Kaspa Coin Explained
If you don’t want to read the full article, the video below goes over everything written.
Kaspa Coin History
Kaspa coin launched their main-net back in November of 2021, so it’s still very early on in development and they have lots of new updates coming soon which I’ll cover later on. Kaspa was created by Yonatan Sompolinsky, who is a Harvard student and has done a lot of research into the ghostdag protocol on which Kaspa coin mining is built upon. Kaspa is the fastest and most scalable instant confirmation transaction layer ever built on a proof-of-work engine. Transactions sent to miners can be included immediately in the ledger, which is structured as a revolutionary blockDAG. As mentioned before Kaspa utilises the ghostdag protocol which is a scalable generalisation of the Bitcoin consensus. Its design is faithful to the principles Satoshi embedded into Bitcoin such as proof-of-work mining, deflationary monetary policy, no premine, and no central governance. Kaspa is unique in its ability to support high block rates while maintaining the level of security offered by the most secure proof-of-work environments. Kaspa’s current mainnet operates with one block per second, this gives it a very high throughput rate, whereas with bigger coins like ethereum they only have a block time of 13 seconds. And after the ongoing rust language rewrite, the core developers goal is to increase the number of blocks per second substantially, attracting the development of smart contracts and DeFi.
Kaspa Coin Mining
Kaspa Coin Mining is built on blockDAG architecture which allows for their rapid block rates and that adds to their further decentralisation of mining. When Kaspa was launched, there was no pre-mine, zero pre-sales and no allocations to anyone. The max supply of Kaspa coin is 28.7 billion coins and so far only around 14.8 billion has been mined with a market cap of $100 million. Kaspa doesn’t have a traditional halving, instead it has an emission schedule that halves once per year via smooth monthly reductions. This creates an emission schedule chart that looks like this for Kaspa coin. It shows a very rapid release of coins and we are about here in the schedule. When we look at the whole timeline , we have roughly 95 to 100 months from the launch of this coin until the max supply is reached. Because it was launched in November of last year it means the max supply will be mined in around 7.2 years from now in 2029. This rapid mining schedule is probably one of the main factors also driving Kaspa coins price upwards in this bear market. The supply is decreasing very quickly so therefore the demand is increasing. Now we have seen this kind of emission with coins like ergo, but they decided to extend theirs after 3 years because they wanted to give more time to developers and miners. It could be possible that Kaspa coin decides to do this in the future after a couple of years. The mining algorithm used in Kaspa coin is kHeavyHash and when it comes to mining efficiency, this algorithm is very good for any GPU’s. This has led it to become one of the go to coins to mine in this bear market. For example when mining Ethereum you could lower your power in overclocking to around 80% without losing hashrate, however with Kaspa you can go way lower to around 65% power when overclocking. This means you can in theory save 15% on power and this is why it’s a very profitable coin. Personally I’ve found that the nVidia 3060 Ti and the 3070 have the highest efficiency on this algorithm. If you have some of these cards it would be wise to start mining as they can be very profitable. As I mentioned before this power efficiency is all because of the blockDAG which Kaspa is built upon. So blockDAG means that its not actually a blockchain, instead its a mathematical concept which consists of vertices and edges, with each edge directed from one vertex to another. Whereas with traditional blockchain it would just be blocks in order. This allows for no blocks wasted or orphaned, all blocks are published to the ledger, and no mining power is wasted. Due to this structure, blocks are allowed to be generated more frequently, facilitating more transactions, and resulting in almost instant confirmations. If you want to see how this looks in real time the Kaspa coin website displays a block graph inspector so you can see new blocks being created and connected in real time.
Kaspa’s Rewrite To Rust
One of the biggest things I want to talk about is the re-write of Kaspa coin. So Kaspa coin was originally built on a coding language called golang, however over the past year they have realised that they want to rewrite into a different language. They are doing this In order to reach physical throughput limits and higher block rates, they believe Kaspa needs to be rewritten in a performance-oriented programming language and with a performance-oriented mindset, this language is called rust and is a very popular coding language for cryptocurrencies. Now they have a proven, stable and working real-world and world-scale network, it is time to put the pieces back together in their purest form. Kaspa wants to be a world-leading financial system and they are making these changes to allow for this to happen. Now as said previously the main goals are firstly to bring higher efficiency and performance to the network, this is great for miners as you can be even more efficient when mining. Also rust allows for way lower memory to run a network whereas the golang they are using right now takes up a lot of memory. Their next goal is to have higher BPS and TPS. they believe a goal of 32 BPS is definitely possible, and even 100 BPS is a reasonable target. With their current block-size this would translate to 6400–20000 transactions per second. But block-size can also theoretically be increased to find a sustainable amount of TPS, where the only limiting factor becomes the internet connection itself. The last main goal is to write Kaspa on a language which is widely used in the crypto space, this allows for many newcomers to engage in coding if they have some experience coding in other cryptocurrencies. And it allows for way more developers to join and build on their network which is one of the best things a coin can do as the things built on top really add more value to the network. Also when the block rewards end on the network the miners will get rewarded through the fees from the network and that includes dapps on the network. The Kaspa website also displays a lot of other things in development such as mobile wallets, integration for ledger wallet and node improvements. However one of the only thing that they need to hurry up and release is the revised whitepaper, just so us investors and miners can check out how the coin is put together after the rust re-write. We are also yet to see the scalability at large size yet and if they can prove this with no errors then it would put more faith in the coin.
