Hashgraph technology is a superior consensus protocol with a unique distributed data structure. It may be a much better alternative to current blockchain technology. The project is still under development and there is no public blockchain available yet. There is also no crypto token or asset available. Nevertheless, it is interesting to follow the development of this technology.
What is the importance of the Hashgraph Technology?
Hashgraph distributed ledger technology, this is a new cryptographic technology for realizing distributed networks for payments, cryptocurrency and smart contracts. This is done through the implementation of two different algorithms, the new Gossip over Gossip Protocol in combination with a classic Voting protocol. It is a special alternative for chaining transaction blocks to a blockchain.
It is a new superior technology for realizing a distributed database system or general ledger. In English this is also called Distributed Ledger Technology. The Hashgraph DLT technology can replace the current blocking DLT technology in the near future. Nevertheless, the inventor of this technology, Leemon Baird sees this not happening so quickly because of the network effects of especially the Bitcoin network.
The Hashgraph technology will probably first be complementary and will be used primarily for IoT applications. It will probably replace Ethereum and other smart contract platforms before it could replace the Bitcoin as digital gold. All this is still very speculative. Although the Hashgraph already works as technology, it is still under development and it will take years before it can actually put the world economy on a foundation of this TLD technology.
Indeed, these are the ambitions. The blockchain technology of the Bitcoin is not capable of serving the whole world economy, the question is whether this goes with the Lightning network. The Hashgraph would in this case compete with Bitcoin’s Ligthning network. In the video below we can see the inventor, Leemon Baird, of the Hashgrap protcol himself in an interview with Demitri Kofinas:
Background information about the Hashgraph technology.
The technological breakthrough of Bitcoin is based on the implementation of the Proof-of-Work algorithm and the Nakamoto Consensus Protocol. This creates an uncrackable distributed network where everyone can reach a consensus on the true state of the blockchain.
Yet, what most people do not realize is that the Byzantine General problem is not really completely solved. It is more common for two different blocks to be simultaneously mined, creating a temporary fork or split, whereby the network will automatically determine which block chain is the right one.
Then, among other things, the longest chain with the most computing power is looked at. This risk is also one of the reasons why the blocks follow each other rather slowly and have fairly long confirmation times.
This makes the Bitcoin block chain indeed very safe and reliable, but slower and also expensive to maintain. It requires a huge infrastructure and electricity to keep the Bitcoin network in place for more and more users.
The hashgraph consensus algorithm is radically different, it is not a transaction block in a block chain. Hashgraph is about creating a distributed ledger, but not in the sense of a chain of transaction blocks. You could argue that it is only a blockchain in the sense that the transaction chain is constantly on the forks.
A transaction is an information package that is called an event or event. It is a broad definition since a transaction does not just have to be about a payment. A cryptocurrency is in fact only 1 application and application area of the distributed ledger technology. An event within the network can in fact represent everything.
All events are further told to the network with the help of a gossip protocol. Indeed, every node gossips everything it knows with another node. In this way, all information about all events is effectively and super-fast. In these gossip there is of course very accurate data such as the exact times and sources. It is gossiping about the gossip so that everyone ultimately knows everything about everyone! Then a voting protocol is added.
A Voting protocol is in fact a classic and super secure cryptographic algorithm with a development history of about 30 years. Previously it was too slow to apply, but in combination with the new gossip protocol it works well when there is no need for concrete voting by every user of the network. The protocol automatically calculates how each node (user) within the network will vote on the accurate status of the ledger, the hashgraph.
Ultimately, consensus is reached on the basis of everyone’s voice, without it being necessary for a node to actually vote. It is automatically calculated how everyone votes based on all the gossip and the gossip about the gossip about every event within the hashgraph network. With the current power of our chip technology, this gossip about gossiping and virtual voting is lightning fast. Below in the video you can see a video presentation on the operation of this new TLD hashgraph technology:
Hashgraph is a very interesting project to follow. There is no public network available yet. The current technology is managed and also patented by the company Swirlds. There is also no crypto coin available yet. Questions about centralization and privacy issues remain open. No funding is requested and there is no ICO. It is just being worked in peace by this company on this new TLD technology.
At the moment it is still a matter of coffee to see whether Hashgraph actually has the potential to replace existing blockchain projects over time. It is an interesting perspective. As long as the technology is patented by the company and is not developed open-source, this will not happen. Theoretically and mathematically viewed everything can be correct, but the practice is always unruly.
Although theoretically Bitcoin can not be possible, it does work and becomes stronger every year with more and more network effects. Leeman Baird also recognizes this and realizes that Hashgraph technology will not be able to compete in that area and that is why he also states that Hashgraph technology does not have the ambition to replace existing blockchain projects … yet he could succeed, we can read this in the coffee grounds.