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Hedera Hashgraph – Distributed, distributed-level accounting technology

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Hashgraph: What you need to know

Will Blockchain take a seat on Hashgraph's back seat?

Blockchain, the technology behind Bitcoin, is explored in many areas that seek to bring transparency, immutability and efficiency to the table. Major retailers and companies like IBM and Wal-Mart are pursuing a variety of technology applications. Even the smallest and most independent companies are abundant. Use cases range from supply chain monitoring, land ownership documentation and redefinition of health care.

Despite the clamor, and like any new technology, blockchain is not without deficit. Now, thanks to an algorithm invented by Leemon Baird, distributed ledger technology (DLP) is going beyond the limits of the blockchain. It seems possible that the solution to the unresolved blockchain challenges may lie in what Baird calls "hashgraph".

What is a distributed ledger?

Those familiar with blockchain know that technology is just one type of DLT. DLT refers to systems that use consent algorithms to replicate data across multiple sites or nodes. In other words, data is processed by each node on the network rather than through a central hub.

Based on the results of each node that processes the data, a consensus can be reached to validate the data. The consent is stored in each node. With blockchain, data is stored in blocks connected in a chain. However, not all DLTs store data in blocks, and not all DLTs have the same qualities, as well as having a distributed ledger structure.

Presentation of hashgraph

Baird, the inventor of hashgraph, has spent over two decades as an IT expert. He co-founded several startups – the most recent, a startup called Hedera, based on its hashgraph algorithm. Co-founder and CEO of Hedera, Mance Harmon is a technology entrepreneur and researcher. The two worked together for many years, including the co-founder of Swirlds, a development platform for hashgraph applications.

Several members of the Hedera team, including co-founders, chatted with Forbes contributor Jefferson Nunn to the & nbsp;Hedera18 Hackathon& nbsp; on what hashgraph and Hedera have to offer.

The problem of trust

Just as Bitcoin was created to enable peer-to-peer transactions and eliminate the need for a third party, & nbsp;hashgraph& Nbsp; is

"A way for people who do not know each other or trust one another to cooperate securely and make online transactions without the need for a trusted intermediary".

& nbsp; as described in more detail by Baird and Harmon on the & nbsp;Swirlds:

"The goal of a distributed consent algorithm is to enable a community of users to reach an agreement on the order in which some of them have generated transactions, when no single & nbsp; member is considered reliable by everyone. & Nbsp; In this way, it is a system to generate trust when individuals do not already trust one another. "

Currently, most online transactions involve a third party due to lack of trust. However, third-party involvement often complicates and slows down transaction processes. Furthermore, these third parties are not infallible and their centralized structure presents inherent risks.

Security through decentralization

Current data and transaction systems are based on centralized servers. For example, all transactions of a bank pass through a central server. All data collected by Google are recorded in a central location. This structure, unfortunately, is vulnerable in terms of hacking and corruption. The proof of this vulnerability is clear with & nbsp;sixteen major retailers& nbsp; and their customers hit by hack since January 2017, along with the elections and & nbsp;relative votes& Nbsp; tampering. Security-conscious cryptocurrent holders avoid centralized exchanges because of this same risk.

In his & nbsp;paper"Dictatorship, democracy and blockchain ", explains Harmon& Nbsp;when data is stored in a centralized location, the risks of cybercrime are higher. With a singular attack on the central servers, hackers can cause enormous damage. In addition, Harmon points out that control and ownership of data is concentrated in the hands of a few with centralized systems, which can facilitate the abuse and manipulation of data.

According to Harmon, the registries distributed as hashgraph and blockchain mitigate these risks as

"

With multiple nodes that verify transactions and store data, tampering becomes much more complex. Modifying data on a node would not affect the network; rather, each node should be modified individually. Furthermore, a single hack has no effect on every node, which prevents another big problem: network shutdowns.

Resilience of the network through & nbsp;tolerance to asynchronous Byzantine errors

As Baird said to Nunn,

"… it's nice to have a wonderful network, but if someone could easily switch off the entire network for hours, it's not that good."

The hashgra algorithm provides a higher level of network resilience than traditional centralized data storage and blockchain.

The mechanism underlying the hashgraph resilience is the tolerance to Byzantine failures,& Nbsp;the holy grail of security in the world of DLT. As Harmon told Nunn, Byzantine fault tolerance is a 30-year concept in the academic field, but

"[w]the novelty of hat is the ability to make it on a large scale "

that's what Baird realized.

Second& Nbsp;Blockonomi,

"[I]n a distributed, Byzantine Fault Tolerance system refers to the system's ability to maintain an honest consensus in the network despite the malicious nodes failing or propagating false messages. "

Harmon explained to Nunn that

"The asynchronous part is the important part"

the key to why

"In terms of security, the hashgraph algorithm reaches the gold standard in the field of distributed consent".

The asynchronous factor, according to Baird, refers to all the nodes that are equal; that is, the absence of a leader who could be targeted by attackers.

In the words of Baird, the asynchronous Byzantine error tolerance is

"The math term that says, in reality we are more resistant to closure than other people".

For Baird, this resilience is crucial, especially in applications involving financial transactions, where a couple of hours of downtime would cause chaos.

Additional security protocols

When it comes to security, Baird's policy and hence Hedera's policy is "we can do it, so why not do it?" This means that additional levels of security are added even if the existing security measures are technically adequate.

While the Hedera team recognizes that there is no such thing as a foolproof security solution, they have taken extensive measures to make the hashgraph as safe as possible. In fact, Baird goes so far as to call their "excessive" security measures, explaining that Hedera is,

"At every level, in line with the CNSA security standard that the US government uses to protect its top-secret information."

It also employs

"TLS encryption of our communication between nodes"

that Baird says is not necessary since the signatures of the events have already been checked. Furthermore, Baird explained,

"We have activated the switch to activate the time keys, so we have the perfect secret."

Transaction speed

In addition to his security model, Simi Hunjan, a supporter of Hedera's developers, told Nunn that the speed of the transaction is another feature that distinguishes Hedera from other DLTs. For example, blockchain technology has not solved the scalability problem. Achieving a consensus on Bitcoin transactions, for example, can take over one hour, which leaves much to be desired in a retail atmosphere. In other cases of use, such as games, thousands of transactions must be executed each time, and blockchain can not do it.

Hashgraph, which uses a gossip protocol compared to Proof of Work, can reach speeds that the Bitcoin network can only dream of. & Nbsp;Hedera of& Nbsp;website& Nbsp;claims that the virtual voting algorithm of Baird

"It offers almost perfect efficiency in bandwidth usage, managing hundreds of thousands of transactions per second and verifying over one million signatures per second."

Compare& nbsp; the one for the three transactions per second of the Bitcoin network, the 20 per second of Ethereum, the 1,500 Ripple and the 3,600 per second of Visa, and the potential for a radical change is clear.

micropayments

The hashraph also allows micropayments, which has not been achieved by the blockchain. Micropayments are just as they seem: the exchange of small amounts of currency, such as a tenth of a cent, five cents or twenty-five cents, amounts that currently cost more in commissions to be sent than their actual value.

Harmon told Nunn that,

"As a technology, we see micropayments, the possibility of having ad hoc report micro-payments in real time and inexpensive as a killer app".

Harmon explains that currently, merchants selling products and services via APIs lose significant funds for credit card fees, as well as managing limited cash flow. Micropayments would allow instant and free transactions, which could radically change the way the business is done. For example, Hunjan referred to online ticket sellers, stating that customers are

"Probably paying a surcharge of $ 40 or $ 50 in addition to that, the costs to actually purchase that ticket."

He explained that micropayments could be used as a means of reducing the surcharge.

The potential of Hashgraph has an impact on society

Based on interviews with the Hedera team, micropayments could be the first and biggest impact of the hashgraph on how the value is traded. For example, rather than paying flat rates for cable TV service or monthly subscriptions, an integrated mechanism for charging and collecting small payments for the use of a service or, say, TV channel could come into play.

Hedera has already figured out how to create micropayments in browser extensions. Baird explained,

"We insert small tags into the [web]the page and extension of Chrome can see those tags and can handle them. So it's smooth and low-friction for the user and for the developer. "

Likewise, micropayments can be integrated online& nbsp; games in such a way that little or no effort is required by the customer or supplier. In theory, it could mean a simpler and cheaper payment system. If transaction fees are eliminated from the equation, both customers and suppliers save money. If these transactions are automated in such a way that neither the customer nor the supplier has to offer efforts to spend or collect, time and therefore money are saved.

For such a system to work, it must be streamlined and secure. With the asynchronous Byzantine error tolerance, the challenge remains to make it "friction-less" for users. That is, to request the minimum effort and hassle of sending and receiving payments within the game or the app or website, ensuring privacy. At this point, Baird told Nunn that Hedera's team is

"Do everything possible to make it extremely easy for the developer to make it invisible to the user or almost invisible to the user."

Oliver Bolton, founder and CEO of Almond, sees Hedera's hashgraph as a means of reforming the economic structure that has led to widespread environmental destruction and the deterioration of individual and social health. Bolton spent two years creating an SU for Hedera that encourages the purchase of products that have been produced in a sustainable and responsible manner.

Defense of developers

With a& Nbsp;vision& Nbsp;to be "the fastest, most widely distributed, safest, enterprise-level public book in the world," Hedera's team has a lot on his plate. & nbsp; The company has also done a lot to position itself for success, perhaps above all to make it accessible to developers. Consider Microsoft, that& Nbsp;created a developer community and provided many (and free) tools for developers to implement Microsoft solutions.

Likewise, Hedera encourages the participation of developers. While Hedera is not open source like many blockchain projects, it's an open review. In the interview, Harmon explained the distinction and the reasons for the company to give up an open source approach:

"It's not that developers have to come to us and talk to us to be able to build on the platform and get a license or something … No, it's just using the platform, no license is required. We will not even know that you are using the platform as a developer unless you decide to share with us the fact that you are, so in these two ways it is very similar to everyone else in the market, but since it is patented, we can commit to market that does not intend to forge in. It's not an open license, it's an open review … "

Chief Developer Advocate for Hedera, Ken Anderson, compares Hedera's approach to creating a developer community with that of IBM's blockchain. Anderson, an entrepreneur and a veteran of software architecture, told Nunn that,

"We are actually developing a lot of the same kind of tools and the same kind of documentation, community support and the creation of those strategic relationships that, as you know, IBM and the hyper-conducting textile community have built".

While it may just be a matter of time before the next advance in DLT, the hashgraph is moving the field forward. The impact of micropayments and a distributed public ledger on how our society and the economy work are currently unknown, but it does not take much imagination to imagine many ways in which a register distributed without trust with characteristics of speed and security could transform various sectors. Exactly how that distributed register will work … well, we'll leave it to the Baird & # 39; s and the Harmon & # 39; s of the world.

">

Will Blockchain take a seat on Hashgraph's back seat?

Blockchain, the technology behind Bitcoin, is explored in many areas that seek to bring transparency, immutability and efficiency to the table. Major retailers and companies like IBM and Wal-Mart are pursuing a variety of technology applications. Even the smallest and most independent companies are abundant. Use cases range from supply chain monitoring, land ownership documentation and redefinition of health care.

Despite the clamor, and like any new technology, blockchain is not without deficit. Now, thanks to an algorithm invented by Leemon Baird, distributed ledger technology (DLP) is going beyond the limits of the blockchain. It seems possible that the solution to the unresolved blockchain challenges may lie in what Baird calls "hashgraph".

What is a distributed ledger?

Those familiar with blockchain know that technology is just one type of DLT. DLT refers to systems that use consent algorithms to replicate data across multiple sites or nodes. In other words, data is processed by each node on the network rather than through a central hub.

Based on the results of each node that processes the data, a consensus can be reached to validate the data. The consent is stored in each node. With blockchain, data is stored in blocks connected in a chain. However, not all DLTs store data in blocks, and not all DLTs have the same qualities, as well as having a distributed ledger structure.

Presentation of hashgraph

Baird, the inventor of hashgraph, has spent over two decades as an IT expert. He co-founded several startups – the most recent, a startup called Hedera, based on its hashgraph algorithm. Co-founder and CEO of Hedera, Mance Harmon is a technology entrepreneur and researcher. The two worked together for many years, including the co-founder of Swirlds, a development platform for hashgraph applications.

Several Hedera team members, including co-founders, chatted with Forbes contributor Jefferson Nunn at the Hedera18 Hackathon on what hashgraph and Hedera have to offer.

The problem of trust

Just as Bitcoin was created to allow peer-to-peer transactions and eliminate the need for a third party, hashgraph is

"A way for people who do not know each other or trust one another to cooperate securely and make online transactions without the need for a trusted intermediary".

As described a little more in detail by Baird and Harmon on the website of Swirlds:

"The goal of a distributed consent algorithm is to allow a community of users to reach an agreement on the order in which some of them have generated transactions, when no single member is considered reliable by everyone. way, it's a system to generate trust, when people do not already trust each other ".

Currently, most online transactions involve a third party due to lack of trust. However, third-party involvement often complicates and slows down transaction processes. Furthermore, these third parties are not infallible and their centralized structure presents inherent risks.

Security through decentralization

Current data and transaction systems are based on centralized servers. For example, all transactions of a bank pass through a central server. All data collected by Google are recorded in a central location. This structure, unfortunately, is vulnerable in terms of hacking and corruption. The proof of this vulnerability is clear with sixteen major retailers and their customers hit by hack since January 2017, along with elections and relative votes tampering. Security-conscious cryptocurrent holders avoid centralized exchanges because of this same risk.

In his paper"Dictatorship, democracy and blockchain ", explains Harmon when data is stored in a centralized location, the risks of cybercrime are higher. With a singular attack on the central servers, hackers can cause enormous damage. In addition, Harmon points out that control and ownership of data is concentrated in the hands of a few with centralized systems, which can facilitate the abuse and manipulation of data.

According to Harmon, the registries distributed as hashgraph and blockchain mitigate these risks as

"

With multiple nodes that verify transactions and store data, tampering becomes much more complex. Modifying data on a node would not affect the network; rather, each node should be modified individually. Furthermore, a single hack has no effect on every node, which prevents another big problem: network shutdowns.

Resilience of the network through tolerance to asynchronous Byzantine errors

As Baird said to Nunn,

"… it's nice to have a wonderful network, but if someone could easily switch off the entire network for hours, it's not that good."

The hashgra algorithm provides a higher level of network resilience than traditional centralized data storage and blockchain.

The mechanism underlying the hashgraph resilience is the tolerance to Byzantine failures, the holy grail of security in the world of DLT. As Harmon told Nunn, Byzantine fault tolerance is a 30-year concept in the academic field, but

"[w]the novelty of hat is the ability to make it on a large scale "

that's what Baird realized.

Second Blockonomi,

"[I]n a distributed, Byzantine Fault Tolerance system refers to the system's ability to maintain an honest consensus in the network despite the malicious nodes failing or propagating false messages. "

Harmon explained to Nunn that

"The asynchronous part is the important part"

the key to why

"In terms of security, the hashgraph algorithm reaches the gold standard in the field of distributed consent".

The asynchronous factor, according to Baird, refers to all the nodes that are equal; that is, the absence of a leader who could be targeted by attackers.

In the words of Baird, the asynchronous Byzantine error tolerance is

"The math term that says, in reality we are more resistant to closure than other people".

For Baird, this resilience is crucial, especially in applications involving financial transactions, where a couple of hours of downtime would cause chaos.

Additional security protocols

When it comes to security, Baird's policy and hence Hedera's policy is "we can do it, so why not do it?" This means that additional levels of security are added even if the existing security measures are technically adequate.

While the Hedera team recognizes that there is no such thing as a foolproof security solution, they have taken extensive measures to make the hashgraph as safe as possible. In fact, Baird goes so far as to call their "excessive" security measures, explaining that Hedera is,

"At every level, in line with the CNSA security standard that the US government uses to protect its top-secret information."

It also employs

"TLS encryption of our communication between nodes"

that Baird says is not necessary since the signatures of the events have already been checked. Furthermore, Baird explained,

"We have activated the switch to activate the time keys, so we have the perfect secret."

Transaction speed

In addition to his security model, Simi Hunjan, a supporter of Hedera's developers, told Nunn that the speed of the transaction is another feature that distinguishes Hedera from other DLTs. For example, blockchain technology has not solved the scalability problem. Achieving a consensus on Bitcoin transactions, for example, can take over one hour, which leaves much to be desired in a retail atmosphere. In other cases of use, such as games, thousands of transactions must be executed each time, and blockchain can not do it.

Hashgraph, which uses a gossip protocol compared to Proof of Work, can reach speeds that the Bitcoin network can only dream of. Hedera of website claims that the virtual voting algorithm of Baird

"It offers almost perfect efficiency in bandwidth usage, managing hundreds of thousands of transactions per second and verifying over one million signatures per second."

Compare for the three transactions per second of the Bitcoin network, the 20 of Ethereum per second, the 1,500 of Ripple and the 3,600 of Visa per second, and the potential for a radical change is clear.

micropayments

The hashraph also allows micropayments, which has not been achieved by the blockchain. Micropayments are just as they seem: the exchange of small amounts of currency, such as a tenth of a cent, five cents or twenty-five cents, amounts that currently cost more in commissions to be sent than their actual value.

Harmon told Nunn that,

"As a technology, we see micropayments, the possibility of having ad hoc report micro-payments in real time and inexpensive as a killer app".

Harmon explains that currently, merchants selling products and services via APIs lose significant funds for credit card fees, as well as managing limited cash flow. Micropayments would allow instant and free transactions, which could radically change the way the business is done. For example, Hunjan referred to online ticket sellers, stating that customers are

"Probably paying a surcharge of $ 40 or $ 50 in addition to that, the costs to actually purchase that ticket."

He explained that micropayments could be used as a means of reducing the surcharge.

The potential of Hashgraph has an impact on society

Based on interviews with the Hedera team, micropayments could be the first and biggest impact of the hashgraph on how the value is traded. For example, rather than paying flat rates for cable TV service or monthly subscriptions, an integrated mechanism for charging and collecting small payments for the use of a service or, say, TV channel could come into play.

Hedera has already figured out how to create micropayments in browser extensions. Baird explained,

"We insert small tags into the [web]the page and extension of Chrome can see those tags and can handle them. So it's smooth and low-friction for the user and for the developer. "

Likewise, micropayments can be integrated online games in such a way as to require little or no effort from the customer or supplier. In theory, it could mean a simpler and cheaper payment system. If transaction fees are eliminated from the equation, both customers and suppliers save money. If these transactions are automated in such a way that neither the customer nor the supplier has to offer efforts to spend or collect, time and therefore money are saved.

For such a system to work, it must be streamlined and secure. With the asynchronous Byzantine error tolerance, the challenge remains to make it "friction-less" for users. That is, to request the minimum effort and hassle of sending and receiving payments within the game or the app or website, ensuring privacy. At this point, Baird told Nunn that Hedera's team is

"Do everything possible to make it extremely easy for the developer to make it invisible to the user or almost invisible to the user."

Oliver Bolton, founder and CEO of Almond, sees Hedera's hashgraph as a means of reforming the economic structure that has led to widespread environmental destruction and the deterioration of individual and social health. Bolton spent two years creating an SU for Hedera that encourages the purchase of products that have been produced in a sustainable and responsible manner.

Defense of developers

With a vision to be "the fastest, most widely distributed, safest, enterprise-level public book in the world," Hedera's team has a lot on his plate. The company has also done a lot to position itself for success, perhaps above all to make it accessible to developers. Consider Microsoft, that created a developer community and provided many (and free) tools for developers to implement Microsoft solutions.

Likewise, Hedera encourages the participation of developers. While Hedera is not open source like many blockchain projects, it's an open review. In the interview, Harmon explained the distinction and the reasons for the company to give up an open source approach:

"It's not that developers have to come to us and talk to us to be able to build on the platform and get a license or something … No, it's just using the platform, no license is required. We will not even know that you are using the platform as a developer unless you decide to share with us the fact that you are, so in these two ways it is very similar to everyone else in the market, but since it is patented, we can commit to market that does not intend to forge in. It's not an open license, it's an open review … "

Chief Developer Advocate for Hedera, Ken Anderson, compares Hedera's approach to creating a developer community with that of IBM's blockchain. Anderson, an entrepreneur and a veteran of software architecture, told Nunn that,

"We are actually developing a lot of the same kind of tools and the same kind of documentation, community support and the creation of those strategic relationships that, as you know, IBM and the hyper-conducting textile community have built".

While it may just be a matter of time before the next advance in DLT, the hashgraph is moving the field forward. The impact of micropayments and a distributed public ledger on how our society and the economy work are currently unknown, but it does not take much imagination to imagine many ways in which a register distributed without trust with characteristics of speed and security could transform various sectors. Exactly how that distributed register will work … well, we'll leave it to the Baird & # 39; s and the Harmon & # 39; s of the world.

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