More on Kaspa
I used ChatGPT to summarize my conversation with my Cofounder about Kaspa and more findings on the internet to become this article.
1. High Transaction Throughput on PoW UTXO:
Kaspa’s 400 TPS throughput on its Proof-of-Work (PoW) blockchain is particularly noteworthy, as achieving such a level of performance on a UTXO model is rare. Bitcoin, for comparison, handles around 7 TPS, while Ethereum in its PoW form handled about 30 TPS. Kaspa’s approach, however, is poised for even greater scalability with an upgrade planned for early 2025, which will allow 10 blocks per second, potentially scaling the network up to 2,500 TPS.
This level of throughput could challenge popular chains like Solana in terms of transaction speed and throughput, especially when combined with Kaspa’s inherent decentralization and security due to its PoW consensus mechanism. By comparison, Solana’s high throughput is achieved through a hybrid consensus system that has faced occasional stability issues, such as network halts during periods of high activity.
2. Low Market Cap and Ecosystem Growth:
Despite its technical prowess, Kaspa’s ecosystem remains underdeveloped compared to networks like Solana or Ethereum. The market cap of Kaspa is still relatively low, limiting its capacity to attract a large developer and user base. Ecosystem growth is often fueled by early investment gains that create a positive feedback loop of adoption. As noted, the reason Pump.fun succeeded on Solana was that it created a substantial amount of wealth for early participants, driving ecosystem activity.
However, as Kaspa’s infrastructure continues to improve, and as it captures more attention from developers, there’s potential for a positive cycle of adoption similar to what Solana experienced.
3. Bitcoin-Compatible Features on Kaspa:
One of Kaspa’s key advantages lies in its compatibility with Bitcoin scripts due to its use of the UTXO model. This allows Kaspa to support advanced features like Ordinals (digital asset tracking similar to NFTs on Bitcoin), Lightning Network (for fast payments), and Discreet Log Contracts (DLCs for private smart contracts). By leveraging these existing Bitcoin technologies, Kaspa can expand its functionality without the need for complex smart contract ecosystems like Ethereum's.
4. No Need for Layer 2 Solutions:
Kaspa’s architecture allows it to scale on Layer 1 without requiring Layer 2 solutions like rollups or sidechains commonly used by Ethereum. This simplification reduces the need for complex interactions between layers, making the system more efficient for both users and developers. For example, the KRC-20 token transactions occur directly on Layer 1, without needing channels or proofs from other layers.
This contrasts with Ethereum’s reliance on Layer 2 solutions to overcome scalability limitations, where transactions often need to be "rolled up" into Ethereum’s base layer to save costs and improve speed.
5. Integration Potential for Ethereum:
With its higher throughput, Kaspa could also serve as a data availability layer for Ethereum, allowing it to process transactions via rollups. This would enable Kaspa to capture liquidity from Ethereum’s ecosystem, similar to how Base and Blast have integrated with Ethereum to handle large-scale transaction volumes.
6. Transition to Rust for Efficiency:
Kaspa’s decision to shift from Go to Rust has proven to be a critical move for improving the blockchain’s efficiency. Rust is known for its performance advantages, particularly in handling multi-threading and memory management, which are crucial for scaling a blockchain. The Rust codebase also allows for easy cross-platform compatibility, with support for building binaries for iOS, Android, and WebAssembly (WASM). This opens up possibilities for integrating Kaspa into various mobile and web applications.
7. Payments Without Lightning Network (LN):
Due to its fast block times (1 block per second) and low transaction fees, Kaspa can handle micropayments directly on Layer 1, without the need for off-chain scaling solutions like Lightning Network. This makes it suitable for use cases that require rapid settlement without compromising decentralization or relying on third-party channels.
8. Stress Test Success and Network Stability:
The recent KRC-20 token launch acted as a large-scale stress test for the Kaspa network. With over 130,000 transactions in the mempool cleared within minutes, the network maintained full stability and performance, showcasing its readiness to handle high-volume traffic. This indicates that Kaspa’s architecture is robust enough to handle even higher transaction loads in the future.
9. UTXO Scripts vs. Smart Contracts:
Kaspa’s reliance on UTXO scripts instead of complex smart contracts reduces the chances of exploits and bugs that are often seen in Ethereum’s smart contracts. In a UTXO model, scripts are used to define the conditions under which funds can be unlocked, providing security through simplicity. As noted, Bitcoin’s original design philosophy was to keep scripts as minimal as possible to avoid errors, a philosophy that Kaspa embraces.
Conclusion:
Kaspa is positioning itself as a highly scalable, secure, and developer-friendly blockchain. Its compatibility with Bitcoin’s UTXO model allows it to implement advanced features like Ordinals, Lightning Network, and DLCs while maintaining a decentralized, fair-launch PoW architecture. The upcoming 10 BPS upgrade and transition to Rust make it a promising platform for both developers and users seeking a high-performance blockchain.
As Kaspa’s market cap grows, and with its robust technical foundation, it could soon rival major blockchains like Ethereum and Solana, offering unique advantages in terms of scalability, decentralization, and developer ease.
I am actively advocating market education on Bitcoin, cryptocurrencies, and web3, with the hope of empowering more people to seize this chance and benefit from these technologies, ultimately achieving genuine financial freedom. Feel free to share this article with your friends and kindly recommend this column to them.
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