The world is finally moving to the next level of revolution in IT & Internet. The Blockchain is tout to be ‘the internet 3.0.’ It is based on the distributed ledger technology, though the real potential of this technology was realized only when the Blockchain came into existence. And when, still many people are in the process of understanding use cases of the Blockchain Technology beyond Bitcoin, a new technology is making news, hyped as the ‘future of distributed ledger,’ the Hashgraph.
What is Hashgraph?
Hashgraph is based on distributed ledger like Blockchain, however, it offers an alternative consensus mechanism. It uses techniques like ‘Gossip about Gossip’ and ‘Virtual Voting’ to achieve fast and secure consensus.
‘Gossip about Gossip’ technique attaches a small additional amount of information with the two hashes containing information about the last two people talked to. Utilizing this information, a Hashgraph is built and is regularly updated when more information is gossiped on different nodes. Once it is ready, the system knows what a node would vote, since it is aware of information that each node has and when they knew it. This data is further utilized to find which transactions have reached consensus quickly and as an input to the voting algorithm.
The detailed explanation is as follows:
A node in Hashgraph can spread signed information called events of the new transactions and transactions received from others, to randomly chosen neighbor nodes. These neighbor nodes will compile received events with the events received from other nodes into a new event and the process continues. Eventually, all the nodes are aware of the information created or received.
What Hashgraph offers over Blockchain
Blockchain is an immutable distributed ledger of transactions which can be coded to record not just financial transactions but anything that has a value. On the other hand, Hashgraph claims to support a superior data structure capable of solving the major problem which the Blockchain community is facing, the consensus mechanism.
The consensus mechanism which Blockchains offer can be divided into two categories based on the type of Blockchain i.e. Public or Private.
The Public Blockchain relies on consensus mechanism such as ‘Proof of Work’ or ‘Proof of Stake.’ For these, every node must agree with the order of the transactions in which they have occurred, which narrows down the number of applications where such technologies can be practically employed.
On the other hand, Private Blockchain relies on leader-based consensus mechanism which restricts usage only to trusted partners. However, it has loopholes in the form of relaxed security standards make these networks potential targets for DDoS attacks.
Read About : Different types of Blockchain
Compared to these, Hashgraph consensus algorithm overcomes these shortcomings as it requires neither ‘Proof of Work/Stake’ nor any other leader-based mechanism. It is expected to deliver low-cost quality performance with no single point of failure. Low-cost quality performance means less energy consumption as compared to Bitcoin and Ethereum. Also, Hashgraph is 50,000 times faster than Bitcoin and offers up to 250,000+ transactions per second.
Hashgraph – The Reality Check
Hashgraph is no doubt a promising technology, but declaring that it will outdo Blockchain or make it obsolete would be a bias statement. Let’s do a reality check on what Hashgraph is and what it is not!
- The Hashgraph claims to be very fast as compare to the Blockchain. However, till now, Hashgraph is only deployed in private, permissioned-based network. Its potential in a public network is yet to be discovered.
- Hashgraph uses ‘Gossip of Gossip’ technique for faster and secure consensus. However, when a node chooses its successors uniformly at random, there is some probability that all the chosen nodes may be malicious. And in case these malicious successors node stop passing the transaction to the next group of nodes, it will prevent the transaction from reaching two-thirds of the network and eventually that would result in unfair outcome for the authentic creator.
- Hashgraph employs ‘coin toss’ protocol for nodes to make decisions when there is no progress in the consensus protocol. There is a non-zero probability that all of the honest nodes will have the same value, after numerous rounds of coin toss. In case the malicious nodes disrupt the mechanism by manipulating the gossip protocol, it may take numerous rounds to reach consensus, decreasing the effectiveness of the protocol.
Hashgraph is another great technology like Blockchain and is surely promising. However, while we appreciate this technology we should not underestimate the original underlying technology i.e. Blockchain which has paved the way for this new technology. But like Blockchain has grown in last few years, and many of its limitation has been found and resolved, Hashgraph would also have to go through the similar stages of maturity and only then, its true potential would be revealed.