When Kadena made the decision to make its blockchain public, CEO Stuart Popejoy admitted that there was a period of adjustment where they had to embrace cryptocurrency. While this may seem like a technical adjustment, Popejoy emphasized that the people who participate in the ecosystem are what make up the network, and this grassroots aspect is important.
The debate about the merits of private blockchains continues, but Kadena made the transition from a private JPMorgan blockchain to a public spinoff in 2020, with Popejoy, a former JPMorgan executive, leading the way. Popejoy explained that there was some innovation happening in private blockchains for a while, and that represented Kadena. However, they realized that they needed something that could meet the needs of businesses on a larger scale, which led them to develop their own version of a public blockchain.
One of the key features of Kadena’s blockchain is horizontal scaling. They focused on creating safe smart contracts and scalability as a way to manage risk. Popejoy gave the example of Bitcoin transactions taking a long time to process when the system is congested, and Kadena’s goal was to address this issue.
Popejoy frequently mentioned Bitcoin and highlighted the inefficiency of its proof-of-work consensus mechanism. He explained that the problem is not the energy consumption itself, but rather the inefficient use of energy. According to him, Bitcoin has not improved over the past decade despite the high energy consumption.
Similar to Bitcoin, Kadena also uses a proof-of-work consensus mechanism, but they have scaled it horizontally. Popejoy claimed that Kadena could settle the entire U.S. stock market on their blockchain in a day. While not everyone sees the speed of transactions as a benefit, Popejoy pointed out that smart contracts and security tokens can be programmed to include clawbacks, adding another layer of security.
Currently, Kadena operates with 20 chains running in parallel, but increasing the number of chains would not significantly increase the energy consumption. Popejoy emphasized that the real issue with proof-of-work is the distribution of money. He argued that proof-of-stake mechanisms generate money and then distribute it based on ownership, whereas proof-of-work is a fairer distribution method.
In conclusion, Kadena’s journey from a private to a public blockchain showcases their commitment to innovation and addressing the needs of businesses. They have focused on scalability and safety while utilizing a proof-of-work consensus mechanism that is more energy-efficient and provides a fairer distribution of coins.