Most people don’t understand the difference between hashgraph and blockchain but both of these innovations are important for the future of cryptocurrency.
Blockchain has been around for a while, but hashgraph is a new technology that offers some advantages over blockchain.
In this article, we will compare and contrast hashgraph and blockchain to help you understand the difference between these two important technologies.
What is blockchain?
The first use for blockchain technology was the cryptocurrency called Bitcoin. The goal of using blockchain to create a decentralized, trustless form of currency has been a great success. Blockchain uses cryptography and hash functions to create a permanent record that cannot be changed once it’s confirmed by the network.
One advantage of this immutable record is that banks can use blockchain technology to speed up transactions without compromising security. Banks will benefit from faster transactions and lower fees because they won’t have to invest in maintaining their own private ledgers.
However, there are some problems with blockchains:
The high costs associated with mining cryptocurrencies like Bitcoin mean that many people can’t afford to transact in cryptocurrencies at all. This becomes an even bigger problem when you consider that some people have a lot more hash-power than others, so a few individuals control most of the hash power on the Bitcoin blockchain.
Bottlenecks can form when there aren’t enough transactions to include in the blockchain, and this slows down the payment processing time even further.
What is hashgraph?
Hashgraph is a new distributed consensus algorithm that offers faster transaction speeds with better security than blockchains. In addition, hashgraph doesn’t require computational resources to create new transactions on the network. Hashgraph uses virtual voting and “Gossip about Gossip” to create consensus in an efficient way.
Virtual voting means that hashgraph doesn’t need proof-of-work like blockchains do because hashgraph can use “weight” to represent how much influence an individual has over the system. This also there are no mining fees like in a blockchain network.
Instead of miners, hashgraph uses “Gossip about Gossip” to maintain consensus in the hashgraph network. Gossip about Gossip works by having nodes tell other nodes when they see two different transactions taking place at roughly the same time (Lamport). This information is then shared with every node on the hashgraph so that every hashgraph member knows how much activity is going on in the system and can keep their own version of events synchronized with all other hashgraph members.
What are the advantages/disadvantages of hashgraph vs blockchain?
- The biggest advantage to hashgraph is its transaction speeds. Hashgraph has kept its promise to create a distributed consensus algorithm that performs hundreds or thousands of times faster than blockchains. Transaction speeds are important for people who want to use cryptocurrency for everyday purchases instead of just investing in it.
- Hashgraph doesn’t require costly mining operations, which keeps transaction costs low and also makes hashgraph more accessible to individuals that don’t have a lot of hash power or money to invest in hash power.
- The hashgraph consensus algorithm is faster than blockchain technology because virtual voting is almost instant, which means gossip about gossip can happen much faster (Swirlds).
- Another advantage hashgraph has over blockchain is its access control mechanism. The hashgraph team created an access control system called Fair Bandwidth Allocation so users can give others temporary permissions with limited timeframes if they need to transfer funds out of multi-signature accounts.
- One final advantage hashgraph has over blockchain is that hashgraph is a lot more energy efficient. A hashgraph transaction requires zero electricity or hash power to confirm transactions on the hashgraph network (Swirlds). This means that hashgraph’s total operational costs are much lower than blockchains, which will be an important consideration as the cryptocurrency industry continues to grow and evolve.
Hashgraph is a new technology that shows a great deal of promise. It has already surpassed blockchain in terms of transaction speeds, and it’s likely that hashgraph will only get faster as more people start using it. Hashgraph also has a number of advantages over blockchain technology, including its energy efficiency, access control system, and Fair Bandwidth Allocation.
That said, hashgraph is still in its early stages and there are some kinks that need to be worked out. For example, hashgraph doesn’t have the same level of security as blockchain technology yet. Additionally, hashgraph is not as well-known as blockchain and may not have the same level of trust from users and businesses yet.