July 10, 2024
A 39,000% Gain Has Me Ready to Rock the Kaspa!
Dear Subscriber,
A while back, we talked about the need for Bitcoin (BTC, “A”) miners to diversify to increase their bottom line.
But it’s not just Bitcoin. The idea of diversifying what crypto has to offer is essential to the innovative and progressive spirit of cryptocurrencies.
Just look at Ethereum (ETH, “A-”), and how it changed the game for all altcoins by deviating from Bitcoin’s proof-of-work consensus mechanism to a proof-of-stake system.
PoW is an energy-intensive endeavor. PoS allows for lightning-quick transaction speeds and more of them.
It’s different for Bitcoin. That blockchain primarily deals with only Bitcoin transactions, so PoW works fine. But to support Ethereum’s ever-growing smart-contract ecosystem, it needed something more scalable.
This is a great example of how diversification makes room for new opportunities. And that is always something to be on the lookout for in crypto.
Like this …
One of the big Bitcoin miners, Marathon Digital Holdings, is diversifying away from mining just Bitcoin. In its place, it’s started to mine Kaspa (KAS, Not Yet Rated).
Yes, like the rebellious spirit in The Clash's "Rock the Casbah."
In just nine months, Marathon has gathered 93 million KAS — which is now worth $15 million — and has shaken up industry norms in the process.
The old adage says to “follow the smart money.”
So, let’s follow Marathon’s logic into why this up-and-coming crypto project deserves its … and, potentially your … time and investment dollars.
What Is Kaspa?
Kaspa is the fifth largest proof-of-work digital asset by market cap at the time of writing.
It’s valued at $3.9 billion as of June 25, 2024, and has a daily trading volume of roughly $64.8 million.
And it has a circulating supply of around 24 billion KAS, with a current block reward of 103.83 KAS.
Like Bitcoin, it comes with a built-in supply cap. The total supply will max out at 28.7 billion KAS.
Source: Coinmarketcap.com. Proof-of-Work Tokens by Market Cap.
Click here to see full-sized image.
KASPA was listed on MEXC — a centralized exchange known to list coins very early in their life cycle — back in October 2022.
And while the wider market has been experiencing ups and downs — as most of 2023 was still firmly in “bear market” territory — KAS has been on a rocket ride higher, generating a staggering 39,000% return in that time.
Source: CoinMarketCap. Kaspa/USD chart revealing the 39,000% gain.
Click here to see full-sized image.
Kaspa aims to solve the issues that older blockchains like Bitcoin and Ethereum face. Namely, that they can be slow and pricey.
But Kaspa uses a special technology called GHOSTDAG to make transactions lightning fast and secure.
KASPA V BTC comparison Chart.
Click here to see full-sized image.
So, how does GHOSTDAG work? And why is it such a game changer?
Well, think back to your last crypto transaction.
Even on blockchains like Solana (SOL, “B”) — which is much faster than, say, Ethereum — transactions aren’t instantaneous. That’s because each transaction needs to be verified individually, and that takes time.
But if a transaction takes too long, the price of the underlying asset might change. So, you have to redo your entire transaction and hope it goes through faster this time!
Now, imagine making a payment and having it confirmed almost instantly.
That’s what GHOSTDAG allows Kaspa to do.
Unlike traditional blockchains that process one block at a time, GHOSTDAG can handle multiple blocks simultaneously, speeding up the whole process.
Kaspa’s system can process a ton of transactions every second, making it one of the fastest networks out there.
This is great for everyday retail use or for more complex operations like running decentralized applications.
And not only is it fast, but it’s also scalable.
Eco-Friendly Mining
One of the coolest things about Kaspa is how it mines its coins.
Bitcoin mining, for example, uses a lot of energy. That’s because of its PoW consensus mechanism I mentioned earlier. PoW means transactions are validated when miners solve complex algorithms. And that takes a lot of energy … and money.
Kaspa, on the other hand, uses an algorithm called kHeavyHash, which is much more energy efficient. This means it’s better for the environment and cheaper to run.
The mining hashrate — which gauges the interest and improves security of the network — is up 8x this year.
As you can see in the chart below, the increase date in September 2023 perfectly aligns with Marathon Miners turning on the Kaspa miners.
Kaspa Hashrate chart
Price — Blue; Hashrate — Black.
Click here to see full-sized image.
With many regulations and laws about Environmental, Social and Governance (ESG) in the pipeline, eco-friendly mining is a major plus when it comes to attracting institutional money.
As institutions increasingly prioritize ESG criteria, Kaspa’s environmentally conscious approach could draw more institutional investors and miners in the future.
But, as my colleague Dr. Bruce Ng has pointed out before, tokenomics and a project’s fundamental strength is only half of the equation.
Narrative and community play a huge part in the success or failure of new crypto projects.
And Kaspa is all about the community.
It is a truly decentralized project, developed and governed by its users from around the world. Everyone’s input matters, and that community and democratic focus will appeal to many avid crypto users … as well as new retail investors looking for a respite from TradFi’s centralization.
And, true to the era we live in, Kaspa even has its own merch store so you can “rock the Kaspa” in style.
Rockthekaspa.com. Kaspa Merch Store.
Click here to see full-sized image.
The Big News: KRC-20 Token Standard
And I believe the best is still ahead for this new crypto project. Sure, it’s already seen a staggering price increase since launch. But recently, on June 30 to be exact, Kaspa launched its KRC-20 token standard.
This allows developers to create their own tokens on the Kaspa network. Introducing KRC-20 tokens is a monumental development for Kaspa as it opens the floodgates for new projects and applications to be built on its network.
This could dramatically boost Kaspa’s adoption and market value. Just look at how similar to how tokenized standards have significantly increased the total value locked — a great metric for usage in DeFi spaces — token price and market cap for other Layer-1 networks like Ethereum, Solana, Toncoin (TON, “B-”) and more.
With Marathon Digital’s big investment in Kaspa — which is expected to grow to over 16% of the total hashrate — I expect more miners and investors to jump on board in the long term.
Kaspa’s unique technology, efficient mining process and strong community support make it a promising player in the crypto world. So, if you’re looking for a new investment or just curious about the latest crypto, keep an eye on Kaspa. It might just be the next big thing!
And I’ll be keeping a keen eye on developments with Kaspa’s KRC-20 token standard. As money flows into this new protocol, we may find some gems there.
If I see anything worth looking into, you’ll find out about it right here, in my Weiss Crypto Daily updates.
Best,
Mark Gough
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