What is Kaspa
If you look at the price performance of Casper for the past one year and even the maximum, you'll see that this coin actually launched in early 2022, just about a year and a half ago. Interestingly, this coin has not been in a bear market; in fact, it's probably one of the strongest performers during this bear market. As we speak, it's pretty much testing an all-time high.
So, what exactly is this project? Let's get into it. First things first, Casper claims to be a DAG (Directed Acyclic Graph). It's this revolutionary block-DAG, a Ghost-DAG protocol. What does this mean? At its core, Casper is a proof-of-work public distributed ledger. It's not exactly a blockchain, and its consensus protocol is called the Ghost DAG.
The mission of Casper is to be the fastest and most scalable instant confirmation transaction network. We'll examine this closely in a bit to understand just how fast it is and what instant confirmation means. Here's a bit more about Casper. There are a couple of interesting points to note about Casper's block-DAG.
DAG Explained
This tag uh kind of structure for a uh distributed ledger so how a dag differentiates from a blockchain is that instead of having a linear set of blocks to include your transactions a tag instead forms blocks in multiple with multiple at the same time and they can point to each other as the new blocks are created so here is a very simple example a blockchain is always linear so you have one block coming after the another so one block can only include a certain amount of transactions and before these first transactions are finalized and included in this data structure no new transactions can be included a dag hover on the other hand can have multiple streams of transactions happening at the same time so we have ABC here and then three blocks of transactions all being processed and then here another three and this tag format stands for direct acyclic graph which means when you have this graph structure instead of a one chain each of these blocks can point to multiple other blocks of transactions and this is the directed acyclic graph part A directive meaning uh there is a first and second relationship so directions mean that's why you see these arrows and Asic collectors means there it isn't a a circular structure instead it's still going in kind of one general direction but there are multiple streams happening at the same time so by using this data structure projects and networks like Caspa can have a much better transaction throughput and settlement a much faster settlement time because of this parallel processing so we'll get into that in a bit in comparison and something else I wanted to mention specifically about Casper's dag is actually its founder so Casper's founder Jonathan some polinski he is a PhD researcher that specifically invented the goldstack protocol now why is this important this is because Jonathan himself actually uh the having invented this gold stack protocol this this Ghost Protocol was actually heavily referenced in ethereum's current state uh and even in ethereum's latest white paper for uh Gasper which is their implementation of this Ghost Protocol in combination with ethereum's Casper vitalik actually references Jonathan and his advisor who are those two per those two researchers actually invented this protocol so this is actually very notable and I dug into this this is actually true I'll show you the reference of this Okay so before we get into the Nitty Gritty about Casper a few General pros and cons of this dag structure uh as kind of a uh yeah as a kind of primer so three main pros of a dag versus a blockchain so number one is speed transactions in a tag are not bound by the block times so this offers them rapid transaction processing Without Limits on the transaction volume so because you have this parallel processing you can have very quick transaction settlement so on Casper you have one second block times which means every second new blocks are created and settled and you can see this on the Casper Explorer right here so here you have new blocks and you can see the timestamps and every second that there's at least one block of transactions happening so this is much faster than typical blockchains that happen in a linear fashion number two is that bag based Networks diagrams networks generally have lower transaction costs compared to blockchains like ethereum or Avalanche this makes them very suitable for microtransactions and number three is that dags are very energy efficient so another example of a dag is Phantom so Phantom network is not a blockchain it's a tag structure and it uses minimal energy for transactions so it's uh transaction energy consumption is super low so it's really suitable for Global adoption or if you have an ESG friendly investor they would love to invest in Dags.
Kaspa GHOST DAG
Ethereum's current consensus algorithm uses this park called Gasper, so this is a combination of their own Casper finality Gadget and the OMD ghost Fork Choice algorithm. So, here Ghost stands for Greedy Heaviest Observed Subtree, which just means it's an algorithm to select which fork of a blockchain is deemed to be the official one based on how much total weight the fork has. This Ghost Protocol is actually invented by Casper's founder, Jonathan, and his PhD Mentor, Aviv Zohar. I'll show you the actual reference of this. Here is the official white paper written by Vitalik and Ethereum Foundation researchers combining Ghost and Casper. If you just search up Ghost here, you can find the actual reference of the Ghost Protocol, introduced by Sam Polinski and Zohar. Sam Polinski is Jonathan Sam Polinski, and Zohar is Aviv Zohar, his mentor. This is essentially what Ghost does: you have one of these, think of this as a blockchain, and each of these is an individual block. When you have a fork happening, you determine which chain of blocks is the official one based on the weight of the subtree. In this case, the colored one is the official subtree because it has the highest weight, even though the other chain has a longer chain of blocks. This is what Ghost is.
Other DAG Cryptos
Other crypto networks that use this tag structure include, for example, IOTA, which is one of the oldest ones. IOTA's Tangle consensus algorithm is tag-based. More recently, we also have Hashgraph, Phantom, Constellation, DAI, and Nano from the 2017 bull market. Even more recently, tags are still a popular concept.
Bet you didn't know this, but the Sui project, which is emerging from the Aptos Suite and Facebook Libre project, is also a DAG-based network. In Sui's official documentation, they discuss their consensus engine called Narwhal and Tusk, and their mempool is based on a tag structure. You can see in the architecture of the Sui mempool and the Sui tag how multiple blocks are proposed and created in parallel. When blocks are introduced, they all point to multiple sets of other blocks, creating a directed acyclic graph (DAG) structure. DAGs are not unique to Casper; many other networks use DAGs today. It's well-known that tags enable parallel processing, making it much faster and cheaper than linear blockchains.
Now that we've covered that, let's make some more direct comparisons.
Kaspa vs Ethereum
So here, Casper claims to be the best of both worlds, combining Bitcoin and Ethereum. But how valid is this? Spoiler alert: I don't think it's comparable to Bitcoin or Ethereum.
Number one, how does it compare to Ethereum right now? Casper says they are the second layer, sitting on top of a very secure proof-of-work mining algorithm that is super fast and also enables Ethereum Virtual Machine support. It aims to eventually bring on more smart contract support. However, as of today, Casper does not have EVM support. This means you cannot build decentralized applications on top of Casper; you can only send Casper coins to one another. This is the main functionality of the Casper Network today. At its current stage, it is not comparable to Ethereum, as you cannot build DeFi applications or more advanced use cases.
Investing Plan for KAS
All in all, I'm not looking to pick up Casper at the current price because it's revisiting its all-time high, and I think a correction is due. However, in the long term, purely long term, this is the strongest performing coin in the entire bear market. If you're looking to bet on it one or two years from now, this coin is likely to make new all-time highs. The tokenomics and token supply are clear, with only about 20-25% extra to be released in the next two years. The fully diluted valuation at 1.3 billion for a brand new layer one that's performing strongly doesn't seem overvalued.
In comparison, other brand new layer ones like Sui and Aptos are trading at 4.4 to 5 billion dollars, with the majority of the supply still locked up in early investors. Casper's tokenomics and evaluation are quite healthy, and 1.3 billion doesn't seem overvalued.