Kadena is a next-generation cryptocurrency for high-performance decentralized applications. Kadena offers the first provably secure proof of stake protocol, which guarantees more decentralization and energy efficiency than any other blockchain. It also solves the scalability problems that have plagued Bitcoin and Ethereum by using sharding technology to eliminate block size limits on the blockchain. This article provides a comprehensive review of the Kadena coin.
What Is Kadena?
Kadena was launched in March 2017 as an open-source project created by Satoshi Labs Inc., a company specializing in building state-of-the-art crypto technologies. The main goal of Kadena is to solve problems faced by current cryptocurrencies. To do that, it uses features such as sharding and Proof of Stake to increase network security and transaction speeds, respectively.
These are important because they reduce the need for mining and offer better scalability. In this way, it will make cryptocurrency more available for everyday use and less reliant on large organizations like Google or Amazon with vast computing resources. The team behind Kadena has extensive experience in creating scalable and secure solutions for industry leaders such as VISA, Fidelity, American Express, Nasdaq, etc. They’ve worked extensively with both startups as well as major corporations.
How Does Kadena Work?
Kadena Coin operates under the principle of proof of stake. To put it simply, the network rewards users for holding coins instead of miners since staking is considered a form of validation. So unlike proof of work systems where miners can manipulate transactions, the system makes sure only legitimate parties are included, so there’s no risk of double-spending.
With this mechanism, the network can achieve higher levels of decentralization, which helps avoid single points of failure and ensures greater security. By default, Kadena utilizes 10 shards across 16 nodes. A user is given one vote per token they hold, thereby making the voting process fair. However, when a user wants to participate in voting, he must connect at least two different nodes. Thus, every node is equal, and the chance of being chosen becomes proportional to its number of connections.
Who Created Kadena?
The name “Kadena” means “branching path” in Japanese. Created by Yukiya Sato, whose previous projects include eWallet, ICON, and DAppChain, the whole team hopes to provide the world with a safe, fast, private, and efficient platform for dApps.
What Are the Advantages and Disadvantages of Kadena Coin?
Advantages of Kadena
Unlike Bitcoin and Ethereum, the entire system of Kadena is run without any centralized parties. That allows it to maintain complete decentralization since no central authority controls it. Because the algorithm prevents anyone from manipulating the ledger, even if you try to cheat or hack into the system with malware, it won’t have any effect. Therefore, there is no need for miners to waste electricity and hardware.
The network automatically manages all aspects, including transactions, without human intervention. Since it’s fully autonomous, the system becomes more resistant to cyber-attacks and censorship. And since it’s completely transparent, the public can track how their funds are being used.
2. Instant Payments
Like credit cards and PayPal, the entire network is designed to accept payments instantly. Unlike traditional payment methods, Kadena’s blockchain technology offers immediate settlement and avoids fees. Transactions are completed in milliseconds, and each coin takes only 5 seconds to settle.
This provides a quick turnaround time, allowing merchants to receive money after receiving orders immediately. Moreover, since the blockchain eliminates third-party charges and processes everything directly through smart contracts, the final price provided to customers is always accurate.
3. Safe Network For Businesses & Consumers
The blockchain ensures instant settlements and protects merchants from fraud since it reduces the risk of chargebacks. Thanks to the decentralized nature of the protocol, it also reduces the chances of hacking attacks. Everyone is rewarded with coins that encourage people to protect the network.
This creates a positive feedback loop that will ultimately increase adoption rates. It’s similar to a self-regulating ecosystem like Wikipedia. Also, thanks to the transparency of the blockchain, consumers can see exactly what they’re paying and how much goes towards marketing costs.
They will know whether a product is overpriced and can refuse to pay for something they feel isn’t worth the cost. In addition, since the blockchain guarantees instantaneous transfers, privacy becomes an option. No personal information is revealed except what’s necessary to complete a transaction.
4. High-Security Level
Thanks to the use of zero-knowledge proofs, the network ensures high levels of security against Sybil attacks, Denial of Service, and spamming. And because the block rewards ensure more than enough supply, mining becomes less profitable for hackers.
Zero-knowledge proofs enable a simple yet efficient way to verify identities and keep malicious users out of the network. As long as you adhere to the rules, all transactions go through flawlessly. Since it’ll be hard to manipulate the system manually, cheating has never been easier.
5. Better User Experience
Thanks to the automated consensus mechanism, Kadena coin makes it easier to manage your wallet than other blockchains. There’s no need to download software. Instead, enter the address on the screen and follow the instructions. Once inside, you’re ready to start making purchases and accepting payments.
You don’t need to wait until someone verifies your identity. And since everything’s done automatically, it’s very fast. With the combination of instant transactions and lower setup requirements, the user experience is drastically improved.
6. Reduced Costs
Unlike most cryptocurrencies, the Kadena team doesn’t believe in inflation and wants to make sure people earn their tokens. To achieve this goal, they ensure that every coin on the platform is created equal. This means that miners get equal amounts of new coins when creating blocks.
Another reason why the creators want to make sure the supply remains stable. As a result, the value of a coin is linked to its demand rather than speculation. Since no one person owns them, no one can print money and manipulate the market price. This helps maintain stability throughout the year, unlike volatile blockchains like Bitcoin or Ethereum.
7. Strong Community Support
Thanks to the project’s strong community support, the developers are now actively improving the technology. For example, a feature called “zero-knowledge proof for nonces” was recently added. This allows nodes to generate random numbers without revealing any data about the number itself. A second improvement is expected before the end of 2018.
8. International Adoption
Although Kadena launched first in Japan, the goal is to take it globally. Through partnerships with international institutions, including MIT, the University of Oxford, and Nanyang Technological University, the team hopes to gain acceptance among academic communities worldwide.
The final step will be launching Kadena in Europe, where there’s already a widespread acceptance of cryptocurrency. If successful, Kadena could provide an alternative and secure payment method to traditional banking systems.
9. Future Improvements
Although the current version works well, Kadena expects to continue implementing improvements based on customer feedback. One potential upgrade includes the ability to add custom tokens. Other features may include smart contracts and multi-signature wallets.
10. Legal Issues
Though the project has been legally approved by the Japanese Government and the Financial Services Agency, the team says additional regulations should be implemented because the blockchain space isn’t regulated yet. However, the Kadena team does have plans to work with the government to implement stronger policies sooner rather than later.
While all these changes happen, the team also recognizes that not everyone will agree with certain decisions. That being said, they encourage people to voice opinions instead of attacking each other. An open forum provides a better place to discuss issues than social media platforms.
Disadvantages of Kadena
Because Kadena has only just started developing, it’s still young compared to some other crypto projects. As a result, creating a fully functioning network takes more time.
2. Slow Transaction Speed
Even though the system supports multiple transactions per block, each requires between 1 – 5 seconds to complete. Because of this slow speed, the development team hasn’t focused much attention on scaling issues. It’s possible that they won’t develop any solutions until the launch of the mainnet.
3. No User Interface
Currently, the only way to access Kadena is via a command-line interface. Although convenient, few people use it regularly. This makes it difficult to integrate into everyday life.
4. Lacks Inherent Use Case
Due to its novelty status, people aren’t sure whether the service is useful or worth their money. Unless there’s an obvious use case, such as paying bills, most consumers don’t see how Kadena can make their lives easier.
5. Limited Accessibility
Due to poor internet coverage, some people find it hard to connect to peer nodes. On top of that, many nodes require high computational power, which limits accessibility even further. The number of active nodes continues to drop despite Kadena trying to increase access by supporting various wireless devices. Most users would love to use it but aren’t convinced by the idea of joining a new community.
6. High Electricity Costs
A single node costs about USD 80/month. Depending on your country, electricity costs are usually higher than that amount. In addition, it’s not uncommon for the cost of coins and fees to exceed monthly electricity costs.
7. Poor Infrastructure
Despite recent updates, the infrastructure remains weak today. Like Bitcoin and Ethereum, many popular cryptocurrencies were built with global networks in mind. However, Kadena was originally created for a local market. Therefore, it lacks basic tools to support global adoption. For example, there is currently no wallet capable of receiving and sending payments to other countries.
All in all, Kadena seems like a great idea at first glance. With the introduction of new features and partnerships, the project could improve significantly over time. At the moment, however, the platform suffers from quite a few drawbacks. If you live in Japan, Kadena seems like the perfect choice. Otherwise, there are too many obstacles to overcome before you can enjoy using it every day.