Comparing Hashgraph and Blockchain
The Information Technology and Internet revolution has now moved to the next level. Blockchain seems to be the next step of this progressive evolution. Blockchain is based on distributed ledger technology but the true potential of this cutting edge technology was only felt with the advent of Blockchain. As the world catches up and processes what Blockchain as a concept means and what it could represent for our present and future, a new technology being called the ‘future of distributed ledger’ is making news – the Hashgraph.
What is Hashgraph?
‘Hashgraph, like Blockchain is based on DLT but provides a different consensus mechanism. It utilises methods like ‘Gossip about Gossip’ and ‘Virtual Voting’ to achieve quick and safe consensus.
The method of ‘Gossip about Gossip’ provides a certain level of data to the two hashes which consist of information that the final two people talked about. This data is used to build the Hashgraph which is periodically updated whenever additional informations is discussed on different nodes. You now have an extensive amount of information regarding who talked to who in the network, in what order and what was discussed at every point. As a result, the system would start understanding how a particular node would vote as it knows the data that every node possesses and when they became aware of it. This information is used further to understand which transactions have been fast to achieve consensus and is also used as input for the voting algorithm.
We will now explain this in detail:
Any given node in the Hashgraph can disperse signed data which is defined as an event of the fresh transactions as well as those which are transmitted to it from the various other nodes, to any neighbouring node of its choice. These neighbouring nodes will add these received events with the events that have been transmitted to it from other nodes and this new compilation becomes a new event and this process continues. At the end, all nodes are aware of any data created or received.
What Hashgraph offers that Blockchain doesn’t
Blockchain us an immutable distributed ledger of transactions which can be developed to note financial transactions as well as anything that has value. A hashgraph on the other hand, claims to be able to back a higher level of data structure which can solve the complex challenge which the world of Blockchain is currently dealing with – the consensus mechanism.
There are two types of consensus mechanisms that can be provided by Blockchain based on the nature of the blockchain – Public and Private.
The Public Blockchain depends on either ‘Proof of Work’ or ‘Proof of Stake’ as the consensus mechanism. In this setup, every single node must be in agreement about the order in which transactions have taken place and so this limits the number of significant places where this kind of technology can have application and can be used to great advantage.
The Private Blockchain depends on a leader centric consensus mechanism which limits access or usage to trusted members only. It comes with its limitations in the form of loose safety standards which which makes these networks susceptible to DDoS attacks.
In comparison, the algorithm for Hashgraph consensus rises above such flaws as it is not dependent on either ‘Proof of Work’ or ‘Proof of Stake’. It is also independent of any leader centric mechanism. The expectation is that it will be able to deliver low-cost quality performance with no single point of failure. Low-cost quality performance means the requirement of energy for consumption will decrease especially in comparison to cryptocurrencies like Bitcoin and Ethereum. Hashgraph is upto 50,000 times faster than Bitcoin and offers upto 250,000+ transactions every second.
Hashgraph – What it is today
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!
There is something very promising and exciting about the technology that makes Hashgraph possible. However, saying that it will overtake Blockchain or render Blockchain redundant or obsolete would be a rash, unproven statement. We must truly understand what Hashgraph represents.
- It is claimed as we have discussed above that the Hashgraph is much faster than Blockchain. In the current environment however, Hashgraph has only been used in private, permission-based networks. Its performance and potential in a public network is still completely untested and as a result unknown.
- The Hashgraph utilises the ‘Gossip of Gossip’ method to enable quick and safe consensus. The challenge is that when a node chooses the next one consistently at random, there is a chance that all the selected nodes can be malicious. In the event that these malicious nodes stop communicating the transaction or information to the next node, it will block the transactions from reaching the rest of the network and this would lead to an unfair result for the original creator.
- The Hashgraph uses the ‘coin toss’ protocol to help nodes make a decision when there is a lack in movement in the consensus protocol. There is a probability that all honest nodes will have the same value after multiple rounds of the coin toss. If the malicious nodes disturb the process by trying to influence the gossip protocol, it will take a great number of rounds to achieve consensus which then brings down 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.
Hashgraph represents another very exciting breakthrough in technology similar to Blockchain and definitely has promise. We can and should appreciate this technology but that should not allow us to discount the original technology that has made Hashgraph possible and that is Blockchain. Blockchain has made great strides in the last few years and many things about it that were viewed as limitations earlier have been resolved. The same cannot be said for Hashgraph. It has many stages of maturity that it is yet to go through and only once it has gone through these steps will we be able to understand its real potential.