KASPA

ABOUT KASPA

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. Kaspa is based on the GhostDAG/PHANTOM protocol, a scalable generalization of the Nakamoto Consensus (Bitcoin consensus). Its design is faithful to the principles Satoshi embedded into Bitcoin — proof-of-work mining, UTXO-formed isolated state, 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. 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.

SOLVING THE TRILEMMA

Traditional cryptocurrencies suffer from a security-scalability-decentralization tradeoff: decentralized cryptocurrencies must limit their block creation rate in order to limit “orphans”, off-chain blocks created during the time it takes for a latent block to be propagated across the network. A high orphan rate decreases the effectiveness of the PoW network, thus decreasing its defense against attacks from malicious actors joining the open network. To solve this tradeoff, Kaspa’s consensus layer uses GhostDAG, a proof-of-work consensus protocol that generalizes Nakamoto’s chain into a directed acyclic graph of blocks ( blockDAG). GhostDAG incorporates”orphan” blocks into the chain to form a blockDAG, and then uses a novel greedy algorithm to order the blocks such that well-connected, honest blocks are favored, quickly and with high probability. GhostDAG allows Kaspa to circumvent the traditional tradeoff of blockchains, improving on block rate by orders of magnitude while maintaining the theoretical security guarantees of Bitcoin.
This results in a cryptocurrency that is supported by 51% security, has a high number of miners / nodes, and has throughput on the order of one block per second. This is unlike existing cryptocurrencies, which inevitably trade off on having small numbers of validator nodes or lower BFT security (33% threshold needed for malicious actors to attack the network).
Fast Confirmations
Traditional cryptocurrencies’ slow block rates indicate slow confirmations, i.e., the time it takes for a transaction to be published on the blockchain. Kaspa’s consensus layer supports fast, subsecond confirmations— a fast first confirmation, which enables use cases that need immediate proof of publication (but not immediate irreversibility), such as e-commerce.
High Throughput
Traditional cryptocurrencies’ slow block rate also indicates low transaction throughput. Using GhostDAG, Kaspa’s consensus layer removes security as a bottleneck for high throughput, allowing block rate and block size increase up to what the network can handle. Kaspa also optimizes bandwidth cost and network infrastructure for high throughput.
Mining Decentralization
Traditional cryptocurrencies’ slow block rate also indicates high variance of mining income (i.e. irregular mining rewards due to the difficulty of finding a block), incentivizing miners to join larger and larger mining pools—which combine computing power and distribute smaller, more regular mining incomes to participants—as the network grows and the block difficulty increases. This centralizes the consensus power into the hands of a few pool managers. Kaspa’s consensus layer’s fast block rate decreases the variance of mining income – which decreases the incentive to join mining pools – contributing to mining decentralization.

KASPA VISION

The vision behind this project is to build a Nakamoto-like service that operates as fast as internet speed allows. We wanted to build a system that surpasses the limits of Satoshi’s v1 protocol (aka Nakamoto Consensus) yet adheres to the same principles embedded in Bitcoin. Contrary to Satoshi’s vision, Bitcoin did not become a peer-to-peer electronic cash system. Instead, it is solidifying as the ultimate store of value, or e-gold, and that’s pretty much it from the Bitcoin side. This is not a mild achievement by any measure-it’s one of the most important financial revolutions in human history. Yet it leaves lots of room for improvement (of L1) and/or for choosing different tradeoffs (for L1).
For a thorough inspection of Satoshi’s vision, we highly recommend Examining a Conspiracy Theory about Satoshi’s Intent by Elliot Old.
For Kaspa, we look to silver, which presented a different tradeoff vs. gold. In the original Aramaic text (Dahavavs. Kaspa), silver was historically treated as less precious than gold but more circulative, less valuable yet more acceptable as payment. With this prospect we call this project Kaspa, (Aramaic word for “silver” and “money”).
The consensus stack of Kaspa is designed to address what we believe to be leading challenges for the second decade of crypto. As the technology matures and its adoption and integration with other web applications gain momentum, we identify two primary vectors which require a deep revisit of the base consensus: the speed of transaction-inclusion in the ledger, and the control over transaction-ordering in the ledger.
We postulate that instant time-to-inclusion (a.k.a. first confirmation) in the ledger is of primary importance to user- and developer-experience, and to integration with other web applications, as well as fast (probabilistic) finality. Kaspa optimizes for minimizing the latency imposed by the consensus engine on transaction flow and user experience. Additionally, we contend that the ability of peripheral nodes that control a small fraction of the hashrate to mine blocks very frequently, in an asynchronous fashion, is key to mitigating serious frontrunning and MEV threats referring to the ability of miners, and of trading bots, to manipulate transaction ordering and gain an unfair and occasionally undetected advantage over ordinary users. Sub-second block times enable pre-trade privacy, and pre-trade stealth transactions, to protect the users from such manipulations.
Providing instant confirmation is not a trivial task, less of course one is willing to compromise on the principles of decentralization, or to operate under strong assumptions on the network’s topology and with minimal safety margins. Kaspa took the hard path of designing the system based off Satoshi’s paradigm and first principles. There has yet to be, in the blooming field of cryptocurrencies, a serious attempt at following Satoshi’s v1 protocol, and proving and providing new capabilities based yet on the same fundamentals. While Bitcoin is becoming the Internet’s ultimate reserve asset, we believe there is still demand—and an urgent one, at that—for an implementation of Satoshi’s original vision: a peer-to-peer electronic cash system.
Since transaction ordering is the main challenge of any consensus protocol, Kaspa’s base layer focuses on becoming a fast and scalable transaction sequencing (a.k.a. proof-of-publication) engine. The base consensus will therefore maintain the state of payments only (a.k.a the UTXO set), whereas computing the more general and expressive state will be outsourced to Layer Two operations. This should be done by adopting the thought process and innovation led by several Ethereum researchers and developers who are building rollups. The rollups technology reduces the cost of running base consensus nodes by decoupling computation from data availability.
In fact, a rollups-centric Ethereum will fragment the network, hinder composability, and dramatically change the underlying assumptions and dynamics. Smooth operation between the siloed rollups will require special liquidity providers that serve the purpose of bridging the gap—specifically, providing instant confirmation to circumvent the prohibitive finality periods required for securing optimistic rollups. Providing these rollups with a shared scalable transaction sequencing layer, allowing shorter finality times, enabling stealth pre-trade transactions which protect against censoring miners, and bootstrapping an ecosystem of cross-silo communication, is another natural way in which Kaspa network aims to solve a timely pain point for crypto projects and users.

TOKENOMICS

The blockDAG architecture – with rapid block rates – allows more mining decentralization and enables effective solo-mining even at lower hashrates. Fair-launched in November of 2021 with no pre-mine, zero pre-sales, and no coin allocations; Kaspa is 100% decentralized, open-source, and community managed. The max supply of Kaspa is 28.7 Billion coins with an emission schedule that halves once per year via smooth monthly reductions by a factor of (1/2)^(1/12).
First mining was done on CPUs, during the initial month of the mainnet. By December 06, 2021 one of the community members wrote and released the first-ever open-source GPU mining software for Kaspa 

For almost one and a half year, Kaspa was primarily mined using GPUs, and at some point, also using FPGAs (the exact date of their appearance is unknown because public FPGA bitstreams emerged much later than individual community members started talking of their FPGA mining).
On April 13th, 2023, the ASIC era began when a representative of the IceRiver company joined the Discord server and presented their product lineup. 

THE FOUNDER

Yonatan Sompolinsky

DAGLabs was founded by Dr. Yonatan Sompolinsky with the purpose of implementing the GHOSTDAG protocol – invented by Yonatan with his then Ph.D. advisor professor Aviv Zohar.
Yonatan started gaining a reputation within the cryptocurrency academic circle back in 2013 when he and professor Zohar conceived the GHOST protocol, a protocol famous for being cited in the Ethereum whitepaper as a design goal.
Yonatan currently holds a post-doctoral position at Harvard researching transaction ordering protocols and MEV.

CORE DEVELOPERS & RESEARCHERS

Those contributing immensely to the implementation and stabilization of the network, include:

Michael Sutton

 msutton

Core Developer. Distributed Systems Researcher and Developer,

Michael got his M.Sc in computer science from the Hebrew University, where he researched parallel algorithms and distributed systems.

Shai Wyborski

 deshe

Shai is a Kaspa researcher and one of the authors of the GHOSTDAG paper.

Shai is a Ph.D candidate in the Hebrew University and Ben-Gurion University where he researches classical and quantum cryptography.

Mike Zak

  svarog

Core Developer. Cryptocurrency and Distributed Systems Developer

Elichai Turkel

 elichai2

Core Developer. Applied Cryptographer and High-Performance Developer

Ori Newman

 someone235

Core Developer. Cryptocurrency and Distributed Systems Developer

Fastest Transactions

The ability for cryptocurrency to be utilized for everyday transactions has been limited by a lack of speed in the most popular networks, such as Bitcoin and Ethereum. This has prevented their mass adoption. Limitations in speed are due to an inherently poor design of linear blockchains which do not have the capability to process transactions quickly enough. Kaspa solves this problem through a novel approach “blockDAG” which creates multiple blocks every single second. This approach means transactions get entered into the network and ready for confirmation almost instantly.

Instant Confirmation

After transactions have been entered into a specific block on a blockchain, these transactions must be fully validated and confirmed by a network of nodes. Confirmation is required to ensure that each spender and receiver’s ledger has been correctly calculated, that funds are available, and that each transaction is in fact a true one, and not an attack from a possible hacker. Slow confirmation times have plagued cryptocurrencies for years. Kaspa solves this confirmation bottleneck by publishing each transaction on the blockDAG in one second, and getting full validator confirmation in 10 seconds on average. After the rust upgrade, we expect these times to decrease even further. 

Scalable

Having a fast block ledger with instant confirmations is very important for users, but how many people and transactions can the ledger handle at a single time? Could thousands of people transact at the same time with no impact on speed or confirmation? What about hundreds-of-thousands of people? How about millions to billions of people? These questions highlight the scalability problems inherent with most blockchains, meaning that they get clogged or don’t function as designed when a large number of users and transactions occur within a short period of time. Thanks to the blockDAG design of Kaspa, we are better able to handle large amounts of transactions within very short periods of time, with multiple numbers of blocks being created simultaneously and at an average rate of one block every second (wow that’s a lot of blocks!). This allows us to pack in a large number of transactions in very short durations of time. This is singularly unique for a true and purely decentralized proof-of-work network.

Efficient Proof-of-Work

Kaspa is a “pure” proof-of-work, and decentralized digital asset. While many projects are moving away from decentralization in order to scale and operate faster, Kaspa has persevered to solve these scalability and speed issues within a truly decentralized system. Decentralization is the heart of all cryptocurrencies, free from the manipulation of central entities and large stake holders. In order to keep decentralization intact while addressing any possible environmental negatives associated with mining, Kaspa has strategically chosen kHeavyHash. This algorithm is a very efficient ‘core heavy’ algorithm that allows very high hashing power per watt (as compared to most PoW algorithms such as ETHash, SHA-256, KawPow). kHeavyHash is also amenable to future optical mining systems which have the potential to utilize even less energy. In addition to utilizing an efficient algorithm, Kaspa’s BlockDAG does not waste any blocks (thus conserving energy). Each Kaspa block and chain contributes to the network security and none are discarded as opposed to Bitcoin and many other POW blockchains that regularly dispose of significant amounts of computational power when duplicate blocks are encountered.

Security

Kaspa employs the same security principles and methodology as bitcoin besides replacing SHA-256 PoW encryption with kHeavyHash. kHeavyHash, which inherits all the security properties of SHA-256, is a modification of the SHA-256 hashing algorithm which also includes a weighting function. Thus, the blockDAG is secured by a robust network of decentralized volunteers (miners) who validate and sign transactions. Like Bitcoin, Kaspa is also fully decentralized and permissionless. Anyone can participate and anyone can help secure the network.

BlockDAG

 Kaspa is the first blockDAG cryptocurrency (no blockchain). A blockchain is a linear system, where transactions are recorded in blocks, which are ordered by time and sealed. A blockDAG is a directed acyclic graph- a mathematical structure where the vertices represent blocks & edges reference child/parent blocks. This novel implementation of distributed ledgers is the first of its kind – permitting next-generation scalability, high throughput transactional bandwidth, instantaneous confirmations, while remaining decentralized. Please read below for more detailed technical information on blockDAGs.