Hashgraph Vs Blockchain Explained

It’s been evident that our banking system has many times failed to satiate our needs. There are several cases when the banking system couldn’t even prove to be successful and fell to the prey of mishaps.

The continuously increasing collapse of several banking institutions was on the rife, and the society needed something that they can trust blindly. And then, the Blockchain Technology emerged in 2008.

Blockchain proposed a new monetary system which is intended to take control of the money supply away from the centralized authorities. The technology relies solely on P2P electronic cash system, designed particularly for the digital realm.

The online currency system was believed to be a better monetary system unless some started talking about Hashgraph.

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What is Blockchain?

The blockchain is a first-gen Distributed Ledger Technology, that works on a Sequential Data Structure forming a sequence of Blocks. Every time a new block is generated, it gets added on top of the last block. Each block comprises a set of transactions. Needless to say, blockchain relies on consensus mechanism like Proof of Work or Proof of Stake.

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What is Hashgraph?

Hashgraph is believed to be a more robust system than blockchain. Its consensus algorithm offers a new way of distributed consensus.

Some of the attributes commonly used to describe blockchain are that it is transparent, distributed, transactional, consensus-based and flexible.

On the other hand, Hashgraph bears all these features. However, It is a kind of data structure which is much fairer, faster, and more secure than blockchain. It is even seen as the future of distributed ledger technology.

The two special techniques used by Hashgraph to achieve fast, fair and secure consensus are,

1. Gossip about Gossip

Gossip about Gossip means attaching a small additional amount of the information to the Gossip, that are two hashes comprising which they got from the last two people they talked to. A Hashgraph, using this information, can be built and regularly updated when more information is gossiped by each node.

We have discussed it in details in What is Gossip Protocol?

2. Virtual Voting

Once the Hashgraph gets ready, it’s easy to know what a node would vote, as we are aware of the information each node has and when they knew it. This data can then be used as an input to the voting algorithm and to find out which transactions have reached the consensus quickly.

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Hashgraph vs Blockchain

Blockchain Technology refers to an incorruptible digital ledger of economic transactions. However, it may be programmed for recording not just financial transactions but virtually anything of value. Information stored on a blockchain exists as it is shared and continually updated with everyone in the chain. Thus, the blockchain has no single point of failure as it is not controlled by any single entity.

On the other side, Hashgraph claims to be supporting a superior data structure which is capable of solving several problems that the blockchain community has been struggling with for quite some time, like consensus mechanism.

Consensus Technologies Classification

Until now, consensus technologies were classified into either of the two categories –

1. Public Networks

Public networks are usually expensive to run. They have performance constraints resulting from PoW. This is what narrows down the number of applications where such technologies can be practically employed.

2. Private Networks

Unlike Public Networks, Private Networks restrict the usage to only known and trusted participants. This is the unique approach that brings down the cost and improves the performance, with algorithms capable to achieve 1000 transactions every second as compared to seven for Bitcoin.

With that said, loopholes in the form of relaxed security standards make this network potential targets to DDoS attacks.

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Kapil Gauhar

Kapil Gauhar is the founder of Blogger’s Gyan. He is a Passionate Blogger, a Big Thinker and a Creative Writer. His passion for doing friendship with words and letting people know about the wonders of the Digital World is what motivates him to take writing as a career.