Is Blockchain Alternative Hashgraph Really A Game Changer: A Beginner’s Guide
The majority of cryptocurrencies are built on the blockchain. In this article, I discussed why one ought to be more excited about blockchain — and not bitcoin — due to the power of distributed ledger technology. Blockchain is just one example of distributed ledger technology.
Hashgraph is another, and it might be the biggest threat to the blockchain.
Here, a description of Hedera hashgraph, from their website:
“The Hedera hashgraph platform provides a new form of distributed consensus; a way for people who don’t know or trust each other to securely collaborate and transact online without the need for a trusted intermediary. The platform is lightning fast, secure, and fair, and, unlike some blockchain-based platforms, doesn’t require compute-heavy proof-of-work. Hedera enables and empowers developers to build an entirely new class of distributed applications never before possible.”
When I first learned of Hedera hashgraph, I was immediately intrigued.
The first reason: hashgraph is fast. And second: the team has achieved asynchronous Byzantine Fault Tolerance.
Umm…what’s that? And why is it important?
Let’s dig in a bit.
Why “asynchronous Byzantine Fault Tolerance” Is Soooo Important
To understand asynchronous Byzantine Fault Tolerance, or aBFT, let’s first consider the Byzantine General’s problem, a term inspired by the Byzantine army. Consider this:
Four generals commanding four separate groups of an army. They are surrounding a city with four walls. The goal is to attack the city — or retreat — in a coordinated manner, with consensus, with no misunderstanding.
A problem could arise if the leading general tells two of the other generals to attack and the other one to retreat (the understanding here is that all four groups need to attack (or retreat) together in order to succeed).
Now, think back before Telegram and Facebook, back to let’s say 1710…
If the leader general had a messenger, and he sent the messenger to all the other generals, the messenger could potentially A) be bribed by someone along the way, B) be bribed by another general, C) give the message to one general and then get killed on the way to the other generals…
Hopefully you get the point.
Consensus is a difficult problem to solve in this case.
Here is a graphic to illustrate.
Reaching consensus is essential to distributed ledger technology.
Satoshi Nakamoto, the infamous — and invisible — creator of Bitcoin, proposed a solution to this problem many years ago in this email. The solution: proof-of-work. This is what Bitcoin and many other blockchain projects use as a consensus protocol.
Only problem is, proof-of-work takes a long time to work. Transaction times are becoming slower. And the general…consensus…is that it’s difficult to scale using the blockchain. The transaction fees were a concern at one point, too, although these are less of an issue at this point.
Hashgraph doesn’t use proof-of-work. It uses virtual-voting. Super important.
The inventor of the virtual-voting consensus algorithm for hashgraph — Dr. Leemon Baird — provides a pretty solid and objective explanation on the pros and cons of proof-of-work. It’s worth a watch:
Perhaps hashgraph will prove faster — and more secure — than blockchain (and all other DLT options on the market), with its virtual-voting consensus protocol.
Listen to Leemon explain virtual-voting:
It should be noted that the recent release of the much anticipated Lightning Network hopes to solve the speed problem of bitcoin, and the creators of Ethereum are hoping to work out their scaling problem, too. However, making bitcoin or ethereum transactions faster is just one part of the problem. The security is important as well.
This is where Byzantine Fault Tolerant comes in.
In this interview with Hidden Forces, Dr. Leemon Baird discusses BFT:
Byzantine fault tolerant (BFT) means that when you’re trying to figure out the order of transactions there comes a moment in time when you know that you have reached consensus. Ultimately, byzantine fault tolerant (BFT) means three things: 1) We are going to come to consensus; 2) We will know when we’ve come to consensus; and 3) We’re never wrong — you’re mathematically guaranteed that everybody else is going to reach the exact same consensus. That’s byzantine.
BFT can be either asynchronous byzantine (aBFT) or partially asynchronous byzantine. Both are mathematically guaranteed, with the difference being the level of assumptions you’re making about your environment. aBFT [as in hashgraph] would assume evil actors exist in the community because they do. However, if you’re making faulty assumptions like there are no botnets in the world, it would be partially Asynchronous BFT — because botnets do exist in the real world. If you start a math proof by assuming there are no botnets in the world, then I’m not really sure what your proof means because you’re living in a fantasy world.
Byzantine fault tolerant (BFT) is the conclusion. Asynchronous vs. partially asynchronous byzantine fault tolerant (aBFT) are the assumptions at the beginning.
Unlike the other systems, hashgraph is proven to be fully asynchronous byzantine. This means it makes no assumptions about how fast messages are passed over the internet, making it resilient against DDoS attacks, botnets, and firewalls. Hashgraph is mathematically guaranteed to reach consensus and be secure as long as less than one-third of participants are malicious (which is something that must always be assumed for DLT).
Simply put, Hedera hashgraph assumes that there will be bad actors. Leemon Baird goes more in-depth in this Hidden Forces interview, including here where he discusses how bitcoin doesn’t even qualify as BFT:
“…remember with Bitcoin every time you get a confirmation you become a little bit more confident. But, you never actually reach a moment where you’re absolutely sure — you just say, “well after six confirmations, I think I’m sure enough to give the customer the thing he just bought”. Or, “maybe he’s buying something really big, so I’ll wait for twelve confirmations”, but you never really reach a moment where you’re one hundred percent sure.
Bitcoin is not byzantine. It’s not even byzantine under bad assumptions. In Bitcoin, there is never a moment in time where you know that you have consensus and you’ll never be wrong. All that happens is that you become more confident over time, but it’s not byzantine. Period.”
Hashgraph & Its Gossip Protocol
Hashgraph also utilizes something called gossip-about-gossip. An excerpt from the Hedera hashgraph website:
Using a gossip protocol, nodes efficiently and rapidly exchange data with other nodes in the community. This automatically builds a hashgraph data structure using the novel “gossip about gossip” protocol. This data structure is cryptographically secure and contains the history of communication in a community. Using this as an input, nodes run the same virtual-voting consensus algorithm as other nodes. The community reaches consensus on the order and timestamp without any further communication over the internet. Each event is digitally signed by its creator.
And so you end up getting something that looks like this:
It’s the combination of speed, security and ability to scale that is important, and for Hedera hashgraph to achieve the highest level of security thus far in the distributed ledger technology space all while managing to achieve lightning fast transactions, it is special at the very least.
And even more special because of asynchronous Byzantine Fault Tolerance.
And the hashgraph that is created by the gossip protocol over time looks pretty cool as well.
Could this new platform be the game-changer the world needs right now?
One Use Case For Hedera Hashgraph (as an example)
Here is one interesting use case for hashgraph: Intiva Health
From their site:
The Intiva Health Platform currently allows licensed medical professionals, facilities, and groups to streamline recruitment, expedite credentialing, and maintain compliance. Intiva Health will completely redefine the medical credentialing process by integrating a Hashgraph-based, self-auditing solution that will instantly verify provider’s credentials — cutting months’ worth of processing time to a matter of seconds. The Intiva Token (NTVA) builds on this idea and rewards users for time spent on our platform.
In this video created and published by Cryptico News, Intiva Health’s Content Manager Ivan Perez discusses why they chose hashgraph over blockchain:
A process that would take a month will now take seconds, all the while having the highest level of security? Contributing solutions in the healthcare space?
Sounds good, right?
What else could be created on top of Hedera hashgraph? Well, Hashgraph hosted a 24-hour hackathon contest at TechCrunch Disrupt last year, where a few teams created fast, usable and decentralized apps in 24 hours.
Because hashgraph was created using Java, developers were (and are) able to quickly get to work, since the language is in widespread use.
It’ll be interesting to see what kinds of solutions are created on top of hashgraph, and whether — once in the wild — it will prove over time to be the game changer that it appears to be.
The Hedera hashgraph Token
A Hedera hashgraph token is a fairly new thing, but it’s now officially a thing.
The lack of a token, or a public ledger, was actually a cause for concern for distributed ledger / cryptocurrency enthusiasts. For one, it was due to interest in investment and the initial lack of opportunity. No surprise there.
Moreover, the fact that the company responsible for the creation of hashgraph — Swirlds — holds a patent for the hashgraph algorithm, and has chosen to not make the code open source, is concerning for many.
Nevertheless, there is a Hedera hashgraph token, and this is the message that Hedera hashgraph has for developers:
You can build an entirely new class of distributed applications on Hedera hashgraph using a native cryptocurrency. You will have complete ownership and discretion over the licensing you choose for these applications. The platform will provide a fluid ecosystem and transparent codebase, and is supported by a global community committed to free education.
I see Hedera hashgrpah as a game-changer. What do you think?
You can find more information about the Hedera hashgraph token here.
For more information on hashgraph, check out the following links:
- Hedera hashgraph website: https://www.hederahashgraph.com/
- Company “launch” event in NYC this past March: https://www.youtube.com/watch?time_continue=5&v=JzFXZvTrEnI
- Critical view of hashgraph in Forbes: https://www.forbes.com/sites/jeffkauflin/2018/03/13/hedera-hashgraph-thinks-it-can-one-up-bitcoin-and-ethereum-with-faster-transactions/#51ba8362abcb
- Hidden Forces interview — https://www.hiddenforcespod.com/leemon-baird-hashgraph-distributed-ledger-technology-blockchain/
- For developers interested in building —https://dev.hashgraph.com/
