Chapter 03 · The problem
Why ten blocks a second is hard.
Three stages over one picture. Pick a pace; the demo below follows it, and its sliders stay yours afterwards.
Speed needs frequent blocks. Two found within the same fraction of a second collide, and a single chain throws one away.
Teaching model. Two blocks found in the same moment.
Payment: accepted
Same payment, conflicting: rejected
Order: 1 · A then 2 · B. Both count.
Why Bitcoin doesn’t have this problem
Bitcoin avoids collisions by making blocks rare: one every ten minutes. Kaspa keeps both blocks, in a .
Single chain so far: 0 kept, 0 thrown away
BlockDAG so far: 0 kept, 0 thrown away
Add blocks one at a time.
The one sentenceA chain throws fast blocks away; a blockDAG keeps them, and that one change carries everything after it.
The exact version
The same chapter with the workings shown: the derivations, the edge cases, and the numbers behind the plain version.
Crypto’s hard problems, and where Kaspa stands on each
12 hard problems, sorted by how far Kaspa’s answer has got.
How far each Kaspa answer has got, and what others are trying.
Waiting an hour to be sure
Kaspa’s answer. Many blocks a second, all kept and ordered, so a payment settles in seconds.
Elsewhere. Bitcoin’s Lightning channels; proof-of-stake chains with fast finality.
KIP-14: 10 blocks a second since May 5, 2025Whoever makes the next block can shut you out
Kaspa’s answer. Miners are sampled ten times a second, so a censored payment waits seconds, not an hour. It only holds while mining stays spread out.
Elsewhere. Bitcoin gets there in about an hour; Ethereum researchers are designing inclusion lists.
Sompolinsky, Feb 16, 2026Fast blocks waste work and favor big miners
Kaspa’s answer. GHOSTDAG keeps blocks made at the same moment instead of throwing them away, so speed favors no one.
Elsewhere. Most proof-of-work chains keep blocks slow to avoid this.
Sompolinsky, Wyborski, Zohar: PHANTOM and GHOSTDAGInsiders get the coins first
Kaspa’s answer. An empty genesis: no premine, no sale. DAGLabs mined about 2.5 to 3% early, in the open.
Elsewhere. Bitcoin launched the same way; most later coins didn’t.
kaspa.org: empty genesisSpeed usually means big servers
Kaspa’s answer. Proof-of-work at 10 blocks a second on a home machine (8 cores, 16 GB), and nodes prune old data.
Honest caveat. Mining itself is concentrated in a few pools, as on Bitcoin.
Node guide, Rusty KaspaRules on money without a giant shared computer
Kaspa’s answer. Covenants: coins that carry their own spending rules, checked by every miner. Active since Toccata, Jun 30, 2026.
Elsewhere. Ethereum runs one shared computer; Bitcoin debates covenant proposals.
KIPs 16, 17, 20, 21 marked activeTokens that only an indexer understands
Kaspa’s answer. KCC-20, a token standard checked by every miner on Kaspa itself. Final Oct 21, 2026; wallets still adopting.
Elsewhere. Bitcoin’s BRC-20 tokens have the same indexer problem.
Sutton, Sep 20, 2026Shared apps without bloating every node
Kaspa’s answer. vProgs: apps run off the chain and prove their work with zero-knowledge proofs every node checks cheaply. A first one runs on testnet since Sep 24, 2026.
Elsewhere. Ethereum’s zero-knowledge projects take a similar proof route, with separate operators.
vProg on testnet, announced Sep 25, 2026Safety that rests on a guess about network delay
Kaspa’s answer. DAGKnight needs no delay setting and adapts to the network. Not faster on its own; it makes faster block rates safe. Not on mainnet.
Elsewhere. Nearly every chain hard-codes timing assumptions.
Sompolinsky, Sutton: The DAG KNIGHT ProtocolQuantum computers and exposed keys
Kaspa’s answer. KIP-22 hides public keys until coins are spent. Still an open proposal, not active.
Elsewhere. Every chain on today’s signatures shares this problem.
KIP-22 proposalPaying miners once new coins run low
Kaspa’s answer. None yet. Fees have to grow, which needs real use. Bitcoin faces the same question.
What would settle it. Fees paying a meaningful share of miner income.
See Who got the coinsReal use, not speculation
Kaspa’s answer. Not solved. Sompolinsky: only a handful of chains have found product-market fit, “the rest are ghost chains fueled by synthetic activity,” and adoption should be the top priority.
Elsewhere. The same problem across crypto.
Kaspa Daily Q&A
Every row above has a history; the timeline sits with this chapter’s sources below.
Sources and the raw numbers
The collision math
Blocks arrive at random, like raindrops: a Poisson process with rate λ. Two collide when the next one is found before the first has spread, which takes delay d. A single chain then grows at about λ / (1 + λd) blocks a second, so it keeps 1 / (1 + λd) of them and throws away λd / (1 + λd). At Kaspa’s ten a second and a 250 ms delay, λd = 2.5 and a chain would throw away 2.5 / 3.5 ≈ 71% of blocks. The growth-rate formula is from Sompolinsky and Zohar, eprint.iacr.org/2013/881; Kaspa’s answer is in the PHANTOM/GHOSTDAG paper, eprint.iacr.org/2018/104.
“Math” mode also shows the network-delay slider in the toy above.
How crypto got here, and where Kaspa’s research went
From Bitcoin’s paper in 2008 to the next Kaspa upgrade. Pick any moment.
Top row: crypto at large. Bottom row: the papers and upgrades behind Kaspa. Pick any moment.
Lehman Brothers fails
The bank’s bankruptcy is the peak of the financial crisis. Trust in banks is at a low, and six weeks later Bitcoin’s paper arrives.
Bankruptcy of Lehman BrothersBitcoin’s white paper
Got right. Money nobody runs, secured by proof-of-work, with a fixed supply anyone can check.
Left open. One block every 10 minutes, about an hour to be sure, and a handful of payments a second.
Nakamoto, 2008The first block
Bitcoin starts running. Its first block carries that day’s Times headline: “Chancellor on brink of second bailout for banks.”
Bitcoin wiki: Genesis blockThe first payment
Satoshi Nakamoto sends 10 bitcoin to the programmer Hal Finney, in block 170. Bitcoin has no price yet; a handful of cryptography fans run it as a hobby.
History of bitcoinTwo pizzas
Laszlo Hanyecz pays 10,000 bitcoin for two pizzas, the first well-known purchase with it. At the October 2025 high, those coins were worth over a billion dollars.
The original forum thread184 billion bitcoin, briefly
A bug lets someone create over 184 billion bitcoin in one transaction. Within hours it is spotted and fixed, and the chain is rolled back. An early lesson that code is the rule, and code has bugs.
History of bitcoinOne bitcoin, one dollar
Bitcoin reaches parity with the US dollar.
History of bitcoinSatoshi leaves
Bitcoin’s creator writes to a fellow developer that he has “moved on to other things” and is never heard from again. Since then nobody owns or speaks for Bitcoin, which is part of the point.
Satoshi Nakamoto on WikipediaThe first crash
Bitcoin has just climbed past $30. A break-in at Mt. Gox, the main exchange, briefly drives its price there to one cent, and the bubble deflates over the summer.
History of bitcoinBitcoin on prime time
The CBS drama The Good Wife puts bitcoin on trial in an episode called “Bitcoin for Dummies.” Jim Cramer tells the court it isn’t a real currency.
History of bitcoinFirst halving
The reward per block drops from 50 to 25 bitcoin, as written into the code. It halves every 210,000 blocks, about four years. Kaspa’s supply shrinks a little every month instead.
Bitcoin wiki: Controlled supplyBitcoin splits by accident
Two versions of the software disagree about one large block, and the chain forks in two. Miners agree to fall back to the older version and the split heals within hours.
History of bitcoinSilk Road shut down
The FBI closes the dark-web market that made bitcoin notorious and arrests its founder.
Silk Road on WikipediaPast $1,000
Bitcoin passes $1,000 for the first time. A week later China bars its banks from handling it, and the price falls back.
History of bitcoinGHOST
Solved. Sompolinsky and Zohar show that counting the heaviest tree of blocks, not the longest chain, lets blocks come faster safely. Ethereum adopted a variant.
Left open. Blocks off the main tree still lose their payments.
Sompolinsky, Zohar: Accelerating Bitcoin’s Transaction Processing (FC 2015)Mt. Gox fails
The exchange that handled most bitcoin trading stops withdrawals on Feb 7 and files for bankruptcy on Feb 28, with about 850,000 bitcoin missing. Customers waited a decade for partial repayment. The lesson repeats all the way to FTX: coins held by a middleman are only as safe as the middleman.
Mt. Gox on WikipediaDell takes bitcoin
Dell and Newegg start accepting bitcoin at checkout, at the high point of “pay with bitcoin” for shopping.
History of bitcoinBitstamp hacked
Less than a year after Mt. Gox, the exchange Bitstamp loses about 19,000 bitcoin from its online wallet and goes offline for days. It reopens and repays customers.
History of bitcoinEthereum
Got right. A shared programmable computer: tokens, exchanges and apps on one chain.
Got wrong or left open. One shared state means congestion and fee spikes; the launch supply was sold in a presale, with about a sixth set aside for the foundation and early contributors.
Ethereum white paperThe DAO hack
A bug in a popular Ethereum contract lets an attacker drain about 3.6 million ether. On Jul 20 Ethereum rewrites its history to return the funds, and the holdouts carry on as Ethereum Classic.
The DAO on WikipediaSecond halving
The block reward drops from 25 to 12.5 bitcoin.
Bitcoin wiki: Controlled supplySPECTRE
Solved. A block DAG: parallel blocks all count, and payments confirm in seconds.
Left open. No single order of all transactions, which smart contracts need.
Sompolinsky, Lewenberg, Zohar: SPECTREThe token sale boom
Got right. Anyone could fund a project from anywhere.
Got wrong. Most of those tokens are now worth close to nothing. The satire version
Initial coin offeringsThe block-size split
After two years of arguing about how big blocks should be, Bitcoin splits: Bitcoin Cash takes bigger blocks, and Bitcoin keeps small ones. The trade-off Kaspa was built to escape.
History of bitcoinCryptoKitties
A game of breeding cartoon cats launches on Ethereum. By December it is so popular it clogs the whole network.
CryptoKitties on WikipediaThe first big bubble
Bitcoin nears $20,000 in mid-December, and regulated bitcoin futures open in Chicago.
History of bitcoin on WikipediaStripe drops bitcoin
The payments company stops supporting bitcoin, citing falling demand, rising fees and slower payments.
History of bitcoinPHANTOM and GHOSTDAG
Solved. A full order over a block DAG: blocks that saw almost everything are honest, the rest are ordered after them. This is Kaspa’s consensus today.
Left open. It needs a fixed guess about network delay (the k setting).
Sompolinsky, Wyborski, Zohar (AFT 2021)The bottom
Bitcoin dips below $3,300, down about 76% in a year. The press calls it “crypto winter.”
History of bitcoinBinance hacked
Hackers steal 7,000 bitcoin, about $40 million, from the world’s biggest exchange. It covers the loss from its own fund.
Binance on WikipediaFacebook’s Libra
Facebook announces its own global coin. Governments push back hard, and the project is renamed Diem and later sold off.
Diem on WikipediaWall Street’s plumbing
After regulatory delays, Intercontinental Exchange, owner of the New York Stock Exchange, starts trading bitcoin futures through Bakkt.
Bakkt on WikipediaThe COVID crash
Markets panic as the pandemic hits, and bitcoin loses about half its value in early 2020, near $5,000 by mid-March. By July the loss is recovered.
History of bitcoinThird halving
The block reward drops from 12.5 to 6.25 bitcoin.
Bitcoin wiki: Controlled supplyOpen finance experiments
Got right. Lending and trading that run on public code, open to anyone.
Got wrong. Leverage, hacks and fees that priced out small users. The satire version
ethereum.org on DeFiA company buys bitcoin
MicroStrategy puts $250 million of its cash into 21,454 bitcoin. Holding bitcoin on the balance sheet becomes a playbook, and the company later renames itself Strategy.
MicroStrategy press release (SEC filing)Tesla buys in
Tesla announces $1.5 billion in bitcoin and plans to accept it for cars. Bitcoin jumps past $44,000.
History of bitcoinNFTs go mainstream
A digital collage by Beeple sells at Christie’s for $69.3 million. The NFT craze peaks that year; most of the pictures later trade for a fraction of the price.
Everydays on WikipediaA country adopts bitcoin
El Salvador makes bitcoin legal tender. Few people use it for payments, and in February 2025 it stops being legal tender.
Bitcoin in El SalvadorKaspa launches
Solved. GHOSTDAG live at one block a second, with no premine and no sale.
Left open. A small network with few users; the Go node limited speed until a Rust rewrite.
Kaspa wikiTerra collapses
TerraUSD, a “stablecoin” held up by an algorithm instead of reserves, loses its dollar peg, and its sister coin Luna falls close to zero within days. Tens of billions of dollars vanish, and lenders that bet on it start to fail.
Terra on WikipediaEthereum’s Merge
Ethereum switches from mining to staking and cuts its energy use by more than 99%. Security now comes from coins locked up rather than work done. Kaspa stays with proof-of-work.
ethereum.org: The MergeDAGKnight
Solved, on paper. No fixed delay guess: the protocol adapts to the network and tolerates attackers just under half the power.
Left open. Not on mainnet yet.
Sompolinsky, Sutton: The DAG KNIGHT ProtocolFTX collapses
Got right. Chains kept running; self-custody held up.
Got wrong. FTX, an exchange holding customers’ coins, spent them and filed for bankruptcy within a week of the first reports. Trust in middlemen, not chains, broke. The satire version
Bankruptcy of FTXPictures on Bitcoin
Ordinals let people inscribe images and tokens onto Bitcoin itself, and blocks fill up with them.
History of bitcoinA dollar coin wobbles
Silicon Valley Bank fails with $3.3 billion of USDC’s reserves inside. The stablecoin briefly loses its dollar peg until the deposits are guaranteed.
USDC on WikipediaBinance pleads guilty
The largest exchange agrees to pay $4.3 billion for breaking US money-laundering and sanctions laws, and its founder steps down.
US Department of JusticeBitcoin ETFs
The SEC approves 11 spot bitcoin funds, and trading opens the next day. Retirement accounts and advisers can now buy bitcoin like a stock.
ReutersFourth halving
At block 840,000 the reward drops from 6.25 to 3.125 bitcoin. Fees now matter more to miners each cycle, the same question Kaspa’s supply chapter asks.
Bitcoin wiki: Controlled supplyThe Rust node
The first stable release of Kaspa’s rewritten node. It is fast enough to make ten blocks a second realistic.
Michael SuttonA bitcoin miner mines Kaspa
MARA, one of the largest US bitcoin miners, announces it is mining Kaspa too.
MARA press releaseEther ETFs
Spot ether funds start trading in the US, six months after bitcoin’s.
ReutersKaspa’s price high
KAS reaches about $0.21, its highest price so far. Where it stands now.
CoinGeckoThe election rally
Donald Trump wins on Nov 5 after campaigning as pro-crypto. On Dec 5 bitcoin passes $100,000 for the first time.
ReutersThe biggest theft
Hackers take about $1.5 billion in ether from the exchange Bybit, the largest crypto theft on record at the time. The FBI attributes it to North Korea.
FBI announcementA US bitcoin reserve
An executive order sets up a Strategic Bitcoin Reserve, filled with bitcoin the government had seized, which it says it will not sell.
The White HouseTen blocks a second
Solved. The Crescendo upgrade cut block time from 1 s to 0.1 s; coins per second stayed the same.
Left open. Blocks are far from full; speed without use.
KIP-14, Michael SuttonA stablecoin law
The GENIUS Act becomes the first US federal crypto law: dollar stablecoins must be backed one-for-one by cash and short-term Treasuries.
Congress.govA record, then a record wipeout
Bitcoin peaks near $126,000 on Oct 6. Four days later a tariff headline sets off over $19 billion of forced selling of borrowed bets, the largest in a single day.
ReutersThe slide
Bitcoin falls to about $63,000, its lowest since before the election. The crypto market has lost about $2 trillion since its October peak.
ReutersThe 20 millionth bitcoin
Only one million are left to mine, spread over the next 114 years.
The BlockCoins with rules
Solved. Toccata switched on covenants; the KCC-20 token standard was marked final on Oct 21, 2026.
Left open. Wallets still adopting; few apps yet.
KIPs marked activeMarket rules stall
The CLARITY Act, which would split crypto oversight between the SEC and the CFTC, fails a Senate vote 49 to 50. It passed the House in July 2025.
Congress.govAn even bigger theft
Hackers take more than $6 billion in crypto from Binance, about four times the Bybit theft. The FBI attributes it to North Korea. Withdrawals reopen in phases from Nov 1, with more networks from Nov 3, and Binance says it has covered about 95% of the loss.
FBI announcementNext, no dates
The plan. DAGKnight on testnet, then mainnet; higher block rates such as 100 a second once they are safe; shared apps through vProgs.
The open question. Whether real use arrives to pay miners. Kaspa’s view of where crypto should go: Bitcoin’s security, without the wait.
Sompolinsky on Bitcoin Takeover
The 2021 launch is where the rest of this page picks up. One order shows how Kaspa lines up blocks that arrive at the same moment.
The problem map: what the stages mean
Live: running on mainnet. Early: live, little use yet. On paper: a paper, proposal or testnet. Unsolved: no answer yet. For the same problems played as satire, open Probably Nothing OS.