Hedera Hashgraph derives its name from an algorithm. It is based on the "consensus of the hashraph" technology that circumvents the big blockchain trade-off, the fundamental technology behind cryptocurrency. Blockchain can be fast but not safe, or safe and slow. Hedera Hashgraph aims to build a safe alternative and secure blockchain.
This is not a compelling argument for many people, but it may surprise you to know that the company has just raised $ 100 million. He raised the money through a future sale of tokens by institutional investors, and Hedera will use the money to create a new commercial network based on its "hashraph" consensus technology.
Mance Harmon, the company's CEO based in Dallas, Texas, will use the money to build the Hashgraph network and create a micropayment system that uses basic technology. Put simply, the company hopes to stop the financial systems of the world, Harmon said in an interview with VentureBeat this week.
"As technology, it is a fundamental advancement in the world of distributed systems," said Harmon in an interview with VentureBeat. "It has fantastic performances and gets the best security you can have on the field."
He added: "Small systems have achieved this result in the past, but never in scale Bitcoin has had terrible performance, but it is reasonably safe, it was always a compromise What the hashgraph does for the first time is to break this trade -off, maximizing both security and performance. "
I was fascinated by the story that Harmon told me about how hashgra technology could one day be used to handle millions of transactions per second
Mance Harmon is CEO by Hedera Hashgraph. "width =" 1024 "height =" 690 "data-recalc-dims =" 1 "/>
] VentureBeat: the sum of money in fundraising here ($ 100 million) is surely a revelation.Would you take a bad turn explaining me Hashgraph?
Mance Harmon: As technology, it is a fundamental advance in the world of distributed consent. fantastic performances and get the best in terms of security that can be achieved in the field.
In distributed systems, academically, there is a gold standard for safety called asynchronous Byzantine error tolerance This notion of asynchronous BFT has existed for decades. they were small systems that reached them, but it was never scalable. "Here is what Hashgraph does.
If you look at the rest of the market, there is a trade-off between performance and security. he has terrible performances, m in some ways it's quite safe. At least it is safer than what we have in closed or licensed networks, where job tests are released and they get much better performance, but security is significantly worse. There are new categories of attacks.
What Hashgraph does for the first time is to break this compromise and maximize both at the same time. It achieves the best security you can get – theoretically there is nothing better – and maximizes performance. It is not possible to improve in terms of performance compared to what we are doing if we maintain the same level of security. This is the value proposition, if you want, Hashgraph's contribution.
VentureBeat: What is the origin of this?
Harmon: Leemon Baird is my co-founder. He has a Ph.D. in Carnegie Mellon in computer science. He and I have been working together for 25 years. We grew up together in the Aeronautica Militare and we succeeded by appointment, then becoming entrepreneurs. In 2012 he went to work on this problem of achieving large-scale asynchronous BFT. Coincidentally, Bitcoin was coming at that time, but there is no inspiration in this from Bitcoin. It is a completely separate and orthogonal path to the Hashgraph.
He worked there for years and in 2015 he took a step forward that allowed us to reach that goal, that vision. This is what today we call the Hashgraph. It was invented by Leemon and in 2016 published a technical report at the academic level. It is available for years for review.
VentureBeat: When did you start the company?
Harmon: Almost immediately. In 2014 he was working on it and we were thinking about the implications of what could be done, if he was able to solve that problem. Naturally then, in 2014, the Bitcoin mania was in full swing. What was interesting for us is that Bitcoin created the market for Hashgraph, even though Leemon did not start with the vision of creating a distributed cryptocurrency. His vision was much wider than that. Bitcoin created the market, but this was a case for his research. He was just doing research because it was a big math problem.
He had the discovery in spring, maybe May, of 2015, innovation, and then he formally demonstrated it, in a mathematical sense. We got our first funding to kick off the company in the fourth quarter of 2015.
VentureBeat: when you were looking for money at the time, it was relatively to find that funding, or you had to do a lot of work ?
Harmon: It was quite easy, due to Bitcoin. So, you probably remember. Blockchain as a term was relatively new. Bitcoin was at the top of the cycle of hype, but blockchain as a term was new. Everyone believed there was enormous potential here, though. We did not do an ICO or a cryptocurrency or something. We have obtained a traditional VC financing. Since the first presentation, there has been tremendous interest.
We quickly closed some loans for that company, which was Swirlds. It is worth mentioning that there are two different companies here. Swirlds is what we started in 2015. We first dealt with licensing networks for business use cases. This is supported by VC, led by New Enterprise Associates. And then last year, last summer, we got to a point where we had enough market validation for the technology and enough traction in Swirlds, that we realized we could start to think of a public ledger.
We approached this very differently from the rest of the market. Most of the market started with public records. If you look at the big platforms today, they started with the public registers and then entered the company space with the variant of the authorizations, where they got rid of the work tests and replaced them with a less secure algorithm. We went in the opposite direction. We had the safest algorithm for the business, and then we decided to create the public ledger.
There was a logic behind that, because of our vision of how a public ledger should be. This has everything to do with this advice we can talk about. But this is the story here. Last fall we shot Hedera Hashgraph from Swirlds. Hedera Hashgraph is focused on creating this public ledger. He has his own body of government. It is a separate organization with a different market and different use cases. Swirlds continues to focus on permits and business use cases.
VentureBeat: How did you raise the money, then? Is it a qualified investor's money, or is it a bigger group than that?
Harmon: If you're talking about Swirlds, it was just traditional VC. If we are talking about Hedera Hashgraph, it is only accredited, and institutional.
VentureBeat: But it's not a token sale, an ICO.
Harmon: It is not an ICO, but it is what we call SAFT, a simple agreement for future tokens. It is not equity in the company. It is an investment, a security in the technical sense. But it will convert to token for the public network. Today there are no tokens, technically. They have not been generated. There's a whole discussion here on the regulatory environment and on the SEC, on how we go from where we are today to a broad distribution of the token in the future when it's not a security.
VentureBeat: What is the regulator-friendly nature of this, then?
Harmon: We are as clean as you can. The metaphor we use is a bridge. Before getting on the bridge, we are raising funds. The money we have collected is SAFT, which is clearly a security. Once we get on the bridge, we are not taking more money. The definition of stepping on the bridge is that we stop raising funds through the use of SAFT and create tokens. We have a token generation event.
C & # 39; is a period of operation of the network for at least six months, a reasonable amount of time, and then exit the bridge is when we open the network for general public use. The network will be operational while we are on the bridge, but will be limited to developers, partners who create applications. It is a closed environment. When we open it widely to the public, we descend from the bridge, and then the tokens are on the market. At that point, our expectation is that they will not be considered a security.
VentureBeat: And then do you have this advice, a governing body?
Harmon: The council is 39 blue-chip global organizations. The board of directors was designed to be the most decentralized governing body of any public platform. When I say this, I mean that we are choosing these board members to be representative of 18 sectors of activity. I'm not a bunch of banks doing two or three things. It is the entire market in 18 sectors and in all geographical areas. Today we have board members who have signed letters of intent from Australia, from Japan, from the United States, from Europe, from South America, from India – I think we miss the Middle East, but let's look also to the Middle East.
These are organizations representing tens of billions in market capitalization. These are the best companies in the world, with the best brands. Collectively they represent the entire market of potential use cases. Manage, through supervision, the organization. They are limited in duration, so it is not the case that they can be members forever. So they are geo-distributed, distributed on the market and limited to the term, so the representation will reflect the latest changes in the market over time.
By comparing this with other platforms, the justification for the statement that is the most decentralized is that this is not a group of major developers making all decisions, or a single foundation with few people in it, or a single company. This is designed to be the most decentralized government body of all public platforms. They have supervision over all areas of the business. It's like an advice, except that there will be subcommittees. There will be an executive board of directors, and then subcommittees for legal and regulatory matters, a technical steering committee, coordinated marketing and PR, and so on, this type of committee which, through a counseling function and a supervisory function, will help we build a world-class global organization.
VentureBeat: how would you say you have collected so much money here?
Harmon: It is a revolutionary technology. It is the best technology on the market. It's two things, right? See how it compares in terms of performance. Today Bitcoin processes approximately five transactions per second. Today, Ethereum can process 15-20 transactions per second. What we are demonstrating is millions of transactions per second.
It is the difference between a calculator and a computer. If you think about the range of applications you can do with a computer, this is where we find ourselves today with the first generation of distributed consent. When you hit thousands, open up a whole new range of use cases.