Author: Daniel Li, CoinVoice
In 2023, one of the most eye-catching projects is undoubtedly Kaspa, a new force that has become an important driving force in the current market trend. While new projects are emerging rapidly, traditional projects are also revitalizing. In recent months, the price of Kaspa (KAS) has surged, reigniting interest in "POW coins."
As an established blockchain, Kaspa was launched in 2021, a critical juncture as the cryptocurrency market transitioned from a bull market to a bear market. Unlike other cryptocurrencies that plummeted by nearly 90% during the bear market, Kaspa's token KSA demonstrated extraordinary resilience, soaring against the trend. Over the past year, the price of KSA has risen by over 800 times, significantly outperforming other cryptocurrencies. With the approaching Bitcoin halving date, it is expected that more miners and funds will enter the POW coin race.
Revitalized POW Mechanism
POW coins refer to cryptocurrencies based on the Proof of Work (POW) consensus mechanism, which requires miners to invest a significant amount of computing power and electricity consumption to complete the process of creating and verifying blocks. This approach has long been criticized for its energy consumption. Despite the expectation that POW would gradually be phased out, it has instead experienced a resurgence, bringing new vitality, closely related to the necessity of POW.
First, the POW mechanism is renowned for its security and reliability. By consuming a large amount of computing power and electricity, the POW mechanism ensures the security of the blockchain network. This energy-intensive characteristic gives the POW mechanism high security, capable of resisting malicious attacks and tampering. In the current digital asset market facing various threats and risks, security has become an important concern for users and investors. Therefore, the security features of the POW mechanism have become one of the important reasons for the rise of new projects.
Secondly, the POW mechanism possesses a stable infrastructure. As the earliest consensus mechanism applied to projects such as Bitcoin, the POW mechanism has undergone years of development and testing, gaining widespread validation and application. This stability enables the POW mechanism to provide opportunities for new projects to draw from and establish themselves on a mature infrastructure, reducing the risks of development and deployment. Additionally, there has always been a consensus in the industry that "bear markets favor POW" because the production of POW coins requires electricity consumption, providing objective value support and greater stability compared to POS coins.
Furthermore, fairness and decentralization are another key feature of the POW mechanism. By competing to select the next block's accounting node, the POW mechanism ensures that participants have a fair chance to receive rewards. This fairness attracts users and developers who value community consensus and decentralization. In the current cryptocurrency field, there is a trend towards greater fairness, transparency, and decentralization, making the POW mechanism, as a distributed consensus mechanism, once again receive attention.
Moreover, in addition to its security, stable infrastructure, fairness, and decentralization, the resurgence of the POW mechanism is also attributed to its integration with emerging technologies, bringing new opportunities and development space. Some new POW projects have combined current technological trends, such as artificial intelligence and the Internet of Things, to propose innovative application scenarios and solutions, attracting more developers and users' attention.
The POW mechanism, as a time-tested consensus mechanism, has once again become the focus of attention. Compared to the POS mechanism, POW has advantages in security, stability, fairness, and decentralization, providing a solid foundation for new projects. Through innovative integration with emerging technologies, POW is driving the blockchain towards greater decentralization and security.
"POW Coin" Craze May Become the Key Driver of the Next Bull Market
Since Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism in September 2022, the mining community in the Ethereum market has become divided. Due to the dominance of large capital whales controlling most nodes, it has become difficult for ordinary players to enter the market, resulting in a large amount of idle computing power. However, it is precisely at this time that new POW coin projects, represented by Kaspa, have risen to become the best destination for idle computing power in the market. The influx of a large number of miners has created the myth of Kaspa and sparked the craze for POW coins.
As a key force in the previous bull market rally, Bitcoin's influence may not be as significant in the upcoming market adjustment. Especially, BRC20 projects have not yet demonstrated the sector-driven wealth effect seen in DeFi. The market value of Bitcoin's inscription is only $500 million, and the liquidity within its ecosystem is quite limited. In contrast, the natural moat of POW coins requiring mining machines makes them considered to have longer-term value and potential, attracting investors who believe they have the potential to drive the bull market.
In terms of market capitalization, the market value of most new POW coins is mostly below $100 million, with the highest market value being approximately $1.9 billion for KAS. Compared to some established POW coins such as BCH and LTC, these new POW coins have greater potential for growth. For example, a POW coin like PEPEW, which combines GPU mining, DASH anonymity technology, and MEME attributes, has a market value of only $100,000, offering 100,000 times the growth potential compared to Dogecoin, and 5,000 times the increase compared to Pepecoin. It can be said that POW coins are currently in a period of enormous potential.
The development of the cryptocurrency market is cyclical, and mainstream consensus mechanisms may return to the POW mechanism. Whether it is the previously popular Bitcoin inscription or the recent hot POW coins, they have all proven this point. There is still demand in the market for the POW mechanism, especially as new POW coins combine new mining technologies, addressing some of the traditional POW coin's resource wastage issues, allowing POW coins to have longer-term and more sustainable development potential.
Highlighting POW Coins Worth Watching
The surge of Kaspa has ignited the craze for POW coins, attracting a large number of investors to enter this race, all seeking the next myth of KAS. Below is a list of POW coins with the potential to achieve hundredfold growth in the future.
Kaspa
Features: New flagship POW coin
Consensus Mechanism: PoW+DAG
Kaspa is an innovative decentralized first-layer blockchain project designed to provide a high-speed, scalable, and secure blockchain solution. It employs the Proof of Work mechanism and integrates the Phantom GhostDAG protocol to provide outstanding performance and functionality for users.
Unlike traditional Proof of Work chains, Kaspa utilizes the Phantom GhostDAG protocol to enhance its performance and scalability. This protocol allows simultaneously created isolated blocks to coexist and be ordered. This innovative directed acyclic graph (blockDAG) structure changes the traditional single-chain model of the blockchain, providing higher throughput and scalability. Through the Phantom GhostDAG protocol, Kaspa aims to process one block per second, providing fast transaction confirmation and highly scalable network.
KAS is the core token of the Kaspa ecosystem, launched in November 2021, with no pre-mining, no presale, and no token allocation. The maximum supply is 28.7 billion tokens, with a emission plan to halve every month through a smooth reduction of (1/2)^(1/12). In the past month, KAS has risen by 38.55%, with the current price at $0.1219.
Spacemesh
Features: Aims to be the people's currency, allowing anyone to participate in mining
Consensus Mechanism: Proof of Space-Time (PoST)
Spacemesh is an emerging project based on blockchain technology, aiming to build a highly secure and decentralized consensus network. Unlike traditional Proof of Work (POW) or Proof of Stake (POS) mechanisms, Spacemesh introduces an innovative consensus mechanism called Proof of Space-Time (PoST).
In Spacemesh, participants engage in the consensus process by allocating storage space on their computers. They create a local storage space called a Spacemesh node to store and verify the blockchain's transaction data. The size of a participant's storage space and its usage time determine their influence in the network and their opportunity to select the next block. To demonstrate their long-term commitment and contribution, participants need to provide proof of storage space over a period of time. The Proof of Space-Time consensus mechanism, by introducing a time factor, can identify and prevent malicious behavior, enhancing network security.
SMH is the native token of Spacemesh. With the slogan of becoming the people's currency, SMH gained high attention upon issuance, soaring from an opening price of $0.1 to a peak of $11, representing a more than 100-fold increase. The token supply limit is 2.4 billion, to be fully distributed to Smeshers (Spacemesh miners) within 941 years, with 94.75% allocated to them and no pre-mining. Currently, the price of SMH is $2.61.
Conflux
Features: Chinese concept public chain
Consensus Mechanism: POW+POS
Conflux is a public, permissionless first-layer blockchain designed to build a borderless cryptocurrency project transaction and technology ecosystem covering the world. As the only compliant, open, and public blockchain in China, Conflux plays an important role in China's Web3 attitude shift.
Conflux's main advantage lies in its unique hybrid consensus mechanism, combining PoW and PoS. This mechanism fully leverages the strengths of both: the PoW mechanism confirms transactions and protects network security through computational competition, while the PoS mechanism selects block-producing nodes based on token holders' stakes, increasing transaction throughput and resource utilization. This hybrid consensus mechanism brings Conflux high scalability and security, effectively addressing the challenges faced by traditional blockchains.
Conflux's token (CFX) is the native token of the Conflux network. CFX tokens were listed on exchanges in November 2020, experiencing significant price fluctuations. Despite some volatility, the value of CFX has gradually risen through collaborations with well-known brands and partners, as well as China's changing attitude towards the cryptocurrency industry. Over the past year, CFX has increased by over 500%, with the current token price at $0.1747.
Bittensor
Features: Crypto+AI concept project
Consensus Mechanism: POW+POS
Bittensor is an artificial intelligence project based on blockchain technology, aiming to drive innovation and sharing in artificial intelligence technology. The project incentivizes contributors by rewarding their efforts in the form of TAO tokens. TAO is the native currency and core of the Bittensor project. TAO tokens serve as rewards for mining contributions and as access tokens, unlocking the immense potential of collective intelligence within the system.
Bittensor adopts a hybrid consensus mechanism, combining Proof of Work (PoW) and Proof of Stake (PoS). In Bittensor, PoW is combined with artificial intelligence for mining and computing AI models, forming a decentralized large-scale model network. Miners host AI models in Bittensor and provide them to the network. Validators rank miners based on their "intelligence contributions." Whenever the network generates a block, 1 TAO reward is produced, distributed evenly to miners and validators through mining and validation.
Currently, the price of TAO tokens is $321.72, doubling in the past month. Unlike traditional L1 models that derive value from selling block space, the value of TAO is linked to the AI services it supports. As these AI services become more influential and practical, the demand for TAO tokens will also increase.
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