Hashgraph—the new, better blockchain?
Ever since the birth of Bitcoin, the blockchain technology has seen hundreds, thousands of developments with new platforms claiming to provide something better. In that sense, why would it be surprising if something new was to replace blockchain entirely before everyone could adapt to it?
The crypto enthusiasts would be aware of the new distributed consensus platform, Hashgraph, which has been circling the news.
What is Hashgraph?
The Hashgraph is a new data structure and consensus algorithm that provides a fresh distributed consensus platform. The goal of the algorithm is to allow a user community to come to an agreement for the order of transactions when there is no trust between the users.
Hashgraph offers a new approach to upgrade the current systems of distributed ledger technology (DLT). Essentially, it is an algorithm that is faster, more secure, and fairer than the blockchain.
The platform envisions to build an open, fair, and fast decentralised public ledger. The team claims to work at solving the five problems of the present DLT i.e. performance, security, governance, stability, and regulatory compliance.
How does Hashgraph work?
The Hashgraph platform employs two special techniques to achieve fairer, faster, and more secure consensus.
- Gossip about Gossip: includes attaching some additional information to a pair of hashes containing the last two people talked to. Through this, a Hashgraph can be built and updated every time some additional information gossips on each node.
- Virtual Voting: once a Hashgraph is ready, all members are aware of the information each node has and exactly when they were made aware of it. This makes it easy, and pretty straightforward, to know how a node would vote. This data can be used as an input to the voting algorithm and filter the transactions that have reached quick consensus.
Here is how to understand this. If you have understood Blockchain as a chain of blocks, existing chronologically one after another, Hashgraph should be understood as multiple avenues that are connected by gossip. Gossip is when one computer randomly tells two computers about a transaction it makes. Those two computers then tell four other computers (i.e. they gossip about the gossip) and this continues till all the computers in the network are made aware of a transaction.
How does Hashgraph aim at solving the current DLT problems?
The platform is being defined as lightning fast, secure, fair, and without any requirement of proof-of-work.
- PERFORMANCE: The platform stands on the virtual voting consensus algorithm which provides near-perfect efficiency in terms of bandwidth usage. It can potentially handle hundreds of thousands of transactions per second and verify more than one million signatures in a second.
- SECURITY: Hashgraph has been built on asynchronous Byzantine Fault Tolerance (aBFT) which means it is at the highest level of security. Being the only platform to formally prove this quality, Hashgraph has touched a fundamental advance in distributed systems.
- FAIRNESS: The platform ensures that the consensus order of transactions is an unaltered reflection of the transaction order received by the community. Hashgraph works hard to ensure no user break the flow of transactions and/or unduly influence the consensus order of the transaction.
Features of Hashgraph
- Speed: The Hashgraph’s transaction speed is only restricted by the bandwidth of all the nodes. If each node can download, for instance, 5000 transactions per second, that will be the number of transactions the system will be capable of handling by the second. Such a speed can potentially perform transactions for the entire Visa Card network.
- Trust: The platform does not allow anyone node to manipulate the transactions which is why it is a fair network. Unlike a blockchain, a miner in Hashgraph has to include all the transactions in the order in which they were received.
- Verifiable: Transactions in Hashgraph can be verified since the transaction consensus takes only a couple of minutes to reach the entire network.
- Byzantine: The Hashgraph platform guarantees a Byzantine agreement that is no single user or a group of users can stop the community from reaching a consensus.
- ACID Compliance: Each local database of the Hashgraph platform is Atomic, Consistent, Isolated, and Durable. And therefore the whole community has a distributed but single database with similar properties.
- Cheap and Efficient: No block is ever discarded in Hashgraph which makes it efficient. And since no proof of work/stake is required, the platform is cheap.
- Timestamped: Every transaction is time-stamped and digitally signed by the creator, therefore, making it authentic and safe.
The Hashgraph Token
The platform will use a native cryptocurrency whose function will be to grant token holders access to the distributed applications on the platform. The token can also be staked and used to run a node. This will help in providing network security within the public ledger.
How is it different from Blockchain?
As their whitepaper states, a blockchain is like a tree that is continuously pruned as it grows—this pruning is necessary to keep the branches from growing out of control. In Hashgraph, rather than pruning new growth, it is woven back into the body.
Both the platforms allow any and every member to create a transaction which is eventually put into a container and spreads throughout the community. In blockchain, these containers are anticipated to form a single, long chain. If two blocks are created by two different miners simultaneously, the community will choose one and discard the other.
In Hashgraph, however, every container is utilised and not even a single one is discarded. All branches continue to exist and eventually grow back into the single whole.
This feature makes Hashgraph more efficient than Blockchain.
Another important distinction is that Hashgraph works without any requirement of PoW and can potentially deliver a cost-efficient, high-performance level without a single point of failure.
Additionally, Hashgraph also allows a fairer system of operations as it allows its miners to choose the order of transactions in a block. The transactions can also be delayed or stopped altogether. The platform employes time stamping and digital signature to prevent anyone from changing the consensus order of transaction.
The Bottom Line
Hashgraph sure is another great technology like the Blockchain and looks promising. A successful implementation of the technology can solve the problems of the current DLT and set new records in the cryptocurrency world. However, till now, it has only been deployed in the private, permission-based network. The performance of Hashgraph in the public network is yet to be monitored.
Also, the fact that Hashgraph does not keep a record of the details of transactions, as Blockchain does, might be a deal breaker for some people.
Like any technology which looks promising when it offers something new, and goes through phases of limitations and developments, Hashgraph also has to make it through all the stages before its true potential can be analysed.