What is Kaspa (KAS) blockchain and how does it work?

Key takeaways 

• ​​Kaspa blockchain uses the GhostDAG protocol to enable faster transactions by allowing multiple blocks to coexist, improving scalability and efficiency.
• Kaspa aims for fair mining with low energy consumption, making it accessible to smaller miners and reducing environmental impact.
• The blockchain offers low transaction fees and fast confirmation times, making it suitable for daily use and business applications.
• Kaspa’s future developments, including a transition to Rust and industrial adoption, position it as a leader in scalable proof-of-work technology.

Kaspa (KAS) is a relatively new proof-of-work (PoW) blockchain designed to offer a fast, scalable and decentralized network for transactions and data processing. 

Founded in 2021 by Yonatan Sompolinsky, Kaspa is built for users who need speed and efficiency without sacrificing security or decentralization — something many older blockchains struggle with. Kaspa in Old Aramaic translates to “money” or “silver.”

At its core, Kaspa is all about making blockchain more accessible and fair. Unlike many existing blockchains that favor those with massive mining power, Kaspa aims for fair mining. This means it tries to level the playing field for everyone, not just the big players. It’s also energy-efficient, using innovative consensus mechanisms to keep power consumption low, which is increasingly important in today’s eco-conscious world.

While many blockchains slow down as they grow bigger, Kaspa stays fast and scalable. It’s designed to handle a high volume of transactions without the usual bottlenecks, making it ideal for those who need a more efficient, decentralized system.

This article dives into the fundamentals of the Kaspa blockchain, breaks down its innovative consensus mechanism, and explores how you can get started with KAS. 

How does Kaspa blockchain work?

Kaspa operates on a unique consensus mechanism called the GhostDAG (Greedy Heaviest Observed Subtree Directed Acyclic Graph) protocol.

In most blockchains, when two miners create blocks at the same time, only one can be accepted, and the other gets discarded. But with GhostDAG, Kaspa doesn’t reject these “orphaned” blocks. 

Instead, the protocol allows multiple blocks to be merged into the blockchain, ordering them in a way that maintains consensus across the network. Such a structure enables faster block generation while still ensuring the network remains secure and decentralized.

The diagram below demonstrates the GhostDAG protocol’s structure in action.

Here’s a breakdown of how it works:

• Genesis block: At the far left, the “Genesis” block is the starting point of the blockchain, similar to how most blockchains begin with a genesis block.
• Multiple blocks coexisting: As time progresses (moving from left to right), multiple blocks, labeled B, C, D and so on, are added simultaneously. In traditional blockchains, only one block can be accepted at each step, while others get orphaned (ignored). However, in Kaspa’s GhostDAG, these blocks coexist and are part of the valid chain.
• Connected blocks: Each block points to multiple previous blocks (shown by the arrows), not just the one directly before it. This system of “parents and children” enables the validation of all these blocks without conflict. GhostDAG orders these blocks in a way that maintains consensus, meaning all valid blocks are included, and the order is agreed upon across the network.
• Block propagation and validation: Over time, new blocks like J, M and K continue to build on previous blocks. They reference not just the most recent block but a web of previous blocks. This is crucial for speeding up block generation and validation, as multiple miners can work on different parts of the chain at the same time.

In short, each block references several previous blocks, which maintains consensus and speeds up block propagation. This system enables Kaspa to process transactions faster, ensures all valid blocks are included, and avoids the typical bottlenecks seen in linear blockchains.

Did you know? Kaspa’s block rewards follow a smooth emission curve rather than abrupt halving, ensuring a gradual reduction over time, which helps stabilize miner incentives and network security.

Advantages of using Kaspa blockchain

Kaspa offers a number of key advantages to its community.

1. Solves the scalability trilemma

One of Kaspa’s biggest strengths is its ability to scale effectively. Thanks to its GhostDAG protocol, Kaspa can handle a large number of transactions simultaneously, avoiding the congestion issues seen in traditional blockchains like Bitcoin. 

Even as the network grows, it doesn’t lose its decentralization or security, as the protocol allows for multiple block confirmations without needing a centralized entity or sacrificing consensus.

As such, it successfully navigates the scalability trilemma as pictured below.

Did you know? The scalability trilemma — the trade-off between scalability, security and decentralization — was first proposed by Vitalik Buterin in 2017. Most blockchains can only optimize two out of the three.

2. Low transaction fees and fast confirmation times

Because Kaspa processes multiple blocks at once, block times are much faster compared to traditional blockchains. This leads to a significant reduction in the time it takes for a transaction to be confirmed. 

On top of that, Kaspa keeps transaction fees low, making it an affordable option for users who need a high volume of transactions. Faster confirmations and low costs make it ideal for daily use, business applications and other time-sensitive scenarios.

3. Energy efficiency and environmental benefits

Kaspa’s GhostDAG protocol not only speeds up the network but also reduces its energy consumption.

By allowing for fairer mining and efficient block validation, Kaspa uses far less energy than older PoW blockchains. This focus on energy efficiency helps reduce the environmental impact, making Kaspa a more sustainable option in the blockchain ecosystem, which is especially important in the face of growing concerns about crypto mining’s carbon footprint.

4. Fairness in mining

As hinted above, in Kaspa’s network, mining is designed to be as fair as possible. Many older blockchains give large, well-funded miners an advantage, making it hard for smaller miners to compete.

Kaspa avoids this by leveling the playing field. The use of the GhostDAG protocol, a balanced block reward system, fast block times and support for GPU mining promote a more decentralized and fair mining ecosystem by reducing the dominance of large miners and allowing smaller participants to compete effectively.

Kaspa employs a unique block reward structure with two phases. Initially, the “Pre-deflationary Phase” offered a high reward rate, starting randomly between 1 and 1,000 KAS (KAS) per block, which later stabilized at 500 KAS per block. 

In the “Chromatic Phase” of Kaspa’s block reward system, the number of coins miners receive gradually decreases each month, similar to the way musical notes change on a scale. This design aims to control coin supply, balance network security with miner incentives, and promote long-term sustainability.

Did you know? GPU mining for Kaspa is best suited for cards with high memory bandwidth, like the Nvidia 3000 series. This is because Kaspa’s kHeavyHash algorithm is light on the core but requires fast memory access for optimal performance.

How to mine Kaspa (KAS)

Mining Kaspa (KAS) is fairly straightforward, whether you’re a seasoned miner or just starting out. With the right hardware and software setup, you can get involved in securing the Kaspa network while earning rewards for your efforts. 

Here’s a breakdown of what you need and how to start.

Overview of hardware and software requirements

To mine KAS, you’ll need some basic hardware and software:

• Hardware: Kaspa can be mined using GPUs (graphics processing units). While high-end GPUs will give you better results, you don’t need the most expensive hardware to get started. Nvidia and AMD cards are widely supported, so if you already have a decent gaming or mining rig, you’re set. Kaspa doesn’t require ASICs (application-specific integrated circuits) like Bitcoin, so it’s accessible to many miners.
• Software: You’ll need to download and install compatible mining software. Popular options for mining Kaspa include lolMiner, BzMiner and GMiner, which are widely supported and regularly updated. You’ll also need a Kaspa wallet to receive your mining rewards; official wallets are available for desktop and mobile.

A step-by-step guide to setting up a Kaspa mining operation

1. Choose your hardware: Make sure your GPU is set up and ready. You can use mining calculators to estimate your hardware’s potential hashrate and profitability for mining Kaspa.
2. Install mining software: Download one of the mining programs (lolMiner, BzMiner or GMiner), install it, and configure the settings based on your GPU and preferences.
3. Configure the software: Input your Kaspa wallet address into the mining software so the rewards are sent directly to you (this step depends on whether you’re mining with a pool or not). 
4. Start mining: Run the mining software, and your GPU will begin the technical trial-and-error required to confirm transactions on the Kaspa network. The mining software will display your hashrate, shares submitted and the estimated rewards.
5. Monitor and optimize: Keep an eye on your rig’s performance. You may need to tweak settings like power usage or overclock your GPU for maximum efficiency. Tools like MSI Afterburner can help you with this.

Did you know? In Kaspa mining, solo mining lets you operate independently and potentially claim full block rewards, which might be less frequent but larger. Pool mining, on the other hand, involves collaborating with other miners to find blocks more consistently and sharing rewards for more regular but smaller payouts.

Profitability and block reward structure

Whether you’re mining with a pool or going it alone, Kaspa’s block reward system is fair and transparent. Blocks are generated every second, and the reward for each block is distributed among miners based on their contributions to the network’s hashrate.

The current block reward decreases over time, following a deflationary model. However, since Kaspa is designed to allow faster block generation and more frequent transactions, miners can still expect consistent returns. 

As touched upon, you can use online profitability calculators to factor in your hardware, electricity costs and the current KAS price to estimate your earnings.

In general, Kaspa offers a balanced and fair mining experience, making it accessible for both small-scale and larger miners.

Where to buy Kaspa (KAS)

Kaspa (KAS) can be traded on several cryptocurrency exchanges. Some of the most popular platforms that support KAS trading include:

• TradeOgre: A smaller exchange known for supporting various altcoins, including Kaspa.
• MEXC: A user-friendly platform with robust liquidity and support for KAS.
• CoinEx: Another well-regarded exchange that offers KAS trading pairs. As Kaspa continues to grow, more exchanges are expected to list KAS, further increasing accessibility.

Caution: Any centralized exchanges, including those listed above, may only service certain regions and territories due to local regulations. Always check availability in your area before choosing an exchange.

Naturally, after purchasing Kaspa (KAS), it’s important to store it securely. Here are the key wallet options:

• Kaspa Native Wallet: This is the official wallet provided by the Kaspa team, offering the most direct and comprehensive support for storing and managing KAS, perfect for users focused primarily on Kaspa.
• Hardware wallets: Kaspa is now supported by Ledger hardware wallets, including the Nano S, Nano S+ and Nano X. Although Ledger Live doesn’t directly support Kaspa, you can manage your KAS using the KasVault web interface along with your Ledger device. Additionally, Tangem wallets, known for their portability and security, also support KAS.
• Third-party wallets: For multicurrency options, wallets like Zelcore allow you to store not only KAS but other cryptocurrencies as well, ideal for those managing multiple assets in one place.

It also (almost) goes without saying that you should always activate 2FA (two-factor authentication) on your exchange and wallet accounts, be cautious of suspicious links or messages that could lead to phishing sites, and never share your private keys with anyone, storing them offline in a secure place.

The future of Kaspa blockchain

With a range of ultra-fast proof-of-stake consensus mechanisms knocking around, such as Solana’s high-throughput network, Avalanche’s subnet architecture and Cardano’s Ouroboros protocol, the competition in blockchain scalability and efficiency is intensifying.

Yet Kaspa, with its cutting-edge GhostDAG protocol, continues to carry the torch for PoW, enhancing the scalability and efficiency of traditional blockchains.

By enabling parallel block processing and significantly improving transaction throughput, Kaspa maintains the security and decentralization benefits of PoW while matching the performance of newer consensus models. In fact, there are long-term objectives in place to increase network performance to 32 blocks per second.

A key milestone in Kaspa’s future is the transition to Rust, an ambitious overhaul of its codebase designed to boost performance and prepare the network for even greater scalability.

This move is not only modernizing the network’s architecture but also positions it for seamless future upgrades, unlocking the potential to scale well beyond its current capabilities.

Moreover, the launch of the Kaspa Industrial Initiative (KII) in 2024 marked a major step toward real-world adoption. KII aims to integrate Kaspa’s blockDAG technology across industries such as finance, energy and supply chain, showcasing its utility in large-scale applications. By creating partnerships with leading companies and promoting the adoption of decentralized solutions in industrial sectors, Kaspa is positioning itself as a major player in enterprise blockchain solutions.

Lastly, the project’s growth is also fueled by a highly engaged community and a rapidly expanding developer base. With over 1,000 active contributors and a robust developer ecosystem, Kaspa’s ongoing innovation and improvements are driven by a growing group of enthusiasts and professionals committed to advancing its technology.

As it continues to evolve with technological upgrades, industrial adoption and a strong community backing, Kaspa is poised to carve out its place as a leader in the blockchain space, championing the future of a scalable and secure proof-of-work model.