What is hashgraph technology
Hashgraph is a distributed ledger technology developed in 2016 by Leemon Baird, co-founder, and CTO of Swirlds Corporation. Similar to the blockchain, only better.
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What is Hashgraph?
According to one Reddit user, Hashgraph is a superior consensus mechanism or alternative data structure of the Blockchain. It can also be called a decentralized platform without a server.
Therefore, the principle of decentralization is one thing that unites the Blockchain and the new platform.
Hashgraph uses a slightly different approach from consensus because it implements a gossip protocol that works in the following way:
- Each node of the system distributes marked information (this is called an event) about current and previous transactions to random neighbors.
- The neighbor (the node closest to the current transaction) processes the information they receive and sends it to another node.
- The process continues until all nodes have new information.
The whole process that occurs in this network does not take much time. This is because the size of gossip is only about one or two bits. So the transaction processing speed can run very short, around 250,000 TPS (Transaction Per Second).
In comparison, Bitcoin makes 5 transactions per second, depending on bandwidth. Meanwhile, Ethereum allows around 15 transactions per second. Leemon Baird uses Byzantine fault tolerance, which means the transaction becomes valid when more than 2/3 of the node is aware of the transaction.
However, Hashgraph is only used in permitted personal settings. If anyone can join Bitcoin, Ethereum, and other major public Blockchain as nodes, then at Hashgraph, each node must have been approved by the network administrator.
How does Hashgraph work?
The Hashgraph algorithm operates through two techniques
1. Gossip About Gossip
To understand how it works Gossip about Gossip imagine five members: A, B, C, D, and E. Then each member starts with a transaction that results in an event. Then, each member calls out another randomly chosen member and both share their transaction history.
Let say D call B and share the history of transaction D with B. This type of call occurs repeatedly, with each member randomly calling another member and sharing his transaction history.
So, B now randomly chooses another member let say C, and shares his transaction history, which includes transaction history D. Simultaneously, E might have called A, and so on. Each call generates an event, and each event holds the hash of all previous blocks.
2. Virtual Voting
Virtual Voting’s goal is to reach a consensus on the order of transactions. How it works is follows
- The event is divided into several rounds. The Hashgraph algorithm has a definite mathematical answer when the round is made. Simply put, let’s say that one round has about ten events.
- Now, each member votes to determine which events must qualify as “witnesses”. imagine that each member with an event in the next round looks at each event in the previous round.
- If he can trace his line back to an event, he chooses “Yes” for that event, and if not, he chooses “No”. The round of events with the most votes was decided as a “witness” for the current round.
Difference Blockchain Vs Hashgraph
Hashgraph is an algorithm patent that promises more efficient instead of Blockchain (decentralization, distribution, and security through the use of hashing), without the lack of low transaction speeds.
The following are the main differences between Hashgrap vs blockchain.
- Use proof of ownership mechanisms and proof of work to reach consensus.
- Relatively slow speed.
- Data is stored in the ledger at the node directly involved in the consensus.
- It can be used to mine cryptocurrencies.
- This platform utilizes a new type of consensus mechanism, based on gossip about gossip and Virtual Voting.
- Transaction speed process faster.
- Data is stored on all computers on the network, which makes it impossible to be hacked.
- No mining will be used, nodes will process transactions automatically with gossip of around 1-2 bits.
Proof of Work (PoW) is an algorithm that is an economic measure to prevent denial of service attacks and abuse of services such as spam on the network. Proof of Work algorithm to solves computationally intensive puzzles to validate transactions and create new blocks.
However, POW or Proof of Work algorithm has its drawbacks, namely performance mining miners which take electricity costs and need time to wait for the propagation time of the blockchain.
Even the electricity costs that miners have to pay all over the world are almost the same as the price of a New Zealand country. Not only that, but the Proof of Work (PoW) Algorithm also has transaction properties that are run in one direction (synchronous).
Ethererum also using this algorithm. But Vitalik Buterin (boss ETH) expressed his intention to move to POW. The roadmap and migration plan has begun since the Casper algorithm was introduced.
The Proof of Stake (PoS) algorithm is a type of algorithm used by the cryptocurrency blockchain network to achieve distributed consensus.
Unlike the Cryptocurrency Proof of Work algorithm that uses mining. Proof of Stake (PoS) algorithm is more efficient. Because it uses electricity costs from all miners.
In addition, with this Proof of Stake algorithm. Owners’ coin has the authority to save the coin themselves. And the more coins they have, the greater the reward. This is because the nature of the Proof of Stake (PoS) Algorithm makes the coin held by the system.
To get coins, you don’t have to do mining, just use a graphics card, then you have locked the coin. So, you don’t need to invest to buy a computer, but you only have to have coins by saving it.
Call it a master node example in coin Dash. Enough to become a master node, which requires you to save a large number of coins, you get the portion of the transaction without mining. But Dash is practically a hybrid Pow and Post (because it still uses the Cryptonight algorithm)
This Voting Algorithm is the focus of Hashgraph where each node of their network has a different code and each code can speak and make decisions to make a transaction.
So this algorithm is very decentralized. Unlike the Proof of Work (POW) Algorithm, transactions with the Voting Algorithm are done in many directions. Which is also very different from the POW algorithm that uses one direction (synchronize).
The voting algorithm also has a weakness, which is consuming very large bandwidth (because each node is talking to each other). Voting algorithms are good in theory because they are fast, safe, and almost impossible practically. But Hashgraph sees this potential, so they want to make data structure Voting without large bandwidth losses.
How do you do it? The answer is to use Gossip Protocol with this protocol, each node in the Hashgraph network takes the code and distributes it randomly on the network. In the end, because everything randomly moves the code will spread across all nodes in the entire network.
The code will then record the code who spread it, when, and what is the content of the message. This Gossip Protocol ensures that something is fair and in accordance with the order. Because the Voting Algorithm for POW and POS systems was unfair because miners could change the order of the transaction.
Gossip The protocol claims that they have a power of 250,000 transactions per second, so it’s very fast. Not only that, but this technology has also even been patented based on SDK requests from the company that owns the patent.
However, it is likely that this Gossip Protocol will be made more closed, unlike blockchain and bitcoin, and the application is not open. Hashgraph will only depend on the industry and major cooperatives.
Hashgraph is an innovative technology in crypto-space. But unfortunately, it is not open, and not everyone can experiment with the algorithm.
Bitcoin and Ethereum have been around for a long time, and their reputation has been tested several times. Meanwhile, Hashgraph has not seen real-world resilience.
As a revolutionary technology in several aspects, Hashgraph is an efficient consensus protocol and can help users to enjoy the security and speed of transaction processing.
But when we talk about public usage, there is a possibility that Hashgraph will face the same problem as the various public Blockchain networks that exist.
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