Hedera Hashgraph ICO Overview

Hashgraph is a data structure and consensus algorithm that is fast, secure, and fair, created by the boffins at Swirlds. Swirlds is a software platform designed to build fully-distributed applications that harness the power of the cloud without servers. They say that users can develop applications with fairness in decision making, speed, trust, and reliability, at a fraction of the cost of traditional server-based platforms. Hashgraph is not a blockchain but a revolutionary algorithm, mathematically proven to be fast & fair, implemented into current software, not a marketing concept that’s not yet available.
So, how does Hedera Hashgraph compare to blockchain technology? Let’s find out….

Hashgraph uses two unique techniques (1) Gossip about Gossip and (2) Virtual Voting to achieve fast, secure, and fair consensus.
Gossip is a computer science term which can be defined as calling any random node and telling that specific node everything that you know. In distributed ledgers, the “baseline” or minimum bandwidth required is that the transactions go to every node. A gossip protocol can achieve this transfer of information exponentially fast. Gossip about Gossip refers to attaching a small additional amount of information to this Gossip/transaction payload, which are two hashes containing the last two people talked to (hence, gossiping about the information gossiped). Using this information, a Hashgraph can be built and constantly updated as more information is gossiped by each node.
Once the Hashgraph is built, it is extremely easy to know what a node would vote, because we know what each node knows, and when they knew it. This can now be used as an input to a voting algorithm and know which transactions have reached consensus quickly.
The result of using this method is that Hashgraph gets the benefit of a 30-year-old voting algorithm which has strong math proofs of being asynchronous Byzantine fault tolerant. What the hell does that mean?! This means that they know when consensus will be achieved, have a guarantee that they WILL reach consensus, speed (due to use of a gossip protocol) and fair ordering and time stamping on every event. Taken from the FAQ on Hashgraph:

representation of hashgraph


Hashgraph Gossip Protocol

Hashgraph is very fast and has a low consensus latency which enables a new range of use cases and applications. There is no use of miners which is why it can generate 100’s of thousands of transactions per second, rather than blockchain which can process only an estimated 3.3/7 blocks per second. The blockchain is slow by design to allow miners to come to an agreement on which block to put into the network and as a result, it can only process a low amount of transactions per second. Plus the person who wins the transaction can influence the order of transactions making it not fair, unlike Hashgraph.
Hashgraph serializes all transactions with cryptographic timestamping, unlike in a blockchain where miners determine the order in which transactions are placed within each block. In certain cases, the transaction order is important, EG. two different people purchasing shares in a stock where the first order to go through will likely get a cheaper price. Hashgraph orders transactions according to the timestamp of when the population of nodes received them — thereby ensuring they are recorded fairly.