The Innovative Distributed Ledger Technology - Hashgraph

Hashgraph

What is Hashgraph?

A hashgraph is a data structure used in distributed ledger technology that facilitates fast and fair transactions without the need for mining or blocks. It is an alternative to blockchain that aims to improve performance, fairness and security through its unique gossip-about-gossip protocol.

Rather than recording transactions in a linear blockchain, hashgraph transactions are ordered in a directed acyclic graph (DAG) structure. When a transaction is received by a node, it is gossiped to other nodes to be added to their local ledger with a digital signature as proof. Nodes then gossip among each other to achieve consensus on the transaction order without the energy-intensive mining process used in blockchains.

The gossip-about-gossip protocol
At the heart of hashgraph is its gossip-about-gossip protocol which allows nodes to communicate efficiently and achieve immediate consensus. When a transaction occurs, it is broadcast from the node that created it to other randomly selected nodes. Those nodes then gossip about that transaction to additional randomly selected nodes.

This gossip cascade continues until all nodes have heard about the transaction directly or indirectly through the gossip process. As nodes hear about transactions from multiple independent channels, they can mathematically determine the definitive transaction order without needing to wait for block confirmations. This protocol allows hashgraph to achieve probabilistic finality in seconds compared to blockchains which require waiting for multiple block confirmations.

No forks or reorganization risks
Due to its underlying data structure and gossip protocol, Hashgraph  produces an ordered growth of the transaction graph that cannot fork or reorganize like blockchains can. This makes it resistant to attacks from malicious actors trying to rewrite transaction histories or double spend. The inherent mathematics of the protocol also produce histories that all nodes will agree on, eliminating the risks of temporary forks seen in some blockchains.

Fairness through virtual voting
Fairness is built into hashgraph through its virtual voting mechanism. When a transaction is gossiped between nodes, each node pairs it up with random previous transactions to create what are called explorers. These explorers vote on the transaction order using their digital signatures. As nodes receive explorers about a transaction from multiple independent channels, they can mathematically deduce the final transaction order approved by the network.

This mechanism prevents powerful miners or large stakeholders from manipulating the transaction order. The average user has the same power and influence over the ledger as conglomerates and ISPs. It allows hashgraph to reach agreement faster, more securely and in a fair way without mining incentives required.

Increased scalability
Hashgraph's gossip-about-gossip design allows it to scale linearly as more nodes join the network. As nodes gossip in parallel rather than waiting for block confirmations sequentially, bandwidth and processing power increase proportionally with node count. Its leaders also estimate hashgraph can process over 100,000 transactions per second with potential to scale even higher as hardware advances. This onboarding scalability makes it suitable for real-time high throughput applications.

Real world use cases
Given its technical advantages over blockchain, hashgraph is starting to see real world adoption. Leading tech company Swirlds created hashgraph and is driving forward development. It is also piloting use cases in financial transactions, supply chain and IoT networks. Healthcare data startup Hedera Hashgraph aims to use its distributed ledger for verifiable credential sharing and patient data access governance. As adoption grows, new decentralized applications focused on scalability-critical domains are expected to emerge.

In summary, hashgraph presents a novel distributed consensus protocol that could revolutionize how data is stored, transferred and approved across networks in a more performant and economical manner compared to blockchain. Its unique gossip-about-gossip design facilitates near instant finality while maintaining high security and fairness. With real world pilots underway, hashgraph may emerge as a promising alternative distributed ledger for driving innovation. Its capabilities could see wider adoption in scalability-dependent applications like financial services, IoT platforms and supply chain tracking. Only continued development and mainstream deployment will tell if it can truly compete with established blockchain networks. But its advantages position hashgraph as one to watch in the distributed ledger field.

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