We have been discussing Blockchain technology in the last so many articles. We have also mentioned that it has many shortcomings. Now, the question is – if newer technology can overcome Blockchain’s limitations, will it replace the Blockchain? Is there any existing technology better than Blockchain? Yes, there is already an alternative, and it is known as Hashgraph. In this article, we are going to talk about Hashgraph in detail.
Why the need for Hashgraph?
Even though blockchain has many applications in the real world, there are certain limitations. The biggest problem with it is its limitations to scale to the levels of MasterCard or Visa without compromising its core concept of decentralization. Another problem is with its proof of work consensus to achieve fairness and security. As of today, Blockchain is not a solution for these problems for sure.
What is Hashgraph?
Hashgraph is a solution to the above problem that uses Directed Acyclic Graph (DAG), and it is considered a superior technology compared to blockchain. It is created on a concept known as FFM – Fast, Feeless, and Minerless. It is more effective than the Blockchain’s proof of work concept. It enables you to reach an agreement quickly and in a secure manner when you do transactions.
How does Hashgraph work?
The users in the Hashgraph don’t trust each other, and hence to establish the trust, Hashgragh implements strong mathematical proofs in its protocol. Let us look at the two protocols it follows –
Gossip Protocol –
Also known as Who, When, and What protocol. It is the first important thing that Hashgraph implements in all types of distributed ledgers. It lets everyone in the network know that the transaction has occurred.
Gossip protocol is a random protocol. When a transaction takes place on one node on the network, it spreads the transaction information across all the nodes. The nodes that have received the new transaction information will spread it to the other nodes. And the chain continues. When the information gets passed between nodes, it is not only passing ‘what’ happened but also ‘who’ told them and ‘when’ it happened. To sum up, every node knows what has happened, when it has happened, and who gave them the information. This way, it brings transparency in the system.
Virtual Voting –
The second protocol that Hashgraph follows is virtual voting. Once every node on the network knows what, when, and who, they can do virtual voting at their native node. It helps to reach the finality of orders of the transactions.
The word ‘graph’ in Hashgraph signifies that through gossip protocol and virtual voting, once all the nodes are informed and decide about the finality, the events in the network look like a graph on a time-based event line. Through this process, the Hashgraph achieves the security standards known as Asynchronous Byzantine Fault Tolerant. An asynchronous operation is one that is independent of other processes in the system. They react to the finality of the transaction order the moment they occur. The same happens in the Blockchain.
Blockchain is the synchronous operation in which the process runs after the results of the other processes are complete.
What problem is Hashgraph going to solve?
From the above discussion, it is clear that Hashgraph will overcome the limitation of blockchain. The real question is – to what extent? Let us look at some of the features of Hashgraph to answer this –
- It is scalable and can handle up to 250,000 transactions per second.
- Hashgraph is secure, fair, and stable as it follows asynchronous Byzantine fault-tolerant.
- There are no issues related to governance, and it is also regulatory compliant.
Hashgraph, as of today, is a patented technology. However, the developers are soon going to make it public with the launch of Hedera Hashgraph Cryptocurrency.
It is a public implementation of Hashgraph technology, and currently, it is in the pre-ICO phase. It will also be DApps and will come with a utility token that will grant access to token holders to distributed applications on the platform.
Will Hashgrapgh replace the blockchain?
Now we know a bit about Hashgraph, and we can discuss if it can make blockchain obsolete.
It could, but blockchain has a ten years headstart, and hence adoption could be difficult. Hundreds of companies across the globe have invested millions into the blockchain. It will make investors reluctant to make any changes, and hence chances of blockchain becoming obsolete are less.
However, there is no second thought that Hashgraph is a superior technology. At some point, people may start giving Hashgraph’s technical superiority preference and start using it. Hence, we need to keep a close eye on the developments around Hashgraph.