Hedera Hashgraph and its Distributed Ledger Technology
~ Platform, Digital currency, Cybersecurity.
The entire crypto community got fired up when Hedera Hashgraph posted stats of 10,000 transactions per second. This is an entirely new technology mainly designed for industry clients. With the launching of an open-source version of their technology, many industry players believe this could eventually challenge established blockchains. How true can this be? Only time will tell! The truth is that blockchain technology and cryptocurrencies will transform your life, and even if you’re not going to allow it, your life will eventually change.
Understanding What Hedera Hashgraph Means
Hedera named its new kind of distributed ledger technology “Hashgraph.” In case you don’t understand what distributed ledger technology (DLT) means, it has to do with a collection of computers communicating with each other to agree on something and this is known as consensus. The agreement in the case of Hedera is about the validity of transactions and the decentralized structure of the network helps it to maintain security and fairness. Well, this would sound quite familiar if you’ve been in the crypto space for a while because blockchain technology is actually a form of DLT.
For Hedera Hashgraph, things are quite different as it uses the Directed Acyclic Graph (DAG) technology. It also makes use of the Virtual Voting consensus algorithm and a Gossip-to-Gossip protocol. Records from their white paper show that the project has “Asynchronous Byzantine Fault Tolerance,” which makes the network faster, fairer and more secure than other consensus mechanisms. With this, Hedera Hashgraph will be more efficient, secure, and scalable — these are significant improvements to existing blockchain solutions.
What are some of the Issues Hedera Hashgraph wants to Resolve?
Hedera and the Hashgraph have focused on solving five major issues. The team behind the project is convinced that they will boost the mainstream adoption of distributed ledger technology when these problems are solved.
The five problems are:
· Security: One of the algorithms believed to be among the most secure ways of providing consensus is the Asynchronous Byzantine Fault Tolerance, which Hashgraph uses as its consensus. This also makes it impossible for a member of the Hashgraph community to halt consensus or alter records after reaching a consensus. As a result of finality provided when consensus is reached, Hashgraph is more secure than blockchain technology. In addition to its secure nature, it also deals with the issue of fairness by leveraging Consensus Time Stamping to achieve mathematically proven fairness via a democratic voting process.
· Performance: The project claims to be very fast and can handle over 10,000 transactions per second, and consensus is reached in 3–5 seconds with finality. In fact, Hedera testnets in the past have achieved a throughput of 50,000 transactions per second while experiencing a geographical constraint in just one continent in one test. The platform achieved speeds of 500,000 TPS. The only thing that seems to limit Hedera’s platform is network bandwidth and when compared to other networks in terms of speeds achieved by Hedera, they are far behind. The Visa network, for example, achieves just 2,000 TPS while Bitcoin has not exceeded seven TPS.
· Stability: The project has revealed that it will never fork since its stability is guaranteed with legal and technical controls that prohibit forking. Since this measure will prevent competing platforms from being created, it’s a smart way to avoid uncertainty and confusion. The technical control has two capabilities and one of them has to do with the pedigree of Hashgraph which a software client can verify via a shared state mechanism. In this kind of shared state, an individual with bad intentions can’t compromise the network. In addition, it also hinders any of the nodes from forking or making alterations and forwarding them to the entire network as valid. The other capability makes sure that whatever software changes the governing body makes are guaranteed to be legitimate since they are updated automatically and specified across the network.
· Regulatory Compliance: The project has also enabled KYC/AML compliance via an added optional identity mechanism. The identity mechanism tagged Opt-in Escrow Identity System permits verified identities to be bound to anonymous wallets. This system is opt-in, which implies that users have the option to use the mechanism or not. If they decide not to use it, then their transactions will be pseudonymous. However, their failure to opt-in may prevent users from performing some financial transactions. As regulatory bodies and governments come out with regulations for the crypto world, this feature ensures that Hedera continues to gain mass adoption.
· Governance: Hedera Hashgraph functions with two governance models as explained in their whitepaper. One is the Council Government Model and this is the overall governing body of the project. This body upholds the network’s trustworthiness, decentralization and stability. The other governance model is the Consensus Model and this model allows any of the participants that desire to run a node to do so.
What powers the Hedera public chain is its native crypto known as HBAR. It serves as a utility token that powers decentralized applications. It’s also used to build peer-to-peer payment business models and shield the entire network from individuals with evil intents.
For those running decentralized applications, HBAR can be used to pay for computational power that’s needed to run a smart contract, transfer coins or store a file. Its function is similar to that of Gas on NEO and Ethereum platforms. Exchanges where you can buy HBAR include OKEx, Binance, Huobi Global and several others. On CoinMarketCap, Hedera Hashgraph is currently among the top 70 cryptos based on market cap.
Find out more about Hedera and other exciting crypto projects by reading “The Digital World of Crypto Riches.” The author has researched over a hundred digital currencies and has provided summaries that will inform you more about the crypto world.
The truth is that the distributed ledger technology which Hedera Hashgraph presented is revolutionary in the blockchain world. Although the codebase may be patented, it remains open-source. Anyone is free to be involved in the network, including developers who can freely develop their DApps without requiring a license. The project has successfully resolved the issue of scalability — though in a number of transactions. With time we will find out how well it can scale the number of network nodes which is presently small.
~ The official website of Hedera Hashgraph is https://www.hedera.com/