We have already heard the term blockchain and cryptocurrency which caught up real quick this past year through word of mouth just to earn money at an exponential rate. But what’s actually behind it and how hashgraph will continue the legacy of blockchain in the future? Let’s find out. But before we talk about hashgraph, a brief about blockchain and its working will help in better understanding of the hashgraph and how hashgraph can improve the drawbacks of the current blockchain platform on which cryptocurrency are based.
When Satoshi Nakamoto was creating the first ever cryptocurrency, bitcoin, he had to find a way to transact between people without involving a third party. For example, if A wants to send money to B, the bank will debit the particular amount from A’s account and credit it to B’s account. Here, the bank is the third party. To remove the involvement of the third party, he created a proof of work (POW) system.
Hash graph has got a lot of attention recently. They claim to be very fast, secure, fair and be able to handle over 250,000 transactions per second. It is a new way of reaching consensus in a decentralized network through a voting algorithm in opposite to proof of work and proof of stake algorithms. The whole idea with a voting algorithm is that we have different nodes in the network and they all tell each other what they think has happened. This also means that transactions will be handled asynchronously as it doesn’t have to wait for a bunch of other transactions for validation. The issue with the voting algorithm is bandwidth because each node is sharing their thoughts for every transaction i.e. a two-way communication between nodes. So, voting algorithms are very good in theory as it is fast, secure but in practice, it is impossible because it is just so many messages that the network has to handle.
Shubham Jindal
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