What is the Hashgraph? Will it Replace Blockchains? Find Out Now with Mohsin Jameel.
The blockchain is one of the biggest technological revolutions in the last few years. The technology powering digital currencies, blockchain today is behind a large number of applications across industries. While more and more businesses are slowly realizing the huge potential of the blockchain, another new technology has been making waves of late.
Introducing the “Hashgraph” — the technology that’s touted as the Future of Distributed Ledger! In today’s article, we take a closer look at the Hashgraph, and Mohsin Jameel examine whether it’s worth the hype. Let’s get started.
First things first, what is Hashgraph??
Hashgraph just like the blockchain uses a distributed ledger. However, the similarities end there. It provides an alternative consensus mechanism and not the consensus algorithms used by Blockchain Technology.
The common consensus protocols used in the Hashgraph are “Virtual Voting” and “Gossip about Gossip.” These protocols are used to reach a fast and secure consensus.
Gossip about Gossip — The Working
This is a technique that adds a small amount of information to the two hashes (nodes in blockchain terminology). The information appended contains information about the last two people talked to. Using this information, the hashgraph is built. The hashgraph is then regularly updated with more information when other nodes gossip.
Once this is ready, the system becomes aware of the particular direction a node would incline in the case of voting. This is because it is aware of the information that each node has and when they came into the information.
Using all these snippets of data, the hashgraph is able to determine which transactions have arrived at a consensus and provide this as an input to the voting algorithm.
The Overview of the Working of the Hashgraph
A node in the Hashgraph can spread signed information to other nodes. This signed information contains data about new transactions and transactions received from other nodes. Randomly chosen nodes are assigned as neighbor nodes. The neighbor nodes then compile details about the received events into a new event.
The next neighbor node compiles information received from the previous nodes into a new event. And, so the chain continues thus building the entire hashgraph.
Finally, all nodes in the hashgraph contain information about the events created or received in the system.
Blockchain and Hashgraph — The Major Differences
It’s an immutable ledger that is distributed. The ledger contains records of all transactions, not just financial transactions, but anything that has a value.
A Hashgraph claims to be a superior data structure that aims to solve the major problem faced by the blockchain community — the consensus mechanism.
The blockchain technology uses a consensus mechanism to arrive at a decision. There are several consensus mechanisms, and they are generally divided into two categories:
· Public Blockchains
The most common examples include PoW (Proof of Work) and PoS (Proof of Stake). In both these consensus mechanisms, each node must agree with the order in which transactions have occurred in the systems. One of the huge drawbacks of these consensus protocols is that they limit the range of applications in which they can be used.
· Private Blockchains
Private Blockchains generally used leader-based consensus mechanisms. The drawback with this is that it restricts the usage of the network only to trusted partners. Another drawback with poor security standards in private blockchain makes them a potential target for DDoS (Distributed Denial of Service) attacks.
Hashgraphs, on the other hand, don’t use any of the common consensus algorithms used in blockchains like the PoW, PoS or leader-based consensus. Hashgraphs are expected to provide superior performance at low-cost since they don’t have a single point of failure. They keep the costs down because the energy required to power a hashgraph network is significantly lesser than the energy required to power the Ethereum or Bitcoin blockchain.
Hashgraph also claims that they are incredibly faster compared to Bitcoin. Around 50,000 times faster than Bitcoin and can handle up to 250,000+ transactions per second.
Hashgraph — Limitations
While it may look like the Hashgraph overcomes all the potential drawbacks of the blockchain, it’s time for a reality check.
There’s no doubt that Hashgraph is a revolutionary technology, but claiming that it outdoes the performance of the Blockchain or will render Blockchains obsolete is a tall claim. Let’s take a look at what Hashgraph can accomplish and what it cannot do.
· The supporters of Hashgraph claim that it’s faster than blockchain. However, until now, Hashgraph has been only deployed in private networks. The potentials of this technology in public networks haven’t been tested up till now.
· Hashgraph uses the “Gossip of Gossip” technique to arrive at a consensus and to spread information faster. However, when a node chooses its successor at random, there is a chance that the chosen node may be malicious. If a malicious node is chosen, then it may stop spreading the information to the next group of nodes, or it may even pass the wrong information. This prevents the transaction from reaching nearly two-thirds of the network, which leads to a skewed outcome for the genuine creator.
· Another technique employed by the Hashgraph is the “coin-toss” protocol. This technique is used to make decisions when no progress is reached via the “Gossip of Gossip” protocol. However, the coin toss protocol is heavily flawed. There is a high chance that all honest nodes may not have the same value, even after several rounds of the coin toss. If malicious nodes disrupt the consensus mechanism via the gossip protocol, then the system may require several rounds of coin-toss to arrive at a consensus. This decreases the effectiveness of the network.
Wrap Up by Mohsin Jameel
There’s no doubt that Hashgraph like Blockchain is another revolutionary technology and is quite promising. With that said, assuming that Hashgraph is the Future of Distributed Networks is a long shot. Just like Blockchain technology has matured over the years to reach its current potential, it will take many years for developers to iron out the flaws in the Hashgraph technology. Only then, the true potential of this technology can be revealed.