What Is It, Its Use Cases, Working and Technology

Kaspa is a layer for instantaneous validation transaction sequencing that allows miners to include transaction requests into the blockchain quickly, supporting non-contemporary state updates. 

It utilizes the PHANTOM protocol, which is a scalable simplification of the Bitcoin consensus, including transaction rules, states, and Bitcoin values. Additionally, Kaspa leverages Bitcoin’s Proof-of-Work (PoW), UTXO-based isolated state, deflationary financial policy, and has no pre-mining and central governance. 

Kaspa stands out from other crypto projects due to its ability to enable high block rates while maintaining the same level of security as other PoW environments. Currently, the protocol can support one block per second, but its developers intend to increase the capacity to ten or even one hundred blocks per second. 

What is Kaspa?

Kaspa is described as the fastest and most scalable Level 1, instant validation transaction layer that utilizes a PoW consensus mechanism based on the GHOSTDAG/PHANTOM protocol.

It is theoretically as secure as Bitcoin since it draws no additional assumptions and allows parallel blocks to coexist while arranging them in consensus. Kaspa is the Bitcoin consensus in its simplest form, and to achieve full decentralization, it is community-based and open-sourced. 

One of the major issues with the Bitcoin consensus that Kaspa aims to address is that a network attacker only needs to issue slightly fewer blocks than the authentic work due to the frequency of isolated blocks in regressing transactions. Thus, a 51% attack requires less than 51% of computation power. 

Although this may seem like a small issue, there is a significant difference between a 50.1% and a 49.9% attacker. The problem becomes more severe when developers increase the network throughput by improving the block rate or size, leading to an increase in the isolation rate and undermining network security. 

History of Kaspa

Yonatan Sompolinsky and Aviv Zohar conceived and implemented the Kaspa idea in 2016. They did it through the GHOSTDAG protocol to solve the scalability problem of PoW blockchains. Kaspa ensures safety with faster settlement speed, flexible block time, and reward, like other PoW solutions. 

Features of Kaspa

Kaspa achieves instant transaction confirmation, which enhances user and developer experience. Therefore it reduces transaction costs by reducing its consensus mechanism latency. Peripheral nodes prevent front-running and miner extractable value (MEV) threats, ensuring users are protected from miners and trading bots manipulating network activities to exploit them. 

Kaspa’s instant block times facilitate pre-trade privacy and anonymous transactions, protecting users from such exploitations. 

The security of most networks depends on the interval between blocks being more significant than the time the entire chain takes to learn about a new block. Parallel blocks are isolated, limiting the growth rate of the authentic network. 

The Kaspa GHOSTDAG protocol solves this security tradeoff by leveraging a directed acyclic graph (DAG) where a block points to several blocks instead of one. The DAG is arranged in a crisscrossed chain, and transactions that align with previous transactions are integrated. 

This design mitigates double-spending and is the foundation of GHOSTDAG. The Kaspa foundation layer aims to develop a scalable INSTANT event sequencing layer, and Layer 2 (L2) developments will be responsible for the network’s wide-ranging and open form.

Summary

Kaspa aims to create a mutual, scalable sequencing layer, faster settlement times, and private pre-trade activities that guard against front-running and MEV threats. The security of networks depends on block intervals being longer than the time for the chain to learn about a new block. Parallel blocks limit network growth.

Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.