Discover the next hot track after BTC inscriptions: POW Coins

Original article by Daniel Li, CoinVoice

In 2023, one of the most high-profile projects is undoubtedly BTC inscription. BTC inscriptions, as a new force, have become an important driving force for the current market trend. However, while new projects are popping up rapidly, traditional projects are also being revitalized. In recent months, the price of Kaspa (KAS) has skyrocketed, reigniting interest in the “POW coin”.

As a veteran blockchain, Kaspa was launched in 2021 at a critical juncture in the cryptocurrency market’s transition from a bull market to a bear market. Unlike other cryptocurrencies that plunged nearly 90% during the bear market, Kaspa’s token, KSA, showed remarkable resilience during the bear market, soaring against the trend. Over the past year, the price of KSA has increased by more than 800 times, significantly outperforming other cryptocurrencies. As the BTC halving date approaches, it is expected that more miners and funds will pour into the POW coin track.

Rejuvenated POW mechanism

POW is a cryptocurrency based on the Proof of Work consensus mechanism, which requires miners to invest a lot of computing power and electricity consumption to complete the block creation and verification process. This approach has been criticized in the past as a waste of energy, but with the shift from POW to POS in ETH, the skepticism about POW has reached its peak, but POW has not been slowly phased out as expected. Rather, it is the rebirth of Nirvana that gives birth to a new life force, and this phenomenon is also closely related to the necessity of POW.

First of all, the POW mechanism is known for its security and reliability. By consuming a lot of computing power and electricity, the POW mechanism ensures the security of the blockchain network. This power-hungry nature makes the POW mechanism highly secure against malicious attacks and tampering. In the context of various threats and risks faced by the current digital asset market, security has become an important indicator for users and investors, so the security features of the POW mechanism have become one of the important reasons for the rise of new projects.

Second, the POW mechanism has a stable infrastructure. As the earliest consensus mechanism applied to BTC and other projects, the POW mechanism has been widely verified and applied after years of development and testing. This stability allows the POW mechanism to provide opportunities for new projects to learn from and build on mature infrastructure, reducing the risk of development and deployment. In addition, there has always been a consensus in the industry that “POW is seen in a bear market”, because the output of POW coins needs to consume electricity, has objective value support, and is more stable than POS coins.

In addition, fairness and decentralization are another key feature of the POW mechanism. By competing to select the accounting node for the next block, the POW mechanism ensures that participants have a fair chance to be rewarded. This fairness attracts users and developers who care about community consensus and the value of decentralization. Under the current trend of pursuing more fairness, transparency and decentralization in the crypto field, the POW mechanism has once again attracted attention as a decentralized consensus mechanism.

In addition, in addition to its security, stable infrastructure, fairness and decentralization, the combination with emerging technologies has also brought new opportunities and development space. Some new POW projects combine current technology trends, such as artificial intelligence, Internet of Things, and other technologies, and propose innovative application scenarios and solutions, attracting the attention of more developers and users.

The POW mechanism, as a time-tested consensus mechanism, is once again in the spotlight. Compared with POS mechanisms, POW has advantages in terms of security, stability, fairness, and decentralization, which can provide a solid foundation for new projects. By innovating with emerging technologies, POW is driving blockchain towards a more decentralized and secure direction.

The “POW coin” craze could be the key to driving the next bull run

Since ETH shifted from proof-of-work (PoW) to proof-of-stake (PoS) consensus in September 2022, the miner community in the ETH market has diverged. Since giant whales with a large amount of capital monopolize most of the nodes, it is difficult for ordinary players to enter the market, resulting in a large amount of computing power being idle. However, it was at this time that the rise of new POW mining projects represented by Kaspa became the best place for idle computing power in the market. The influx of miners created the myth of Kaspa and also sparked a boom in POW coins.

BTC inscription, as a key force in the last round of market rally, may not be able to play the same role in the upcoming next round of market correction. In particular, the current BRC 20 projects have not yet shown the plate-driven wealth effect of DeFi. The market capitalization of BTC inscription is only $500 million, and the trading liquidity within the ecosystem is quite limited. In contrast, the POW mechanism requires mining rigs, and this natural moat makes POW coins considered to have longer-term value and potential, and investors believe that they have more potential to drive a bull market.

According to market capitalization, most of the current market capitalization of new POW coins is under $100 million, and the highest market capitalization KAS is only about $1.9 billion. Compared to some established POW coins such as BCH and LTC, these new POW miners have more upside. For example, PEPEW, a POW mining coin that combines GPU mining, DASH anonymity, and MEME attributes, has a market cap of only $100,000 and has room to grow 100,000 times compared to DOGE and 5,000 times more than Pepe. It can be said that the current POW mining coin is in a golden age with great potential.

The development of the cryptocurrency circle is like a cycle, and eventually the mainstream consensus mechanism may have to return to the POW mechanism. Whether it is the previous explosion of BTC inscriptions or the recent hot POW mining coins, it proves this, and the market demand for POW mechanism still exists, especially the current new POW mining coins combined with new mining technology, which solves the problem of wasting resources of some traditional POW mining coins, so that POW mining coins can have more long-term and lasting development potential.

Take stock of POW coins worth watching

The explosion of Kaspa started the POW mining boom and attracted a large number of investors to the track, all looking for the myth of the next KAS. Let’s take a look at the POW mining coins that are expected to grow 100-fold in the future.

Kaspa

Features: A new type of POW leading coin

Consensus mechanism: PoW+DAG

Kaspa is an innovative decentralized layer-1 blockchain project that aims to provide high-speed, scalable, and secure blockchain solutions. It uses a proof-of-work mechanism combined with the Phantom GhostDAG protocol to provide users with excellent performance and features.

Unlike traditional proof-of-work chains, Kaspa leverages the Phantom GhostDAG protocol to enhance its performance and scalability. This protocol allows orphaned blocks created at the same time to coexist and order them. This innovation in the directed acyclic graph (blockDAG) structure changes the single-chain model of traditional blockchains, providing higher throughput and scalability. Through the Phantom GhostDAG protocol, Kaspa aims to process one block per second, providing fast transaction confirmations and a highly scalable network.

KAS is the core token of the Kaspa ecosystem, launched in November 2021 with no pre-mining, zero pre-sale, no token allocation, with a maximum supply of 28.7 billion tokens, and its emissions are scheduled to be halved annually by a smooth (1/2)^(1/12) reduction per month. Over the past month, KAS has gained 38.55% and is currently trading at $0.1219.

Spacemesh

Features: The goal is to become the people’s currency, allowing anyone to participate in mining

Consensus Mechanism: Proof of Space-Time

Spacemesh is an emerging project based on blockchain technology that aims to build a highly secure and highly decentralized consensus network. Unlike the traditional Proof of Work (POW) or Proof of Stake (POS) mechanisms, Spacemesh introduces an innovative consensus mechanism called Proof of Space-Time.

In Spacemesh, participants participate in the consensus process by allocating storage space to their computers. They created a local storage space called a Spacemesh node to store and verify the blockchain’s transaction data. The size of the participants’ storage space and the amount of time they spend determining their influence in the network and their chances of choosing the next block. In order to demonstrate their long-term willingness to participate and contribute, participants will need to provide proof of storage space over a period of time. By introducing a time factor, the proof-of-time consensus mechanism can identify and prevent the behavior of malicious attackers and improve the security of the network.

SMH is the native token of Spacemesh, and Spacemesh’s slogan is to become the people’s currency, so SMH has gained a lot of attention as soon as it was issued, soaring from $0.1 at the opening of the trade to a maximum of $11, a maximum increase of more than 100 times. SMH tokens are capped at 2.4 billion and will be issued in 941 years, of which 2.25 billion (94.75%) will be distributed to Smeshers (Spacemesh miners) with no pre-mining. Currently, the SMH price is $2.61.

Conflux

Features: Chinese concept public chain

Consensus mechanism: POW+POS

Conflux is a public, permissionless, layer-1 blockchain that aims to build a borderless ecosystem of cryptocurrency project transactions and technologies that spans the world. As the only compliant, public, and publicly owned blockchain in China, Conflux plays an important role in China’s Web3 attitude change.

The main advantage of Conflux is its unique hybrid consensus mechanism, which combines PoW and PoS. This mechanism makes full use of the advantages of both: the PoW mechanism confirms transactions and protects the security of the network through computing power competition, while the PoS mechanism selects block producers based on the rights and interests of token holders, improving transaction throughput and resource utilization. This hybrid consensus mechanism brings a high degree of scalability and security to Conflux, effectively solving the challenges faced by traditional blockchains.

The Conflux Token (CFX) is the native token of the Conflux network. The CFX token was listed on the exchange in November 2020, and its price fluctuates greatly. Despite experiencing some volatility, the value of CFX has gradually risen through collaborations with well-known brands and partners, as well as a shift in China’s attitude towards the crypto industry. CFX has increased by more than 500% over the past year, and the current token price is $0.1747.

Bittensor

Features: Crypto+AI concept project

Consensus mechanism: POW+POS

Bittensor is an artificial intelligence project based on blockchain technology, which aims to promote the innovation and sharing of artificial intelligence technology. The project incentivizes contributors for their efforts by rewarding them, and rewards are distributed in the form of TAO tokens. TAO is Bittensor’s native currency and the heart of the project. TAO tokens serve both as reward tokens for miners’ contributions and as access tokens, unlocking the enormous potential of collective intelligence within the system.

Bittensor employs a hybrid consensus mechanism that combines Proof-of-Work (PoW) and Proof-of-Stake (PoS). In Bittensor, PoW is combined with artificial intelligence and used to mine and compute AI models, resulting in a decentralized, large-scale model network. Miners host AI models in Bittensor and make them available to the network. Validators rank miners based on their “smart contributions”. Whenever the network generates a block, 1 TAO reward is generated, which is divided equally between miners and validators through mining and validation.

The current price of the TAO token is $321.72, having doubled in the past month. Unlike traditional L1 models, where value is earned by selling block space, the value of TAO is tied to the AI services it supports. As these AI services become more impactful and practical, the demand for TAO tokens will also increase.