What is Kaspa?

The Kaspa project, which launched in 2021, immediately attracted the attention of the entire crypto industry. It’s a Layer 1 blockchain that uses the proof-of-work consensus mechanism but, unlike classic PoW blockchains it’s extremely fast, suggesting that its creators have come close to solving the blockchain trilemma. We’ll you what makes Kaspa special and why it’s faster than its rivals.

How fast is it?

Kaspa is currently considered to be the fastest PoW blockchain. A single block containing about 200 transactions is mined an average of once every second, and it takes no more than 10 seconds to confirm transactions.

At the same time, the creators of Kaspa believe that it is not entirely correct to measure the throughput of their blockchain in TPS (transactions per second), instead drawing on an analogy with libraries.

If we imagine that each block is a book that a librarian needs to put on a shelf, and each page of the book is a transaction, then the speed doesn’t depend on how quickly the pages are turned, but on how fast the librarian puts the books on the shelf (which represents the blockchain). The developers plan to increase the throughput to 32 blocks per second (BPS), and in the future hope to achieve an incredible figure of 100 BPS. In order to facilitate this, the project code is currently being migrated to Rust.

How does it work?

To achieve these high speeds using PoW, the creators of Kaspa came up with the idea of storing data on something called a blockDAG, or a directed acyclic graph of blocks. The GHOSTDAG protocol is responsible for reaching consensus, while PoW ensures on-chain security. Let's try to figure out what all of these things are and how they work together.

To get a better understanding of how blocks are stored in Kaspa and how this blockchain is different from the rest, we need to remind ourselves of how new blocks are added to classic PoW blockchains like Bitcoin.

Miners receive a list of transactions from the nodes and begin to solve a cryptographic problem, competing with each other to be the first to create a block using these transactions. After the block is created, it is sent to the nodes for verification and added to the blockchain. What’s important here is the fact that all of the miners are processing the same set of transactions simultaneously, and the blockchain is linear:


Despite this, situations occasionally arise whereby the chain diverges into several branches. Information about the addition of new blocks is distributed to the network with a delay of one second. This could be enough time for a miner who has not yet received the information that a block has been added to mine the same block:


As a result, the blockchain forks and some miners start spending resources on adding blocks to the wrong branch. The network will eventually discard it, defining the longer chain as the only correct one. In the meantime, however, some network participants will try to add blocks to the wrong sequence of blocks, negatively affecting performance.

Kaspa has no direct sequence of blocks. The blockDAG allows miners to work in parallel and, when blocks with conflicting transactions appear, they are added to a directed acyclic graph (DAG) instead of being discarded.

To prevent the same transaction from appearing in the blockchain twice, the block it previously appeared in must be identified. This is where the GHOSTDAG algorithm comes in, bringing chaos to order by assigning indexes to blocks and using special rules:

  1. If block B refers to block A, then it is considered to have been created after block A and cannot be placed before it.
  2. The higher the number of blocks that refer to a new block, the greater its priority in ordering among the blocks created in parallel with it. 
  3. If several blocks have the same number of "ancestors", priority is given to the block with the smaller hash.

Here’s a visual representation:


Block A doesn’t reference any other block and is assigned an index number of 1. Block B references A and receives an index number of 2 (rule one). Block D has a lower hash than block C, so it receives an index number of 3 while C is 4 (rule three). Block E refers to two “parents” which are identified the moment it is created, while block F refers only to D. Using the second rule, we assign E the index number 5, and F receives 6.

We’ve simplified things massively, of course, but we think it should help you to get a better understanding of how GHOSTDAG works. By the way, you can visit the Kaspa Graph Inspector to see what it looks like in real time.


This system means that miners can work in parallel, and the network doesn’t need to expend resources on removing invalid chains.

How much does it cost and what’s it for?

Kaspa’s native cryptocurrency KAS is currently being traded at a value of $0.04, and the project’s market capitalization stands at $706,568,365. Despite the fact that no projects have been launched on the blockchain yet, interest has been growing since the day it was released.

The most important part of the story is the fact that Kaspa is a very fast (and soon to be even faster) Layer 1 PoW blockchain. The approach taken by the developers looks secure (thanks in part to PoW) and the blockchain shouldn’t have any issues with scalability in the future. From the moment the project launched, a number of experts stated that they see Kaspa as the blockchain of the future.

Whether this is true or not, time will tell. For now, Kaspa is a fascinating project with lots of promise. By the way, you can store KAS in your Tangem Wallet!