Celestia: Beginner’s Guide

Celestia is quickly gaining attention as one of the most talked-about blockchains in the cryptocurrency space. In this guide, we'll cover all the key details you need to know about Celestia, highlighting its advantages and disadvantages when compared to Ethereum.

What is Celestia?

Celestia is a modular blockchain designed to focus solely on the consensus layer, setting it apart from traditional blockchains like Ethereum, which handle both consensus and execution layers. This modular approach enhances efficiency and speeds up transactions by separating these functions.

A key feature of Celestia is its focus on data availability (DA), utilizing data availability sampling for faster transaction processing. Additionally, it supports execution-focused blockchains by providing a high-throughput DA network. This makes it easier for Rollups and Layer 2 solutions to publish and access transaction data.

By modularizing the blockchain stack, Celestia allows anyone to launch their own blockchain without needing to manage a validator set, making the process much more accessible and scalable.

What is data availability and why does it matter?

Data availability is a key concept in blockchain technology that addresses whether the data for a blockchain has been properly published. This is crucial for the security of the blockchain, as it ensures that anyone can access and verify the transaction history. On traditional blockchains, users typically need to download all the data to verify it. However, as block sizes grow, this becomes impractical for most users.

Celestia approaches this challenge by using data availability sampling, allowing users to verify large blocks without downloading the entire dataset. Instead of requiring every node to store the full blockchain history, nodes in Celestia verify random samples of transactions. This method speeds up transaction processing but has been criticized by some for potentially compromising security.

By solving the issue of data availability with sampling, Celestia ensures that even as block sizes increase, the blockchain remains verifiable and scalable without the heavy data burden on individual users.

The Story of Celestia

Celestia was co-founded by Mustafa Al-Bassam, who gained early notoriety as a member of the hacker group LulzSec during his teenage years. While pursuing his Ph.D. at the University of London in 2019, Al-Bassam published a groundbreaking paper titled LazyLedger, which became the foundation for the modular blockchain architecture that would later evolve into Celestia.

To bring his vision to life, Al-Bassam partnered with two co-founders: Ismail Khoffi, who had significant experience developing in the Cosmos ecosystem, and John Adler, who had worked as an Applied Researcher and Development Engineer at ConsenSys.

Celestia officially launched its mainnet in October 2023, along with the release of $300 million worth of its native token, TIA.

Celestia's Collaboration with Polygon

In 2023, Polygon integrated Celestia into its Chain Development Kit (CDK), a widely-used tool for building Layer 2 blockchain applications. This collaboration is a testament to the credibility and growing adoption of Celestia's modular blockchain design by key players in the cryptocurrency industry.

Celestia’s Consensus Mechanism

Celestia operates as a proof of stake (PoS) blockchain. Users can earn rewards by staking their TIA tokens, contributing to the validation of transactions and the overall security of the network.

What is the TIA Token?

The TIA token is the main cryptocurrency used on the Celestia blockchain. It’s primarily used to pay for transaction fees and allows holders to have a say in the decision-making process for the network. When it first launched, there were 1 billion TIA tokens created, and 7% of them were given to early users through an airdrop.

The TIA token is inflationary, meaning more tokens are added over time, starting with an increase of about 8% per year. However, this inflation rate is expected to go down gradually over time.

Pros and Cons of Celestia

Pros

Speed and Scalability: Celestia’s focus on data availability gives it the potential to offer faster transactions and better scalability compared to traditional blockchains.
Growth Potential: With a lower market cap than Ethereum, Celestia has significant room for growth in the cryptocurrency space.
Strong Partnerships: Celestia has secured partnerships with well-known players in the blockchain industry, including StarkWare and Polygon, boosting its credibility.

Cons

Security Concerns: Some critics argue that modular blockchains, like Celestia, may sacrifice security in favor of speed and scalability.
Rising Competition: Other modular blockchains, such as Avail, are emerging as competitors, which could impact Celestia’s growth.
Higher Risk: As a newer blockchain, Celestia carries more risk compared to well-established blockchains like Ethereum.