Kaspa stands as the fastest and most scalable layer ever designed for immediate transaction confirmation using a proof-of-work (PoW) engine. Sent transactions can be instantaneously incorporated into the ledger, which boasts a revolutionary blockDAG structure. Built on the GhostDAG/PHANTOM protocol, Kaspa expands the Nakamoto consensus (the underlying principle of Bitcoin) into a scalable, general framework. This allows for an unprecedented speed and scalability in the PoW sphere, setting a new benchmark for cryptocurrency technology.
Its design remains true to the principles that Satoshi embedded within Bitcoin—mining based on proof-of-work, an isolated state created by UTXO, deflationary monetary policy, with no pre-mining and no central control. Kaspa is unique in its ability to support high-frequency blocks without compromising the security level provided by the safest proof-of-work environments. The current main Kaspa network operates with one block per second. Following the ongoing rewrite in the Rust language, the main goal of the developers is to significantly increase the number of blocks per second, making it attractive for the development of smart contracts and DeFi (decentralized finance).
RESOLVING THE TRILEMMA
Traditional cryptocurrencies suffer a trade-off between security, scalability, and decentralization: decentralized cryptocurrencies must limit block creation speed to reduce the number of “orphans,” which are blocks created off-chain during the time it takes for a block to propagate through the network. A high number of orphans reduces the efficiency of the PoW (Proof of Work) network and thus weakens its defense against attacks by malicious participants. To resolve this compromise, Kaspa’s consensus layer uses the GhostDAG protocol, a consensus protocol based on work (Proof of Work) that generalizes the Nakamoto chain into a directed acyclic graph of blocks (blockDAG). GhostDAG incorporates “orphan” blocks into the chain by creating a blockDAG, then uses a new greedy algorithm to arrange the blocks in such a way that it prioritizes well-connected, honest blocks, quickly and with high probability. GhostDAG allows Kaspa to bypass traditional blockchain compromises, increasing block creation speed by several orders of magnitude while maintaining theoretical security at the Bitcoin level.
The result is a cryptocurrency that is supported by 51% security, has a large number of miners/nodes, and achieves throughput of roughly one block per second. This differs from existing cryptocurrencies, which inevitably sacrifice a small number of validation nodes or lower BFT security (the 33% threshold needed for network attacks by malicious participants).
The slow block creation speed of traditional cryptocurrencies means slow confirmations, i.e., the time it takes for a transaction to be published in the blockchain. Kaspa’s consensus layer supports fast confirmations on the order of seconds—rapid first confirmation, which allows for use in cases where immediate proof of publication (but not immediate irreversibility) is needed, such as e-commerce.
The slow block creation speed of traditional cryptocurrencies also means low transaction throughput. By using GhostDAG, Kaspa’s consensus layer removes security as a bottleneck for high throughput, allowing for an increase in speed and size of blocks up to the level that the network can handle. Kaspa also optimizes data transfer costs and network infrastructure for high throughput.
The slow block creation speed in traditional cryptocurrencies also means high variability in mining income (i.e., irregular mining rewards due to the difficulty of finding a block), which motivates miners to join larger and larger mining pools—combining computing power and distributing smaller, more regular rewards to participants—as the network grows and block difficulty increases. This centralizes consensus power in the hands of a few mining pool managers. The fast block creation speed in Kaspa’s consensus layer reduces the variability of mining income, which decreases the motivation to join mining pools, and contributes to the decentralization of mining.