Before we get into what Hashgraph is, let’s talk about what a blockchain is.
A blockchain, simply put, is a chain of blocks sequentially linked together. Therefore, each block is directly connected to two other blocks, one preceding it and one following it.
Specifically, in Bitcoin, there is the proof-of-work mechanism so that any miner who wants to publish a block builds it and uses a significant amount of computational resources to show that it is trustworthy.
Furthermore, this mechanism ensures that only one block is published every ten minutes. Ethereum also follows a similar procedure, but a new block can be released every few seconds.
Here, when two miners publish a block at the same time, by consensus in the network, only one block will be accepted. Thus, wasting the efforts and energy of the left-out miner because he would not receive the block reward – an incentive to keep the miners working.
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Hashgraph overcomes this problem. It allows any number of blocks to be published at a time. Furthermore, it does not use a proof-of-work mechanism.
This means faster transaction confirmation – which is why Bitcoin is often condemned for being slow. However, the implementation of Lightning Network can change Bitcoin's scaling problem.
Hashgraph Alone is a data structure plus a consensus algorithm. In other words, it defines how data should be stored, retrieved, and managed; and it specifies how a distributed network under its implementation should work.
Unlike many cryptocurrency projects, which are mostly open source and completely free, Hashgraph is an intellectual property of Swirlds
, a platform built for distributed applications.
However, Bitcoin's free-to-use nature has given rise to many famous projects: Ethereum, Litecoin, and Zcash, all of which started out using Bitcoin's codebase and added extra features.
Hedera Hashgraph HBAR
An open platform like Ethereum is being built using Hashgraph, which is nothing more than Hedera Hashgraph's HBAR coin. The platform will have three types of services to offer: cryptocurrency, file storage, smart contracts.
Anyone can use the platform for free and without restrictions. One can maintain a full node and can get paid for it; however, some funds are required.
In Hashgraph, a node only stores the balances of non-empty addresses. This way, storing large amounts of transactional data is not necessary.
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Conclusion
Hashgraph is a groundbreaking technology in the cryptocurrency space. Despite this, it is not open source and not everyone can experiment with the algorithm.
Bitcoin and Ethereum have been around for a long time, and their reputations have been tested many times. That said, Hashgraph doesn’t see much real-world use yet. Only then can we know how it’s better. Otherwise, it would be a great technology without being an effective problem solver.