Cryptocurrency News

proof of work is a feature, not a flaw


When taking its blockchain public, “there was an adjustment period where we had to learn to love crypto,” Kadena founder and CEO Stuart Popejoy said. The admission sounded more like a technical adjustment than a surge of emotion on his lips, but he added, “The people who participate in your ecosystem really are your network and that is obviously not a very enterprise-y thing, that’s very grassroots.” 

The merits of private blockchains remain a matter of debate, but Kadena transitioned from a private JPMorgan blockchain in 2016 to a public spinoff in 2020, taking Popejoy, former a JPMorgan executive, with it.

“There was some innovation in private blockchain for a second, and that kind of represents us.” However, “there was this idea that we needed something […] that could serve business-scale needs, and that’s how we arrived at our version of a public blockchain,” Popejoy said in an interview with Cointelegraph, adding:

“This stuff is never going to take off if it can’t handle industrial loads.”

Kadena has horizontal scaling as a feature. “We focused on safe smart contracts and scalability as a safety thing, in the sense of risk management, like if you have to wait a day for your Bitcoin transaction go through,” when the system is backed up, Popejoy said.

Popejoy mentioned Bitcoin frequently. He said:

“We were very thrilled by the fundamental design of Bitcoin.”

“We believe that the real problem with proof of work is not that it uses energy, it’s that it uses energy inefficiently,” he added. “Bitcoin: there’s all this energy being used and it’s not improving the system. It’s the same slow system it was 15 years ago.”

Related: The blockchain trilemma: Can it ever be tackled?

Like Bitcoin, Kadena uses a proof-of-work consensus mechanism, “but it scales it so that we actually have horizontal scaling for proof of work,” Popejoy said. “We like to say, and it’s true, because I know how this stuff actually works, we could settle the entire U.S. stock market today, daily, on Kadena.”

Not everyone sees that speed as a benefit, but Popejoy pointed out that clawbacks can be programmed into smart contracts and security tokens.

Kadena currently has 20 chains running in parallel, but more chains would use the same amount of energy.

The real issue with proof of work is the distribution of money. “Proof of stake produces money and then it uses ownership of money to determine who runs the system,” Popejoy said. Proof of work “is the fairest distribution for getting coins into people’s hands.”