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“We can agree about the things that we are communicating about at scale and that’s a aevolution. [Hashgraph] is the biggest revolution since the web.” –Demetri Kofinas
Hashgraph is a data structure and consensus algorithm that entails virtual voting and gossip protocol. While Bitcoin and Ethereum have truly disrupted the financial and software industry, Hashgraph aims to improve upon the existing benefits offered by blockchain technology in an attempt to solve scaling issues.
Hashgraph claims to have multiple advantages over blockchain:
- Fast: 250,000+ Transactions Per Second
- Fair: Mathematically-Proven Fairness (via Consensus Time Stamping)
- Secure: Bank-Grade Security (Asynchronous Byzantine Fault Tolerant)
The purpose of Hashgraph is to achieve a global consensus in a decentralised system. This is achieved through a so-called gossip protocol. Gossip protocol results is a spread of information (see image below). Each time an event takes place, a computer tells another computer about that event. It also includes the information of the time it heard it and who it heard it from and the time they heard it and who they heard it from, and so on and so on.
By using a virtual voting algorithm to achieve consensus, Hashgraph results in speedy, secure and fair transactions. On the blockchain the order of transactions are not guaranteed in Proof of Work (PoW) or Proof of Stake (PoS). This means miners can alter the order of transactions. However, Hashgraph is fair because it serializes all transactions with cryptographic time stamping, meaning each transaction is approved in the order it was received.
For example, Bitcoin can only produce around 7 transactions per second on its blockchain. While Hashgraph can produce 250,000 transactions in that same time period. The ability to handle large numbers of transactions is a result of virtual voting, which allows each node to know exactly how other nodes would vote, eliminating the lengthy process traditional voting entials.
Additionally, Hashgraph eliminates the need for computation. This in turn reduces the massive energy consumption used in the computations for cryptocurrencies like Bitcoin.
Though a very promising technology that could disrupt blockchain, a big downside of Hashgraph is that it is a patented software. Therefore, you have to request a software development kit (SDK), typically used for closed source software in order to implement this technology. Hashgraph’s licensing is as follows, “The Software is provided to Licensee at no cost. However, Swirlds reserves the right to charge fees in connection with the sale, license or other distribution of any future version of the Software or any other computer software developed, sold, licensed or otherwise distributed by Swirlds.” Additionally, all licensing requests are handled on a case by case basis, further delaying the process.
The nature of cryptocurrency and blockchain is open source and decentralised, which is why we at Blockbasis believe that Hashgraph will not take over blockchain. New technology and protocol layers to existing blockchains experiencing scaling issues will be added, such as Lightning Network for Bitcoin and Raiden Network for Ethereum. Although, we do believe that large corporations and/or banks will be the primary customers of Hashgraph in the future.
We cherish the ability of individuals to maintain power and control, and we believe the open-source approach that blockchain has to offer is in the best interest of society. It is a massive missed opportunity for Hashgraph and the team behind to patent their technology. We really wish to see Swirlds embrace a more open approach, for their own interest as well as the community. If they do, blockchain could take a massive turn, if they don’t, we fear Hashgraph will be a neglected technology due to its closed-source approach.