What comes after blockchains?
This question is floating around the discussions of many crypto communities, the minds of the existing and new investors and the eyes of other external watchers of the field. One common answer you are likely to find is HASHGRAPH, a patented algorithm poised to substitute blockchain technologies in the future. We offer a detailed article on the details, components, pros, and cons of a hashgraph below.
Table of Contents
What is a Hashgraph?
A Hashgraph is a new private and permissioned protocol system that uses consensus mechanism to increase the number of transactions. The algorithm is based on a form of Byzantine-Fault Tolerant (BFT) consensus, known as asynchronous Byzantine-Fault Tolerance (aBFT). Hashgraph are heavily tipped to rival blockchains as they offer fast transaction speeds and scalability, a quality most blockchains lack at the moment.
Leemon Baird Image: Shutterstock
Hashgraph technology has been patented by the Swirlds Corporation as intellectual property. The company was founded by Leemon Baird, the creator of Hashgraph algorithms. Despite the private and permissioned nature of a hashgraph, there exists a public hashgraph too, Hedera Hashgraph.
Hedera public hashgraph
The Hedera public hashgraph is the first of its kind in the industry. The project is the closest a hashgraph has come to be opened to the public albeit costly to Hedera. The company will relinquish 10% of their revenue to Swirlds in order to get the license to publicize the hashgraph.
Hedera Hashgraph phrase (Image: Hedera)
The Hedera Hashgraph Platform provides a new form of distributed consensus; a way for people who don’t know or trust each other to securely collaborate and transact online without the need for a trusted intermediary.
Furthermore, Hedera will not be able to serve the high speeds offered by private hashgraph algorithms as they are permissionless. However, the platform will still be able to offer higher transaction speeds than some of the blockchains present. In conclusion, public hashgraph use the proof of stake mechanisms to govern the platform. The Hedera Hashgraph Council will be the governing body of the platform. The 39 council members from different organizations and business fields will take care of the platform as a whole discouraging monopoly of any kind from the community.
How does a Hashgraph work?
The hashgraph algorithm generally works in two ways; the gossip about gossip technique and the virtual voting technique. Remember, these techniques work in a private and permissioned environment where the nodes are known and assigned to specific persons.
We highlight further the two techniques below.
Gossip about Gossip protocol
The platform has nodes that communicate with each other randomly. Each node manages a directed acyclic graph (DAG) data structure called a Hashgraph. Actions taking place on a Hashgraph are labeled “events”, which includes transactions, timestamp, signature from the node that first received the event and the origin of the transaction. The gossip about gossip technique entails the nodes sharing “events” among each other randomly and checking for new transaction details from the incoming gossip.
“Nodes constantly gossip with each other by randomly selecting a peer and sending every event that the peer does not know of, in topological order.”- Hashgraph whitepaper, 2016
Let’s say Al, Bee, Coo, Dav, and Edd each represented a node. They all receive information that should be “gossip” to the other members but in a random fashion. Al receives transaction information, calls and shares the information with a random node, let’s say Dav. Now Dav, calls and shares their information (+ Al’s information) with a random node, Bee. This continues between the members till all members get the “gossip”.
Illustration of the gossip protocol
Since the nodes only pass new information and the rapid convergence nature of the gossip about gossip protocol, the speed on the protocol is extremely fast.
2Virtual voting on hashgraph
Virtual voting can be explained using the illustration above. The gossip about gossip protocol ensures all the participants (nodes) have a copy of the hashgraph. This enables Dav to calculate what vote Bee would have sent him if they had been running a traditional Byzantine agreement protocol that involved sending votes. So Bee doesn’t need to actually hear the vote. Every member can reach Byzantine agreement on any number of decisions, without a single vote ever being sent. The hashgraph alone is sufficient. So zero bandwidth is used, beyond simply gossiping the hashgraph.
Advantages of a Hashgraph
As explained at the start of the article, hashgraph algorithm is set to overtake blockchain technology in the near future with the scalable platforms and fast transactions speeds that the latter lacks. Such qualities are advantageous to a developing technological system.
- Fast: The hashgraph algorithm is fast due to the gossip about gossip protocol mechanism that ensures fast sharing between the nodes. Notwithstanding, the protocol is also private and permissioned at the moment which makes it that first. Unlike the permissionless protocols such as Bitcoin and Ethereum where a node is allowed to enter or leave the network at will, hashgraph permissioned nodes are known prior. This allows the consensus to be reached faster as opposed to the permissionless systems.
- Fairness: The hashgraph algorithm uses a consensus timestamp to ensure that the first transaction to reach two-thirds of the vote will be considered the first. There is a possibility of a hacker to stop the communication between the nodes by withholding their information. This issue may arise in the case of public distributed ledgers as a node chooses its successors uniformly at random, which may belong to ethical or malicious hackers. In the current case though, private nodes are monitored constantly and trusted as they are chosen beforehand.
Cons of a Hashgraph
- Despite the fast, fair and secure system, the hashgraph is not decentralized as much as blockchain technologies. The protocol centralizes the power on the selected nodes which makes the effect of susceptible attacks more severe.
The current hashgraph algorithm is fast only when private and permissioned. Public ad permission less hashgraph algorithm will process transactions slower than the private and permissioned.
Want to know more about it, join us on our Discord and Telegram channels and get into the discussion, or join our 8000 member community on our ICO DOG Investment Platform: