Hashgraph vs blockchain: The differences you need to know

Will Hedera Hashgraph soon rival blockchain to be the leading technology in the world of crypto? Blockchain may be the most well-known distributed technology at the moment, but there are still aspects it needs to improve on. Hedera Hashgraph believes it can fill in the gaps.

What is Hedera Hashgraph?

Hedera Hashgraph is another form of distributed consensus. It is a peer-to-peer platform which removes the need for a middleman to complete transactions. Their site tells us that the platform is able to handle thousands of transactions per second. The technology is also able to verify more than one million signatures per second.

The technology states that no small group of people can influence the consensus order of transactions. This is a feature that is absent from many distributed ledger technologies, but is essential for existing applications.

The technology uses Byzantine fault tolerance, meaning all transactions are validated when more than two-thirds of nodes are made aware of the transaction in place. This is considered to be a better and safer environment than the distributed ledgers of blockchain.

Consensus

Blockchain is a distributed ledger which is coded to record transactions. However, Hashgraph claims to support a more superior data structure. This structure is meant to be capable of solving the consensus mechanism, a leading problem blockchain is currently facing.

Blockchain relies on proof-of-work, where every node must agree on the order of transactions that have occurred. This narrows down the number of potential applications for blockchain.

In comparison, Hashgraph relies on the consensus algorithm to overcome shortcomings. Hashgraph implements a gossip protocol, which is something blockchain does not do. This is where nodes exchange data with other nodes to build the Hashgraph data structure. They do this by distributing signed information about current and past transactions to random neighbours. The neighbours then process this information and send it to other nodes. This process is then continued until every node gets the new information.

This technique may be faster and more secure, but there is a probability that when a node chooses its successors at random, they could be malicious. This means the transaction could be blocked from reaching two-thirds of the network. This will eventually result in an unfair outcome for the authentic creator.

Faster transactions

Hashgraph is a much faster technology due to the gossip protocol it uses. This is because it optimises messages and minimises communication. While Bitcoin allows for five transactions per second and Ethereum allows for 15 per second, Hashgraph can process thousands of transactions per second, proving how much quicker than blockchain it really is.

Open source vs patented

Blockchain is open source and has a large community that contributes to its development, with decentralisation being its defining quality. Hashgraph, however, is based on a patented algorithm. This means it is owned by Swirlds, and any new invite will rely on and go through Swirlds.

Public and private

Both technologies can exist in public and private forms. This means anyone can participate in the public versions. Public forms of blockchain include Ethereum, while the only public version of Hashgraph is called Hedera Hashgraph.

Mining

Within a blockchain, a miner is able to choose the order of transactions that occur. They can delay the transactions by putting them in future blocks or stop them from entering the system entirely. However, Hashgraph offers consensus time stamping, which offers a solution for this. The time stamping restrains users from affecting the order of transactions by denying authority to any sort of manipulation.

Final thoughts

Hashgraph is still fairly new and so doesn’t yet have the same level of support that blockchain does. However, over time, there is a possibility it could potentially exceed the capabilities of blockchain technology. Whether it will is a different question. Blockchain paved the way for Hashgraph, so its influence and potential to keep growing and developing should not be underestimated. Just as blockchain did, Hashgraph will have to go through certain levels of maturity and growth to reveal its true potential.

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