Hedera Hasgraph Utilizes Gossip-to-Gossip Protocol to Improve Blockchain Efficiency
“The network is capable of confirming hundreds of thousands of transactions per second.”
By Block Society
While Proof of Work concepts have successfully helped Bitcoin and cryptocurrency evolve, the high energy costs associated with mining and creation of new coins has created a need for an alternative. China has announced plans to ban all cryptocurrency mining, creating difficulties for digital assets, as the majority of Bitcoin is currently mined in China due to cheap energy costs. The announced has pushed Bitcoin miners to relocate in search of cheap access to electricity. Ethereum is working to transition from a Proof of Work concept in the near future to address growing concerns with high energy costs.
Hedera Hashgraph has created a potential replacement for Proof of Work, which they call hashgraph and the gossip about gossip protocol. Nodes on the network use the gossip about gossip protocol, creating a hashgraph data structure. Each node shares its knowledge with all other nodes connected to the network. That shared knowledge allows all nodes to run the same virtual-voting consensus algorithm and to have the same knowledge as all other nodes on the network. The community is able to reach consensus on the order and timestamp of transactions without further communication, allowing the network to maintain security and transparency while supporting fast network speeds.
Hedera Hashgraph’s platform provides consistent transaction times and is highly scalable while offering three main services: a native cryptocurrency, file storage and implementation of smart contracts. The platform uses virtual-voting to replace Proof of Work, which offers users low transaction fees and supports the use of micropayments while drastically improving scalability. Users complete payments for services like transaction fees and file storage fees on the platform using Hedera’s native token, HBAR. The platform held an ICO in August 2018, reaching a market cap of $20 million. The ICO price was set at 1 HBAR= $0.12 and a total supply of 50 billion coins.
Users can run smart contracts unchanged through Solidity. The Hedera community is run by governing members of the Hedera Council, which consists of 39 councilmembers serving set term limits. Hedera uses the hashgraph consensus algorithm created by Dr. Leemon Baird, which allows the platform to process hundreds of thousands of transactions per second in a single shard. A shard is “a fully connected, peer-to-peer mesh of nodes in a network,” and “consensus latency is measured in seconds, not minutes, hours or days.” Asynchronous Byzantine Fault Tolerance is utilized on the platform to protect against Distributed Denial of Service (DDoS) attacks.
“Hedera Hashgraph’s platform provides consistent transaction times and is highly scalable while offering three main services: a native cryptocurrency, file storage and implementation of smart contracts. The platform uses virtual-voting to replace Proof of Work, which offers users low transaction fees and supports the use of micropayments while drastically improving scalability.”
Each transaction is confirmed in the order it was received in order to achieve fair ordering and prevent transactions from being added to the blockchain out of chronological order. The platform prevents developers and users from forking the official version of Hedera and only the Hedera Council has the ability to adopt network and software updates. If the Council agrees to updates, the changes are guaranteed to occur.
Users have the ability to opt-in or opt-out of Know Your Customer requirements and choose whether to bind verified identities to their Hedera network accounts, allowing users to maintain control over their personal information. The gossip about gossip protocol aims to great a system which generates trust across the network. Hashgraph data structures incorporate all information and transactions, allowing users to add every transaction and containers to the blockchain without sacrificing security or efficiency.
Hashgraph data structures are able to operate extremely fast, unlike Proof of Work concepts, and use very little bandwidth. Basic high-speed internet connections are enough to power nodes on the platform.
Byzantine Fault Tolerance prevents small groups or individual members from preventing the community from reaching consensus or change consensus after it is reached, and prevents issues present on other platforms like Bitcoin. “Blockchain does not have a guarantee of Byzantine agreement, because a member never reaches certainty that agreement has been achieved (there’s just a probability that rises over time). Blockchain is also non-Byzantine because it doesn’t automatically deal with network partitions. If a group of miners is isolated from the rest of the internet, that can allow multiple chains to grow, which conflict with each other on the order of transactions.”
Hedera also incorporates staking, allowing users who join their node network to receive HBAR based on their HBAR holdings. HBAR holdings will also determine how much voting power users have. Proxy staking allows users who do not run a node to earn interest on the HBAR holdings. Node payments are funded through service and transaction fees.