Everything about Hedera Hashgraph
Bitcoin was the first application of blockchain that did not require any central authority to perform the transactions. Though Bitcoin operates transparently, it takes more than one hour to complete one transaction.
Therefore, the transactions made on the blockchain platform take a lot of your time. The problems that blockchain could not overcome introduced a new technology, “Hedera Hashgraph.”
Hedera Hashgraph can rule blockchain development. Read further to understand why.
What is Hedera Hashgraph?
Hedera Hashgraph is a distributed ledger technology which has a new form of distributed consensus. It provides a fast, fair and secure infrastructure to run Decentralized applications (dApps).
It has significant implications for both public and private distributed ledger technology use cases, including cryptocurrency and dApps due to its:
- lightning-fast throughput
- asynchronous Byzantine Fault Tolerance backed by mathematical proofs
Unlike some blockchain-based platforms, it doesn’t require compute-heavy proof-of-work.
Being faster, secure, and fairer than blockchain, Hashgraph is a data structure based on two unique techniques, i.e., Virtual Voting and Gossip about Gossip.
What are the properties of Hashgraph?
Three unique properties of Hedera Hashgraph are:
It uses the uniform time-stamping technique that makes it fairer than all other algorithms.
With an asynchronous Byzantine Fault Tolerant System, neither a member can stop the community from reaching a consensus nor change after it has been reached.
It can handle more than hundreds of thousands of transactions and verify over a million signatures per second.
How does Hedera Hashgraph work?
Hedera Hashgraph works on the following two protocols:
- Gossip about Gossip
- Virtual Voting
Gossip about Gossip
Gossip about Gossip is one of the popular concepts in networking—gossiping means to spread a piece of information to another person who is not aware of it yet.
Do you know how Gossip reaches from one person to another in real life? For instance, John speaks something to Robert and Robert then conveys the same message to Bob, and Bob says it to someone else and so on.
Gossip about Gossip also works on the same set of rules.
- Every Gossip contains a bit of information attached to the hashes of the last two people to whom you talked.
- Therefore, every node in Hashgraph expands the signed information on new transactions and transactions received from other nodes to your randomly chosen neighbor nodes.
- The randomly selected adjacent nodes combine these newly created events with the piece of information received from the last nodes, and a new event is created.
- The entire cycle goes on repeatedly until all the nodes in Hashgraph get the same information.
Let us understand this concept clearly with the help of an example.
Suppose there are four persons namely Patrice (P), Quain (Q), Robert (R), and Scott (S). Quain decides to gossip with Scott randomly. It means that Quain is giving Scott all those events that Scott does not know yet. Scott acknowledges and creates a new event at the peak of his previous event.
Suppose now Scott decides to gossip with Quain again.
Now, Quain has received three events out of which the first two events are of Quain and Scott while third event Scott has created the third event. By gossiping and interacting with each other, Hashgraph looks like as follows:
Virtual voting is defined as the way a node gets to know whether the transaction is valid or not. If any transaction has 2/3rd of the node as a witness in the network, then it is a valid transaction. No matter if a third node turns Byzantine, the algorithm would still perform its function because Hashgraph is based on Byzantine Fault Tolerant System. The voting takes place over plenty of rounds.
Let’s assume that the Hashgraph has total four rounds of voting. As soon as a new event is produced, you will get to know which voting round it is associated with.
Ensure to look at Robert’s column.Robert’s first events on each round are R1, R2, and R3. Robert does not have any event in 4th round recently, but he will get one when he will proceed further. The first events of Robert are also termed as witnesses.
For every witness, one needs to evaluate whether it is a famous witness or not. For instance, to check whether Q2 is a famous witness or not, the witnesses in the next rounds are P3, Q3, R3, and S3. Let’s have a look at the different parts of voting to understand how virtual voting works.
Each of the witnesses of the next round, i.e., third round need to vote in an election to know if Q2 is famous or not. To find out the same, determine if they are descendants of the node Q2 or not.
The diagram makes it clear that P3 can approach Q2 directly. So, P3 is a descendant of Q2. In the same way, Q3, R3, and S3 can trace their linking back to Q2. Therefore, all four witnesses have counted YES vote. Now, the counting of votes has to be done by the witnesses in the next round.
Q4 will now have to collect votes from the different witnesses. Q4 needs to follow the condition of “strongly seeing” for collecting the votes. The “strongly seeing” condition is defined as follows:
- More than one path should be there for going from Q4 to one of the witness nodes.
- The path also requires passing a supermajority. A supermajority is defined as any number which is more than 2/3rd of the population. Because the population is 4 in this case, supermajority will be 3
The diagram shows it clearly that Q4 can strongly see P3 and the other nodes till S3. So, the witnesses that gave vote as “Yes” get strongly seen by Q4. Finally, Q2 is declared as a famous witness. The concept of virtual voting exactly works in a similar manner.
What is Hedera Consensus Service?
Hedera Consensus Service, available on the Hedera Mainnet, allows developers to:
- Create verifiable time-stamps
- Create ordered events for any application.
Hedera Consensus Service is really useful for applications that need transaction ordering without middle-men, high output with conclusiveness in ordering, auditability or testability in real-time and privacy controls which are specific to the application.
Hedera Consensus Service can have various use cases across numerous industries like supply chains, advertising etc. Hedera Consensus Service can be used by:
- Traditional Applications
- Blockchain frameworks like Hyperledger Fabric, R3’s Corda, etc.
What are the services offered by the Hedera Hashgraph platform?
1. Token Service
Hedera Hashgraph’s Token Service is designed to configure, mint and manage fungible and non-fungible tokens without requiring to deploy a smart contract. It offers high-throughput, on-chain programmability and native compliance configurations to deploy faulty and expensive smart contracts.
Benefits of tokenizing on Hedera Hashgraph Network:
- Native tokens
Creating tokens on the Hedera Hashgraph network does not require slow, faulty and expensive smart contracts. Instead, tokens issued with the Hedera Token Service are native to Hedera.
Tokens on the Hedera implement the same security and performance as Hbar.
- Security Audit
FP Complete performs independent third-party security audits for the Hedera ledger software and Hedera Token Service.
Non-fungible and fungible tokens deployed using the Hedera Token Service provide native programmabilities, such as scheduled transactions and atomic swaps for on-chain functionality.
- Low fees
Hedera Token Service provides low transaction fees on the Hedera public network. It charges less than 1USD to transfer any tokenized asset on the Hedera network.
- Enterprise Governance
Hedera’s decentralized governing body of worldwide organizations ensures decentralized decision making, network stability and a no-fork guarantee.
- Configurable Compliance
Key and token configurations at the account level provide the flexibility to meet compliance needs, including token supply management, transfer, KYC verification and freeze and more.
2. Consensus Service
The Hedera Consensus Service (HCS) acts as a trust layer for any permissioned network and enables verifiable and immutable records of messages. Application messages are sent to the Hedera network for consensus with a fairly ordered and trusted timestamp. Hedera Consensus Service is used to deliver decentralized trust for any existing or new app across every industry. Also, it can be used as a decentralized ordering service.
Using HCS, you can encrypt the content of confidential messages for strong privacy. Using HCS API, you can build applications that leverage the benefits of high-throughput, fast finality and fair ordering of Hedera Hashgraph.
Use Cases of Hedera Hashgraph network
The Hedera Token Service provides organizations an opportunity to leverage the disruption of public distributed ledgers for payments in a compliant and secure way. It includes enhancing payment settlement efficiency and enabling liquidity for already growing and new markets.
Both Hedera Token Service issued tokens and hbars take seconds to settle as compared to the VISA network. It makes stablecoins, hbars and other cryptocurrency transactions an ideal option for finance and commerce. It costs less than $1 to transfer any tokenized asset on Hedera.
- Tokenized Assets
The Hedera Token Service provides the ability to configure, mint and manage both NFTs and fungible tokens on Hedera with ease and without requiring to deploy a smart contract. Tokenized assets include everything from regulated securities to decentralized governance tokens.
- Data Compliance
Regulations force companies to take data compliance seriously but proving actions to customers is essential to build trust. There is no way to prove to the customer that data has been managed and enforced. The solution is to bring trust around data compliance by offering an auditable log of actions taken.
It allows you to standardize your compliance data and the auditing process with data integrity and trust.
- Fraud Mitigation
Hedera Hashgraph platform helps reduce costs, mitigate fraud and bring trust among all stakeholders of digital transactions and online applications.
It provides business applications with the tools to handle credentials through their lifecycle in a secure way. The Hedera network ensures all participants are trusted and related systems have a real-time view of transactions used to detect fraudulent activities and predictive analysis.
To build applications that can scale to millions of users and continue to perform, Hashgraph promises to deliver all of it. Hashgraph could be the next generation of blockchain technology that can help build applications that require speed, efficiency and high security.
LeewayHertz has a team of highly experienced professionals who have an in-depth knowledge of the emerging Hedera Hashgraph technology. We help businesses by building cutting-edge and secure applications using Hashgraph.
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