Blockchain vs Hedera Hashgraph

Which is the superior Distributed Ledger technology?

Bitcoin came into existence in 2008 and introduced a digital currency to the world which was based on the blockchain. The technology introduced a new monetary system that utilized the distributed ledger system.

Relying solely on a peer-to-peer network, the distributed ledger technology (DLT) presents a better model which could help industries harness computing power like never before. As we are moving ahead of the client-server compute model, we have come closer to the new trust layer of the internet.

The transition is still limited due to the problems yet to be solved around scalability, efficiency and interoperability. Founded by Leemon Baird, the co-founder and CTO of Swirlds, Hashgraph has come as an alternative to the blockchain with its features like security, fairness, cost and speed.

This article is intended to understand the difference between the two different DLTs, i.e., Blockchain and Hashgraph.

In this article, we shall first discuss the following points:

Author’s Bio

Akash Takyar
Akash Takyar
CEO LeewayHertz
Akash Takyar is the founder and CEO at LeewayHertz. With the experience of building over 100+ platforms for startups and enterprise allows Akash to rapidly architect and design solutions that are scalable and beautiful.
Akash's ability to build enterprise-grade technology solutions has attracted over 30 Fortune 500 companies, including Siemens, 3M, P&G and Hershey’s. Akash is an early adopter of new technology, a passionate technology enthusiast, and an investor in AI and IoT startups.

A distributed ledger database is described as the ledger of any transactions or shared contracts, synchronized and maintained in decentralized form across different locations and people (nodes), eliminating the need for a central authority.

All the information on the distributed ledger (DL) is stored securely and accurately, kept immutable using cryptographic techniques. While the centralized ledgers are prone to cyber-attack, it is difficult to attack DLs because all the nodes will have to be attacked and manipulated simultaneously.

Underlying the distributed ledger technology is the Blockchain and Hedera Hashgraph, which use different data-structure and consensus mechanism to maintain Distributed Ledger Database.

The blockchain is a first generation Distributed ledger technology, working on a Sequential Data Structure which forms a sequence of Blocks.
Every time a new block is generated gets added on top of the last block.

Each block contains a set of transactions.

Blockchain relies on consensus mechanism such as ‘Proof of Work’ or ‘Proof of Stake.’

Proof of Work: It is the consensus mechanism which requires solving a puzzle by computation to bring a consensus in the network and secure the block.

Proof of Stake: It is a consensus mechanism in which a creator/validator is chosen to verify and add the block to the blockchain on the basis of coins they hold.

Proof of Elapsed Time: By following a fair lottery system, it prevents the network from high energy consumption and resource utilization. Often used on permissioned networks where participants have to identify themselves before joining the network, the algorithm offers the fair winning chances.

Practical Byzantine Fault Tolerance (PBFT): PBFT emphasizes the state machine. Though it can duplicate the system, it can prevent the network from Byzantine General Problem. Designed for asynchronous consensus systems, the nodes in the system are organized in a certain order. It can validate the transaction without any confirmation as required in proof of work algorithm.

Blockchain: Smart Contracts Immutability

Smart contracts deployed on the blockchain network are immutable. It means that the code and address of the smart contracts cannot be edited or modified once written permanently on the blockchain.

But a new contract can be used instead, which is similar to modifying a smart contract. Also, an intermediary smart contract can be updated that can hold the address of the current active smart contract with a function “delegatecall”.

The function used in a new intermediary smart contract would redirect all the transactions and calls to the active version.

An alternative solution is to just extract the information from the previous contract and add it into a new one. Update the address that you want your users to see.

Hedera Hashgraph is based on Distributed Ledger technology like Blockchain that works on Graph like Structure where all the nodes communicate their information to each other, and their communication is reported by building a graph of connections.

All the information or data is stored in events.

It relies on ‘Gossip about Gossip’ and ‘Virtual Voting’ mechanism to bring consensus to the network.

Gossip about Gossip:

Gossip means to transfer or sync information from one node to another random node.
In Gossip about Additional Gossip information, i.e., the previous information along with the new data is transferred from one node to another arbitrary node.

Virtual Voting:

Using Gossip about Gossip mechanism, each node is already aware of what the other node knows, and each node can predict what the other node would vote, which results in electronic voting or virtual voting.

Hedera Hashgraph Platforms

  • Open Source SDK
    Hedera Hashgraph is a next-generation distributed ledger platform that has released an open-source SDK for developers in Java. It allows developers to build Hedera Hashgraph applications.


    Hedera’s open-source SDK supports three services on the platform, including file storage, smart contracts and cryptocurrency. The SDK offers all the necessary tools for creating public/private key pairs and signing transactions. 


  • Mainnet testing platform
    Hedera Hashgraph has recently announced the second phase of the Community Testing Program for the Hedera Platform. This testing program allows users and developers to test various network capabilities before the mainnet open access.In collaboration with phase II testing, the company would make Android and iOS versions of the Hedera wallet, Hedera Browser Extension and WordPress plug-in open-source.


    These applications will be used in community testing phase to test P2P micropayments and allow developers to create use cases for the Hedera network services.

Transaction Confirmation Methods on Hedera Hashgraph 

Once a client makes a transaction on the Hedera, they may seek acknowledgment that the transaction was added to a consensus state. For example, if you have to transfer Hbars for buying the coffee, the coffee shop will require confirmation that they received the payment from the customer before the over-priced latte is poured.

Hedera Hashgraph offers the following confirmation mechanisms that anyone can choose from:

  • Response:
    When a client submits a transaction to a specific node with a request that the transaction should be submitted to the network, the node will quickly check the transaction and respond with the result to the client before it is submitted. The check determines whether a transaction is structured and the client can make payment for fees associated with it.

    If a check is found to be “OK,” the node will add the transaction to the network. The response sent by the node to the client is a confirmation that the honest node will add the transaction subsequently to the network. From this confirmation, the client can be confident that the transaction will change the consensus state.

  • Receipt:
    After a transaction is submitted to the network and successfully reaches consensus, nodes will be able to know that fact and make a “receipt” for it. The client who sends the transaction can ask a node for the transaction status by querying for the receipt of that transaction.A receipt provides minimal information – whether the transaction was added to the consensus state successfully or not and the identifier of the object.

HBARs: Hedera Hashgraph Cryptocurrency

Hedera Hashgraph platform uses a utility token called Hbar to grant token holders access to Hedera Hashgraph based distributed applications.

Hbar is designed to be fast, allowing micropayments and offering low network fees. Also, users on the Hedera Hashgraph are rewarded with Hbars for contributing to the launch of the node on the network. Hbar cryptocurrency has a wide array of use cases, including Digital Content Monetization and Influencer Activity Monetization. 

Hedera Hashgraph: Smart Contracts Immutability

Since smart contracts are software programs, they can also face challenges like bugs, uneven behavior in certain conditions and design flaws.

As smart contracts once deployed cannot be modified whether one has to fix a bug or add new functionality, the only option is to deploy a new contract to replace the old one.

But Hedera Hashgraph presents an optional mechanism to enable “binding arbitration” for smart contracts. No doubt that the Hedera Smart Contract would be immutable, but it can be changed if several parties designed by a smart contract developer agree.

While deploying a smart contract on Hedera, developers can have a choice to choose the contract’s subsequent mutability.

Another way is to deploy a contract with a list of the public key of arbitrators. It would allow arbitrators to edit the code of contract, add features, reverse particular transactions and fix bugs.

hashgraph vs blockchain

Hashgraph Vs Blockchain

CopyrightOpen SourcePatented
ConsensusProof of Work, Proof of Stake, Practical Byzantine Fault Tolerance, Proof of Elapsed TimeVirtual Voting
Security MechanismCryptographic HashingAsynchronous Byzantine Fault Tolerance
ApplicationsBitcoin, Ethereum, Hyperledger Blockchain Projects, EOSSwirlds
Speed100 to 1000 transaction based on the protocol implementation like ethereum, hyperledger etc.500,000 transaction per second
Asynchronous Byzantine Fault ToleranceFew implementation in Hyperledger are Byzantine Fault tolerance ready.100% compliance

Blockchain ensures that the data is not stored at an individual location and controlled by the single entity.

On the other hand, Hedera Hashgraph is also a distributed ledger technology that works on the above data structure and a better consensus mechanism that gives the benefit of Blockchain without its limitations.

The Hedera Hashgraph algorithm does not require Proof of Work or Leader Based Systems, and can also deliver low-cost and high performance without a single point of failure.

Also, Hashgraph does not need high computation power and electrical supply.

Every blockchain platform has a different speed in terms of transactions per second.

For example, Bitcoin can make 7-10 transactions in a second, Ethereum has potential to perform 15-20 transactions per second and Hyperledger Sawtooth can make thousands of transactions in a second.

Hedera Hashgraph allows hundreds of thousands of transactions per second, as the information travels exponentially.

Hedera Hashgraph also proves to be fairer than Blockchain as miners can choose the order of transactions, can delay them or even stop them from entering the block if necessary. But in Hashgraph, a consensus of a timestamp is used preventing individuals from changing the order of transactions.

Hashgraph is a promising technology, but it also comes with some limitations.

Currently, the technology has only been deployed in private and permission-based network. It is still to be tested and explored in public network.

In Gossip about Gossip technique when a node passes information to another node, there are chances that the closest nodes are malicious which may prevent the passage of information to other nodes.

The technology behind the Hedera Hashgraph is exceptionally intriguing, but its real potential and effectiveness will only be known once it is released to the public and non-permission based network.

At LeewayHertz, we have a created a workforce that has been building distributed ledger applications for multiple industrial use-cases.

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