Hathor 101

Trond Bjorøy
Mar 30 · 9 min read

Are you looking for clear and to-the-point information about Hathor Network? Are you trying to understand more about the use cases made possible on the platform? Then look no further.

You may have read Hathor’s whitepaper, which has in-depth, technical descriptions of the architecture and inner workings that keep the network running. While the whitepaper certainly has its technical audience, this level of detail isn’t for everyone.

For those of you who are less technically inclined and more interested in understanding what you can achieve using the technology, this is our attempt at explaining in somewhat layman’s terms how Hathor works and what it can do for you. We also describe some of the features that make Hathor Network different from the other projects out there, as we believe we fill a market gap.

Hathor’s architecture

In short, Hathor is a permissionless layer 1 network that you can build decentralized applications and platforms on top of. Other networks that might make sense to compare Hathor Network with are Ethereum, Polkadot, Avalanche, Cardano, and a few others.

However, we don’t see ourselves as direct competitors with any of these, and we are not looking to replace anyone. Hathor Network believes that interoperability is the way forward for our industry and has already started talking to other projects with this in mind.

Hathor was created entirely from scratch, so we’re not a fork of another project. Development started back in August 2018, and we launched our mainnet in January 2020. All of our code is open-source. If you’re looking to compare our technology with other projects, we probably sit somewhere between Bitcoin, Constellation, and IOTA, having adopted their most successful concepts and features while improving on some of the sub-optimal elements.

Hathor Network uses the same Proof of Work (PoW) system as Bitcoin. PoW is a well-established, battle-tested mechanism, and coupled with merged mining, it enables miners to mine both Hathor and Bitcoin (as well as any cryptocurrency built on the SHA-256d algorithm, such as Bitcoin Cash and Bitcoin SV) at the same time and without additional cost.

This lets Hathor piggyback off Bitcoin’s infrastructure and brings the network — and everyone building on top of it — potentially Bitcoin-grade security right out of the box. Hathor has quickly achieved hash rate at exahash levels, which has been invaluable for a young network like ours and would not have been possible using any other consensus mechanism than PoW.

It’s also worth mentioning that Hathor Network recently passed a security audit by the SlowMist team, another testament to Hathor Network’s strength and security.

Apart from being the most decentralized alternative available today, another significant advantage of PoW is that miners are economically rewarded with HTR tokens, Hathor’s native token, ensuring the network’s security and stability forever. There are measures to counter inflation: we have yearly halvings, the first one happened in January this year, and as part of the custom token creation process, you need to make a token deposit. You lock up one HTR token for every 100 units of your custom token, effectively reducing the circulating supply for every new project created on Hathor.

To avoid spam issues, as we have seen on Bitcoin and other networks (the most recent example being the attack on Nano this month), Hathor users need to solve a PoW task for transactions. Transaction mining has a lower difficulty level than block mining but is otherwise the same.

This means that the network hash rate (security level) increases with every new transaction and makes spamming less attractive, as performing a successful attack becomes too resource-heavy for it to make sense. In the unlikely case spamming should become a problem, Hathor Network will consider making the PoW difficulty dynamic to increase when an attack is in progress automatically.

In addition to the security aspect, the transaction-based PoW means that miners share some of their work with users, which further decentralizes the network.

The PoW required for transactions might, however, become a problem for microtransactions and IoT devices. Picture a scenario where you’re paying for your coffee using your mobile with tokens stored in a wallet or paying for your autonomous taxi ride using an in-car IoT device. These devices typically won’t have a lot of processing power and would struggle to solve the work fast enough.

Today, a transaction mining service run by Hathor takes care of this, solving the PoW for everyone. This service could also be offered by companies using Hathor to handle the work for their customers. This solution effectively lets you send off the PoW task to another device better suited to do the heavy lifting so that the mobile or IoT device can focus on simply signing the transaction.

I know we promised we wouldn’t get too technical, but we have to mention that our architecture combines blockchain and DAG data structures. In this regard, we are closer to Constellation and IOTA than Bitcoin. If you look at IOTA’s Tangle network, it has the exact opposite scaling problem of Bitcoin. It functions well when the number of transactions is high. However, the Tangle relies on a centralized coordinator as a trusted node to confirm their transactions, and without it, the network won’t function properly.

Hathor’s architecture combines PoW blockchain and DAG to solve this scalability issue without relying on a central coordinator. With that, it also removes the dependency on any single point of failure.

When no new transactions are waiting to be confirmed, miners keep the network up and running while looking for new blocks. At the other end of the scale, the DAG provides faster transaction confirmation times the more traffic Hathor gets.

Currently, Hathor Network can handle 200 transactions per second (TPS) around PayPal levels. At the same time, it’s expected to tweak this to over 1800 TPS, which would be Visa levels, if and when that becomes necessary.

Side-DAGs are similar in concept to Polkadot’s side-chains and will be implemented later this year to ensure that the network scales to support future throughput requirements. Companies and institutions looking to explore blockchain and crypto in a controlled environment will be able to choose whether they want to set up a public or private side-DAG, with the latter giving the benefit of improved privacy features while still being secured by the main network.

Watch out for separate articles on Side-DAGs as we get closer to launch.

Hathor’s unique features

Hathor’s clear goal is to enable plug-and-play blockchain solutions, and to achieve that, creating a new token needs to be as easy as taking a photo or uploading a video to YouTube. This ease of use will inspire people to experiment and play around with tokenization and get creative about new use cases without spending any resources trying to figure out the best approach.

Creating a custom token on Hathor is done in just a few seconds. It requires no coding, and anyone can do it from the Hathor wallet, available for desktop and mobile (App Store and Google Play).

You define parameters for token name, symbol, and initial supply. Token creators can decide if they want to allow minting additional tokens in the future and melting (burning) existing tokens. For total transparency, these parameters are visible in our block explorer for anyone who wishes to verify a specific token’s settings.

As opposed to custom tokens on other platforms, all tokens on Hathor are created on layer 1, built into the protocol itself. They inherit HTR’s features and properties and the same security level that we talked about earlier. These custom Hathor tokens have all the capabilities of ERC20 tokens and a few extra ones.

Hathor intends to add support for more token standards later, such as non-fungible ones.

Right now, we’re working on the design for our upcoming Nano Contracts, Hathor’s version of smart contracts. Nano Contracts aims to be as straightforward and easy to use as the current tokenization features, meaning that they will be built-in, configurable contracts that you can set up without any deeper coding knowledge.

Nano Contracts will enable developers to create contracts, add logic and a use case to their token by simply adding a few lines of information.

The tradeoff is that Hathor Network won’t support all use cases, but the 80 percent that we do support will be straightforward to create. Hathor believes that building features that are radically accessible to everyone will be vital towards achieving mass adoption, following Pareto’s Law.

For the remaining use cases that need more complex logic than Nano Contracts can facilitate, they will be enabled through cross-chain integration with other networks. It could also be handled through side-DAGs, as their logic will be up to the implementer to decide.

This approach with native, configurable layer 1 tokens and contracts that you can use without coding will result in a transparent environment for both builders, users, and traders. It will also considerably reduce the risk of bugs and exploits compared to other platforms where you’re required to do custom smart contract development in each case.

To enable external verification and settlement of Nano Contracts, Hathor Network will implement oracles later this year. Currently, Hathor has a working solution using built-in oracles, developed along with the initial version of Nano Contracts; however, it also intends to support external solutions. Ideally, Hathor Network will enable multiple types of oracles and let the users choose the option they prefer.

We’ll be publishing a series of articles on Nano Contracts as development progresses.

Our PoW-powered, scalable network lets us provide feeless and instant transactions for everyone, enabling some interesting use cases on the network. How about a DEX that allows you to swap tokens instantly and without gas fees? This will be made possible through HathorSwap, the DEX that our partners over at HTRFDT are launching later this year, along with several other products.

On our already packed 2021 roadmap, we’ve also managed to find space for features such as NFT support and bridges to other networks to make our product offering as complete as possible towards the end of the year. We’ll also work on bringing DeFi to Hathor as this is another major goal for us. We’ll cover these topics in separate articles as well.

If there is one takeaway message we’d like you to have from this article, it would have to be this: Later this year, anyone will be able to create, launch, and list their own blockchain project, all within the same day if they wanted to.

This level of intrinsic simplicity and usability is a missing piece in the crypto industry. We believe that Hathor’s feature set will help us realize our vision of letting anyone create their own blockchain project without the financial risks that come with it today. One step closer to mainstream adoption.

About Hathor Network

Hathor Network is a PoW-based novel distributed ledger architecture using both DAG and blockchain data structures intertwined. Our network's unique design solves significant bottlenecks built with scalability, usability, and decentralization in mind, preventing the broad adoption of the technology.

Hathor Network has been on mainnet since January 2020, experiencing exponential growth in the number of custom tokens, active wallets, and mining hash rate.

For more information, please visit our Website, Twitter, Discord, and Telegram channel.

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