A revolutionary advancement in technology based on several years of academic and theoretical research, Kaspa is an innovative cryptocurrency layer 1 solution set to break boundaries with fintech as we know it. This article will shed more light on the inner workings of the world’s first BlockDAG and one of the fastest and most secure cryptocurrency solutions today.

What is Kaspa?

Kaspa, popularly known as the first “BlockDAG,” is a layer 1 blockchain solution that is decentralized, open-source, and scalable. It is a community project developed to solve the trilemma in the usage of digital assets: security, scalability, and decentralization. Kaspa is a proof-of-work cryptocurrency running on the GhostDAG protocol. It was founded in 2016 by Yonatan Sompolinsky, who is also one of the authors of the GhostDAG protocol which serves as Kaspa’s underlying consensus mechanism. Kaspa was also fair-launched, i.e. it was launched without any pre-mining or allocation of coins.

According to founder Yonatan Sompolinsky, the vision behind the project was to build a system that surpasses the limits of Nakamoto Satoshi’s v1 protocol (or the Nakamoto Consensus) but still abides by the same principles embedded in Bitcoin. Kaspa was officially launched in 2021 and immediately garnered the attention of the entire cryptocurrency industry.

Kaspa is propagated by a robust proof-of-work engine featuring rapid single-second block intervals. It is a protocol that boasts of being built by industry pioneers and led by the people.

Kaspa’s Main Features: Mobile wallet, Peripheral nodes and KDX

Kaspa’s setup and the protocol it was built on enable it to allow the fastest, most scalable, and most secure transactions without any sacrifice to decentralization. Kaspa also features various wallets, including:

Kaspa web/mobile wallet: It boasts the most user-friendly and secure wallet in the cryptocurrency market currently. It has a simple and easy-to-use interface that makes it easy for users to make transactions.

Desktop Wallet- KDX: This is a process manager that provides no-effort installation and configuration of the Kaspa full-node software and the Kaspa wallet while running on a desktop operating system. Also, Kaspa features the Kaspa Command Line Wallet, which is part of the core Kaspa node software bundle and maintained by the core team.

Other key features of Kaspa include:

Peripheral nodes: Peripheral nodes’ main function is to manage any frontrunning and MEV threats. This protects average users from miners and trading bots trying to manipulate transactions and gain an unfair advantage. Sub-second block times also boost pre-trade privacy and stealth transactions, further protecting users from manipulation.

Security

kHeavyHash inherits all the security properties of SHA-256, but it is inherently a modification of the SHA-256 algorithm and includes a weighting function. Thus, the blockDAG is secured by a large network of decentralized volunteers and miners who validate and sign transactions. Kaspa allows anyone to participate and help secure the network.

How Does Kaspa/GhostDAG protocol Work?

A blockDAG is an acyclic graph, that is, it’s a mathematical structure where the vertices represent blocks, while edges refer to child/parent blocks. This innovative implementation of distributed ledgers is the first ever, allowing next-generation scalability, high throughput transactional bandwidth, and instantaneous confirmations, all while remaining decentralized.

GhostDAG on the other hand, is the consensus mechanism that Kaspa currently utilizes and it improves upon the phantom consensus. It uses what is known as a “greedy algorithm” to sort data, and then put each datum in its allocated location. Greedy algorithms focus on accomplishing tasks in the best way possible at any moment, as opposed to following a structured processing method.

When dealing with clusters, GhostDAG classifies data blocks as either blue (blocks on the chain) or red (not on the chain). GhostDAG does not try to find the biggest cluster. Instead, the greedy algorithm finds the blue set with the best tip and adds in the data from outside the set. This combination of Blues and Reds then forms a chain with the block from the chosen tip at the last.

Unlike more traditional blockchains, GhostDAG doesn’t orphan blocks created in parallel, but instead allows them to coexist and orders them in consensus. Kaspa processes all blocks in parallel linking all side chains. Consequently, this leads to a DAG structure that increases the formation of blocks per second drastically, creating a blockDAG.

You can see how it works in real time by checking the blockDAG visualizer.

Consequently, Kaspa does not share the linear structure of traditional blockchains, but it allows parallel block execution and stores its blocks in a DAG (direct acyclic graph). Any conflicts between blocks are resolved by “provably secure ordering rules,” where essentially each block references various predecessors, thus solving the high orphan problem (wasted computational resources due to the rejection of valid blocks by the network).

The key inspiration behind a proof-of-work-based DAG is to replace conventional mining processes in the Nakamoto Consensus, where miners “propagate and extend the winning chain only,” with Kaspa’s model where “every new block points at all recent blocks in the history, instead of the winning block.”

Pruning

Pruning is a method Kaspa uses to reduce the size of the blockDAG. This reduction in size prevents nodes from having to keep track of vast amounts of blockDAG data. The pruning mechanism ensures that Kaspa nodes only need up to 3 days of prior history to be stored by each decentralized machine. As a result, many other nodes can then be created for the network with no large storage requirements.

The pruning mechanism used is unique to Kaspa’s BlockDAG and GhostDAG consensus method, whose design approach uses the apparatus of finality and invalidation rules. The goal of this mechanism was to design a pruning algorithm resistant to pruning attacks by a 49% attacker.

Kaspa Mining

Kaspa is the fastest mineable proof-of-work coin in existence, and it is still decentralized. The blockDAG framework with its rapid block rates allows for more mining decentralization and it also enables effective solo mining at lower hashrates. Today, the total supply of Kaspa is 28.7 billion coins with an emission schedule that halves once a year through smooth monthly reductions by a factor of (1/2)^(1/12).

Mining Kaspa is based on kHeavyHash, which is a modified form of the “optical miner” HeavyHash algorithm. kHeavyHash uses matrix multiplication framed into keccas. The kHeavyHash is an energy-efficient, and core-dominant algorithm, and can be successfully mined by GPUs, FGPAs, and other specialized mining equipment.

What Makes Kaspa Unique?

Kaspa offers several advantages to its users. The most prominent of these are the GhostDAG protocol and its PoW mechanism. GhostDAG allows blocks created in parallel to coexist and orders them in consensus, and offers complete transparency to every user by showing how it works with their real-time blockDAG visualizer.

As a result, Kaspa is able to circumvent the ‘traditional security-scalability-decentralization trilemma’ of blockchains by increasing their block rates, while maintaining the security guarantees of Bitcoin.

Using the blockDAG protocol also promotes exponentially faster transactions. The adoption of cryptocurrency for daily transactions has been hampered to an extent by the need for more speed in popular crypto networks like Bitcoin and Ethereum. This lack of speed is chiefly due to the poor design of linear blockchains, which do not have the capability to process transactions quickly enough. Kaspa mitigates this issue by creating multiple blocks every second. This enables transactions to get entered into the network and be ready for confirmation instantly. Kaspa publishes each transaction on the blockDAG in one second and gets full validator confirmation in 10 seconds on average, and the times are expected to decrease even further later on.

Efficient Proof-of-Work

Kaspa is a “pure” proof-of-work and decentralized digital asset. Many cryptocurrency projects are trying to move away from decentralization, and on the other hand, Kaspa is persevering in solving these scalability and speed issues in a truly decentralized system. To keep decentralization intact while handling any environmental negatives associated with mining, Kaspa chose to use the kHeavyHash algorithm. This is a ‘core heavy’ and efficient algorithm that allows very high hashing power per watt(compared to other PoW algorithms like ETHash, SHA-256, and KawPow). kHeavyHash can also work with future optical mining systems which may end up using even less energy.

What is KAS?

KAS is the native cryptocurrency of the Kaspa project. Since Kaspa is a Layer-1 project, KAS is referred to as a ‘coin’ rather than as a token. However, like all other tokens, KAS is used to power the ecosystem and incentivize contributors (such as marketers, designers, and developers) to keep the data integrity of the platform in check.

KAS Tokenomics

Kaspa currently has a circulating supply of 18.43 billion KAS, with a total market cap of $373.8 million. The max supply of Kaspa stands at 28.7 billion coins, and it has an emission schedule that halves once annually through smooth monthly reductions.

Kaspa Dapps

Kaspa features three main DApps, which are essential to its ecosystem. These include chainge, zelcore, and tangem.

Chainge

Chainge is the leading cross-chain authority in the DeFi space. It features 13 integrated chains so far, and it supports over 75 assets which allow users to maximize their wealth’s potential and enjoy a secure and flexible financial life.

Zelcore

Zelcore is the world’s first web3 gateway. It is the easiest way for users to navigate all exchanges and blockchain protocols. Zelcore supports up to 60 protocols, and more than 450 coins and tokens, including Kaspa. Zelcore is built on a multi-asset/protocol platform that gives users access and visibility to the entire blockchain universe from one place.

Tangem

The tangem wallet allows users to store their crypto assets in a secure and easily accessible place while keeping private keys contained in the user’s card. It is a self-custodial cold wallet that allows users to store, buy, earn, transfer, and swap over 6000 coins and tokens. The wallet looks exactly like a bank card and can easily fit into a cardholder or physical wallet, and all that’s needed to manage the assets is an NFC-enabled phone.

Is KAS a Good Investment?

Kaspa is an innovative layer 1 solution, boasting the fastest and most scalable instant validation transaction layer through leveraging a PoW consensus mechanism. It seeks to solve the blockchain trilemma, and so far, results state that it has surpassed its expectations. With its unique features, dedicated team of developers, and a large community of supporters, Kaspa has the potential to become one of the major players in the cryptocurrency market. The price of its native token, KAS, has gone through several drastic shifts since it was launched. However, since its inception in 2021 until now, the amount of downturns experienced has been minimal. Investors are advised to consider all risks involved with trading cryptocurrency. The crypto market is highly volatile, so despite the relative stability of KAS’s price, there might still be a considerable correction depending on the market.

How to Buy KAS

KAS is available on several decentralized and centralized exchange platforms, with Gate.io amongst them. To buy Kaspa on Gate, you need to create an account first and then complete the KYC verification.

Take Action on KAS

See the current KAS price here and begin trading your favorite currency pairs.

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