Before getting into what Hashgraph is, let’s talk about what a blockchain is.
A blockchain, simply put, is a chain of blocks sequentially linked together. So, each block is directly connected to two other blocks, one preceding, and another one following.
Specifically, in Bitcoin, the proof of work mechanism is in place so that any miner who wishes to publish a block must construct it, and should use a significant amount of computational resources to show that he is genuine.
Also, that mechanism ensures only one block is published every ten minutes. Ethereum also follows a similar procedure, but a new block can be posted every few seconds.
Here, when two miners publish a block at the same time, through network consensus, only one block will be accepted. Thus, wasting the efforts and energy of the left-out miner because he would not receive the block reward – an incentive to keep miners working.
Hashgraph overcomes this problem. It allows any number of blocks to be published at a time. Moreover, it does not use proof of work mechanism.
That means faster transaction confirmation – for which Bitcoin is condemned for being slow. However, implementing Lightning Network might change the Bitcoin scaling issue.
Hashgraph alone is a data structure plus a consensus algorithm. In other words, it defines how data should be stored, retrieved, and managed; and it specifies how a distributed network under its implementation should work.
Contrary to many crypto-projects, which are mostly open-source and entirely free to use, the Hashgraph is an intellectual property of Swirlds, a platform built for distributed applications.
Nevertheless, the free to use nature of the Bitcoin gave birth to many famous projects: Ethereum, Litecoin, and Zcash, all started out by taking the Bitcoin code base and by adding extra features.
An open platform like Ethereum is being built using the Hashgraph which is nothing but Hedera Hashgraph. The platform will have three kinds of services to offer: cryptocurrency, file storage, smart contracts.
Anybody can use the platform for free, and without restrictions. One can maintain a full node and can get paid for it; however, staking some funds is necessary.
In Hashgraph, a node only stores the balances of non-empty addresses. That way storing massive amounts of transactional data won’t be necessary.
Hashgraph is a ground-breaking technology in crypto-space. In spite of that, it is not open, and not everybody can experiment with the algorithm.
The likes of Bitcoin and Ethereum have been around for a long time, and their reputation was put under test several times. Being said that, Hashgraph is yet to see the real-world toughness. Then only we can know how better it is. Otherwise, it would be a great tech without being an effective problem-solver.
About the author: Raghunath is a Writer and Cryptocurrency Researcher. He is enthusiastic about Bitcoin, and the underlying technology, and tries to understand how the future evolves with blockchain tech. He frequently writes about the latest buzz on Cryptocurrency at ecoin4dummies.com.