’s technology design, having designed the GHOSTDAG protocol earlier. Interestingly, the founder’s 2013 paper on the GHOSTDAG protocol is cited in Ethereum’s whitepaper.

The development team is made up of very talented individuals such as Cryptography Researcher Elichai Turkel, Doctoral student Shai Wyborski, Developer Ori Newman, Master of Computer Science Michael Sutton, and Developer Mike Zak. They have all contributed to the implementation and ongoing development of the Kaspa blockchain network.

Kaspa (KAS) network

Differences And Similarities Between Kaspa (KAS) And Bitcoin (BTC)

At the very base of its technology, Kaspa is very similar to the Bitcoin network in the way it’s structured. Some of these similarities are outlined below:

  • Utility: Bitcoin is a Layer 1 blockchain solution that functions as a store of value, often referred to as digital gold, functioning as a peer-to-peer cryptocurrency. Likewise, Kaspa is a Layer 1 solution purported to be a store of value and functioning as peer-to-peer cash.

    Related Reading: What Are The Top 8 DeFi And Web3 Wallets To Use In Crypto?

  • Limited Total supply: Bitcoin has a maximum total supply of 21 million BTC to be ever mined, meaning new coins can never be created after all of these coins are mined. In a similar fashion, Kaspa has a maximum total supply of 28.7 billion coins, with a little over 22.5 billion in circulation. 
  • Halving Events: Both Kaspa and Bitcoin undergo halving, which slashes the block rewards for miners in half. However, while Bitcoin undergoes a halving event every four years, Kaspa uses a Chromatic Halving Schedule, “meaning that rewards smoothly decrease every month in a quantitative manner that results in a 50% emission reduction per annum,” according to its website. 
  • Decentralization/Proof of work: Both blockchains employ a decentralized proof of work mechanism, meaning that the network is secured by miners who solve complex mathematical equations to mine blocks and confirm transactions. Unfortunately, this also means that both networks are energy-intensive and require a lot of power to run. 

One major difference between both networks is that Kaspa solves the issue of scalability that continues to plague Bitcoin. This means that while both networks use a proof of work mechanism, Kaspa is able to carry out transactions at a faster rate as well as cheaper fees.

How Does Kaspa The Blockchain Solve Trilemma Issues?

The Blockchain Trilemma refers to the three critical aspects of blockchain technology, which are security, scalability, and decentralization. This trilemma continues to plague leading blockchains such as Bitcoin and Ethereum, and they continue to battle these issues. This is because, in order to ensure security and decentralization, something had to give, and in both cases, it was scalability.

However, Kaspa, on the other hand, is one of the few blockchains to solve the blockchain trilemma, as it is decentralized, scalable, and secured. It solves the blockchain trilemma issues through its integration of proof of work (PoW) and the blockDAG structure.

Kaspa 2

How Does The Kaspa GhostDAG Protocol Work?

Most blockchains that digitally process transactions do so in the form of blocks, hence the name blockchain. Kaspa, however, deviates from this because it does not store digital transactions in blocks. Instead, it does so using a complex mathematical structure called a DAG (Directed Acyclic Graph). 

In a DAG (Directed Acyclic Graph), vertices are present instead of blocks. So, instead of referring to different units as forming blocks, each different vertice forms edges when connected to each other. The blockchain then relies on present transactions to validate and confirm transactions that come after it. 

Kaspa does not discard previous blocks of information; therefore, it is more secure and scalable. Its mining relies on kHeavyHash, which is a form of optical mining algorithm that is energy efficient and works well with mining equipment such as FPGAs and GPUs.

Prominent Features Of Kaspa (KAS)

Efficient Proof of Wook: Kaspa is a one-of-a-kind blockchain that has managed to maintain its Proof of Work mechanism while also solving the blockchain trilemma. To put this in perspective, blockchains such as Ethereum have had to move from Proof of Work (PoW) to Proof of Stake (PoS) in an effort to solve their scalability issues and make them faster. 

However, since Kaspa already solved the blockchain trilemma, this makes it highly scalable while maintaining a truly decentralized system. Its utilization of the optical-mining-ready kHeavyHash algorithm also helps to ensure the consensus and security of the network.

Instant Transaction Confirmation: Kaspa was designed to be cheaper and faster than Bitcoin, where full confirmation of a transaction takes an average of 10 seconds, with each transaction visible to the network in one second. This is significant when compared to Bitcoin, which takes an average of 10 minutes to confirm a transaction.

Security: When it comes to security, Kaspa did not just employ the same security principles and methodology as Bitcoin, it took it a step further as it replaced the SHA-256 PoW encryption with kHeavyHash, while inheriting all the security properties of SHA-256. Thus, its network is still secured by a robust network of decentralized volunteers (miners) who validate and sign transactions just like Bitcoin.

Cheaper Fees: Not only does the Kaspa Blockchain network confirm transactions fast, but it is also significantly cheaper than Bitcoin. This is because the blockDAG network generates multiple blocks every second for posting transactions to the ledger, whereas Bitcoin generates one block every 10 minutes. Transaction fees on Kaspa cost less than a cent, while transaction fees on Bitcoin cost an average of $4 at the time of this publication.

Scalability: Kaspa solves scalability issues with its blockDAG network’s ability to generate and confirm multiple blocks per second, as mentioned above. But perhaps the most interesting part of what Kaspa does is that it is able to confirm so many blocks (vertices) per second without altering or giving up its decentralized nature.

What Is KAS Coin And What Are Its Uses?

KAS coin is the native token of the Kaspa blockchain, whose main objective is to power the whole network. It is used to pay for transaction fees and other forms of developer’s fees, and it is also used as an incentive to reward miners. Its block rates are rapid and promise swift rewards, as well as offering profitable mining with lower hash rate requirements compared to Bitcoin.

The Tokenomics of Kaspa (KAS)

Kaspa’s native cryptocurrency, KAS, has a maximum or total supply of 28.7 billion coins that are not pre-mined. This means all of the tokens in circulation have been free-mined by miners on the blockchain. It has a circulating supply of 22.5 billion at the time of publication, and estimates are that with the current halving model, the last KAS coin will be mined in 2037. 

The Kaspa network utilizes an open crowdfunding and voting governance model, which means that KAS holders can contribute to the network for development, marketing initiatives, education, etc. 

This sense of shared responsibility and ownership motivates the community to come together and work toward collective goals. 

KAS Price History And Progress

Kaspa launched its mainnet along with its token two years ago, on November 7, 2021. Initially, the price of its native token, KAS, remained stagnant until July 2022, when it pumped from $0.0001840 to $0.0005890. It then traded sideways for months before going on another rally, triggering a 694% increase in price.

Following this, the KAS price rose to almost $0.01 per coin in just a year after its launch in November 2022. The price dipped a bit and started off trading 2023 with $0.005278 per coin. KAS would then go on to hit a new all-time high of $0.154 in November 2023, exactly two years from the month it launched.

Kaspa (KAS) is up 61,331% since its all-time low of $0.00017105 on May 26, 2022, according to Coingecko. This is significant because the surge to its new all-time highs took place during a bitter bear market, causing the coin to outperform the rest of the crypto market.

This immense growth in such a short time has led to some of Kaspa’s investors referring to it as ‘Bitcoin 2.0’ or ‘The next Bitcoin.’ Its similarities with Bitcoin have also fueled the belief that it is the next Bitcoin. With a market cap of $2.38 billion, Kaspa is currently the 38th-largest cryptocurrency in the space and the 7th-largest Proof of Work (PoW) blockchain.

Conclusion

Kaspa (KAS) solving the blockchain trilemma with the ability to be scalable and still be decentralized gives it an edge over blockchains such as Bitcoin. Its native KAS coin also has important use cases like powering the entire Kaspa blockchain protocol and being used for transaction fees. This ensures that the coin is always in demand as the Kaspa network usage grows.

Additionally, features like fast transactions, top-notch security due to its encryption with kHeavyHash, and a robust network of decentralized volunteers (miners) who validate and sign transactions make it an appealing choice for investors looking for an alternative to Bitcoin while enjoying the security and decentralization of Bitcoin.

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3 Bitcoin-Like Proof Of Work Altcoins That Could Make You A Millionaire In 2024

Bitcoin is still the leading proof of work blockchain and has already made massive moves over the years, with countless millionaires at the same time. However, with the price of Bitcoin having moved so much already, the upside is fairly limited, especially for crypto investors who do not have ample buying power to make a Bitcoin investment worth their while.

In this vein, altcoins offer the best opportunity for smaller and retail investors to make the most money. But not just any altcoins; these coins also employ the proof of work mechanism, just like Bitcoin, making them a good choice, especially when they are newly launched.

QUBIC: A Proof Of Work Coin Like Bitcoin

The Qubic (QUBIC) coin is already making the rounds on social media platforms such as X (formerly Twitter) and with good reason. The blockchain uses a proof of work mechanism like Bitcoin. Led by IOTA co-founder Dominik Schiener, it has already garnered a reasonable following based on Schiener’s reputation.

The coin is still trading well below $0.1 which could make it a good buy in the long run. With a current circulating supply of 71.425 trillion, its current market cap is currently sitting at around $200 million. 16% of the total supply has reportedly been burned already.

Nexa (NEXA) Leads POW Altcoins

Next (NEXA) is another proof of work blockchain, but unlike Bitcoin, it uses the UTXO Layer. This means that Nexa is a proof of work blockchain that is also able to support native tokens and smart contracts. To mitigate the problem of scalability often encountered by the likes of Bitcoin and Ethereum, Nexa employs Signatures and UTXO lookups.

NEXA price chart from Tradingview.com (Bitcoin altcoins proof of work)

The Nexa token is currently trending below one cent with an around $35 million market cap at the time of writing. Given the kind of run that Kaspa (KAS) had even through a bear market, it puts in perspective the opportunity that lies with this token.

Firo (FIRO)

Firo (FIRO) is another proof of work coin that also holds a lot of promise among the altcoins that fall into this category. It rebranded from ZCoin and is a privacy-first coin, meaning it mixes two of the most sought-after attributes right now in the crypto market.

Its price is $1.87 with a fully diluted market cap of under $40 million. This makes it the coin on this list with the lowest fully diluted market cap. Its price has been relatively stable for the last week, which could suggest that accumulation is happening ahead of a possible breakout.

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ETH Backpedals After Hitting $1,800 Ahead Of Merge Last Week

As the integration has progressed, Ethereum’s price has slid precipitously. Since the general financial markets are facing a period of extreme pessimism, ETH could continue to fall over the next few days.

On the morning of September 15th, the Merge went into effect. The price of ETH dropped 11.91 percent during the day, wiping off all of the gains it has made since September 14.

The outlook for ETH after the integration is bleak because it suggests the crypto winter will continue through the summer months.

In the time after this article was written, the coin’s price has found support near the 61.80 Fib level, at around $1,329.91. A portion of the Donchian channel’s lower section has also been explored by the bears. This shift indicates a deeper descending pressure.

ETH Rebound Still A Big Possibility

ETH’s recovery is feasible, but only in the far future, as the Merge raised more concerns than it answered, and the broader financial markets are still battling to reestablish confidence.

A positive outlook for Ethereum’s future is something this occasion is meant to instill in traders and investors. Traders and investors, however, believe that the proof-of-stake system is a wrong turn for ETH.

According to a post in r/CryptoCurrency on Reddit, the proof-of-stake mechanism benefits the wealthy at the expense of the poor. Investors and dealers are under increased pressure to sell because of the combination of current market circumstances and skepticism surrounding the upgrade.

Momentum and stochastic RSI indicators reveal this information. The present convergence of the Stoch RSI is bearish, indicating that investor sentiment is at an all-time low.

Ethereum Bulls Feeling The Pain

Additionally, ETH’s momentum is a staggering -410.90. The bulls are experiencing anxiety in the broader financial markets and the Merge.

Ethereum also closely follows Bitcoin. As of the time of writing, the correlation coefficient is 0.69, indicating that the price fluctuations of the two closely track one another.

With the crypto market on a downward trend, it is easy to assert that ETH’s investors and traders are in it for the long haul.

Gary Gensler, chairman of the Securities and Exchange Commission, stated that staking might classify Ethereum as a security, exposing ETH to legal difficulties.

Ethereum is not, however, the only cryptocurrency that uses proof-of-stake. ADA, SOL, and DOT are based on the proof-of-stake protocol.

If Ethereum is categorized as a security, the other currencies could be subject to regulatory investigation, leading to additional price declines for Ethereum and other proof-of-stake currencies.

In the short run, $1,329.91 has proven to be a price level that can survive a bearish assault. Only time will tell whether Ethereum will rebound from this decline.

ETH total market cap at $164.5 billion on the daily chart | Source: TradingView.com

Featured image from Coinpedia, Chart: TradingView.com

(The analysis represents the author’s personal views and should not be construed as investment advice).

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Bear Market Who? Data Shows High Conviction In BTC And ETH

This is the weirdest bear market to date. It seems like most people were prepared for it, even though the death spirals and Chapter 11 bankruptcies that started it came out of nowhere. In any case, every coin is in the red. The market should be in a state of fear, uncertainty, and doubt. That is certainly not the case for the two leading cryptocurrencies. The circumstances might be different for each one, but both markets show signs of unwavering conviction. 

Long-time holders of bitcoin and ethereum seem to be laughing in the bear market ’s face. In the latest edition of The Wolf Den, the author uses Glassnode and Intotheblock’s data to show us how this is true. 

The Bear Market Vs. Bitcoin

“On-chain evidence from Glassnode suggests that there has been no meaningful reduction in the conviction of long term believers,” the newsletter states. To prove this, The Wolf Den looks at the “Dormancy Metric.” The number that “tracks the average age of every Bitcoin that moves, determined by when it was mined. One of the ways to gauge the sentiment of long-term holders is to asses the average age of coins moving around the market.”

As attentive readers might suspect, the coins that are “moving around the market” are extremely young. In fact, their age “is at multi-year lows. The dormancy value is very low.” This is consistent with previous bear markets, in which dormancy values tend to be low. The newsletter quotes analysis from Glassnode:

“The decline in lifespan metrics actually bodes well for the longer-term, as it indicates old coins are stationary, and declining prices have little psychological impact on this cohort’s conviction.”

So, if we focus on the big picture, everything looks like it’s supposed to. A healthy habit during bear markets.

BTC price chart for 09/02/2022 on Cexio | Source: BTC/USD on TradingView.com
The Ethereum Merge Is Upon Us

For this section, The Wolf Den used data from IntoTheBlock. Before getting into it, the author clarified the sequence of events that compose the mythical “merge”. First of all, on September 6th, “the Bellatrix upgrade happens on the Beacon chain”. Then, between September 10th and 20th, “the official transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) will occur”. The Ethereum Foundation estimates that the merge will happen on September 15th. 

To evaluate the Ethereum network’s state during this bear market, The Wolf Den looked into “netflows onto centralized exchanges”. Overall, more ETH is leaving the exchanges than entering, which is bullish. It tends to mean people are not looking to sell their assets. However, with the merge looming and the bear market among us, it could have other meanings. 

On the one hand, people might be “bullish on the merge as users believe that the merge will happen successfully and are loading up on ETH for potential price action.” On the other, they might be anticipating the possible ETH Proof-Of-Work hard fork. If that happens, “all ETH being held in wallets can claim ETHW at a 1:1 ratio, traders might be preparing themselves to claim the most ETHW possible.”

Another curiosity about the bear market’s current state is this. Lately “the average inflow transaction size is generally larger than its outflow counterpart”. According to The Wolf Den, that’s not a problem because “netflows onto centralized exchanges” are low. And that’s a stronger indicator. However, those large inflow transactions might suggest something that makes sense. “Larger traders and institutional investors are more skeptical about the success of the merge”.

In any case, long-time bitcoin and ethereum holders show unwavering conviction despite the bear market’s conditions. For different reasons altogether.

Featured Image by congerdesign from Pixabay | Charts by TradingView