For around a decade or so, the technological
development has been going at an immense rate creating waves in every part of
the world. Whole world is now moving towards different kinds of transactions that
takes place every second affecting each and every sector. Until few years back,
the methods and techniques of the transaction were same when the people were
only relying on the bank or financial sectors for it. The blockchain technology
revolutionized the way people perceive the way of transaction by removing the
responsibility from the monetary agencies and kept it on the computing power.
For over a year or so, blockchain is one of the
most talked-about topics around the world. Everyone is aware of the hottest
cryptocurrency, “Bitcoin” that touched the high price a few days back. Most
people must be aware of blockchain as it is somewhat similar to the Bitcoin,
but do not know it well. The Blockchain is a decentralized network, which
allows transaction between two entities without the involvement of a central
agency like a bank. It reduces the transaction cost that banks retrieve from
people. It provides them the feature store information in the virtual data room
securely that also allows tracking of the transaction in real time. Cryptography
is used to secure the transaction between the buyers and sellers. The
blockchain records every transaction after verification.
But have you
ever thought from where the concept of blockchain came from?
Well, the origin of blockchain goes back to
the early 1990s when two U.S. data scientists, Stuart Haber and Scott
Stornetta, who worked for Bellcore (a successor of the legendary Bell
Laboratories) came up with the idea of cryptographically secured chain of
blocks. A year later Messrs, Haber and Stornetta proposed a method for
authenticating the time-stamp of a digital document. In a world in which
intellectual property was increasingly appearing in digital form that was
trivial to copy, these researchers recognized the potential benefits of a system
that could irrefutably establish the earliest creators of new information. The authors did not use the term “blockchain”
but their innovation involved the sequential linking of blocks of information,
such as the contents, time stamping, and authorship of documents.
But who would have thought that this work
might go on to become a pillar of a renowned term “Blockchain”. In the year
2008, an anonymous group or person named Satoshi Nakamoto came up with the term
‘Blockchain’ in a white-paper ‘Bitcoin: A Peer to Peer Electronic Cash
System’. It was implemented the following year as a core component of the
digital currency bitcoin, where it serves as the public ledger for all
transactions on the network. By using a blockchain, bitcoin became the first
digital currency to solve the double spending problem without requiring a
trusted administrator and has been the inspiration for many additional
Bitcoin was the first killer app of the
blockchain, as email was to the web. Since 2008, Bitcoin had a volatile ride, experiencing
a massive multi-year crash and recovery, from $173 to $2800+ respectively. Most
importantly, however, it has survived and the core tenets have been proven out.
In countries where inflation is astronomical, Bitcoin is used to pay for some
goods. Bitcoin may become a de facto store of value similar to Gold and can be
viewed as a hedge against instability and inflation. Besides bitcoin, there are
some other cryptocurrencies out there waiting to make an impact on not only the
financial sector but every sector of the world. From the introduction of
bitcoin till now, many people have worked on bringing some other virtual
currencies and some of them like Ethereum, litecoin, Ripple, etc are few of
them which can give a competition to bitcoin in the financial market. Bitcoin
continues to lead the pack of cryptocurrencies, in terms of market
capitalization, user base and popularity. Nevertheless, virtual currencies such
as Ethereum and Ripple which are being used more for enterprise solutions are
becoming popular, while some altcoins are being endorsed for superior or
advanced features vis-à-vis Bitcoins. Going by the current trend,
cryptocurrencies are here to stay but how many of them will emerge leaders amid
the growing competition within the space will only be revealed with time.
blockchain network may be public and open (permissionless) like the internet or
structured within a private group like an intranet (permissioned). The
blockchains that have captured the imaginations of many financial institutions
are known as “private” or “permissioned” blockchains because only certain
preapproved participants may join them. These blockchains use a variety of
means to ensure the identity of parties to a transaction and to achieve
consensus as to the validity of transactions. The entities creating the
“private” blockchain agree on rules that govern how entries are recorded and
under what circumstances they can be modified. Only specific authorized
participants are given access and are known within the network.
But where the blockchain is easing the
transaction process, there are several challenges and issues it is facing. Due
to the distributed nature of the ledger and the complex cryptography, it is
said that blockchain is virtually unhackable. But as soon as any additional
coding complexity is added, this can create vulnerabilities to the blockchain
and so reduce the effectiveness of the ledger’s security. Another challenge
blockchain faces is the scalability and resilience particularly where the
service is used as part of a financial institution’s ability to fulfil trading
obligations. Currently, many blockchain solutions are either in a development
or low adoption phase and, as a consequence, the technology and policies offered
are relatively untrusted. This is making most of the organisations uncertain of
using services in relation to business critical activities without a high
degree of confidence in the quality and stability of services it will receive.
there is a new kid in town!!
There have been literally thousands of
competitors since the birth of Bitcoin, many of which have made great
improvements to the scalability and durability that we now see lacking in the
number one coin. Because we are still in the early phases of blockchain
technology (some say it’s where the Internet was in ’93), there is still room
for something beyond Bitcoin to rise. But is there still time for a new
distributed ledger technology (DLT)?
Hashgraph is a superior distributed ledger
technology system that eliminates the need for massive computation and
unsustainable energy consumption like those of Bitcoin and Ethereum. It is a
new approach that greatly differs to other interpretations of the distributed
consensus and looks to provide an upgrade to the current systems of distributed
ledger technology (DLT). Hashgraph can resolve today’s scaling and security
issues, while also pushing the use of distributed consensus applications into
Blockchain technology operates as reliable
digital ledger that can be used to record financial transactions, ownership,
and almost everything of value. Any information held on a blockchain is shared
across its existing network and is consistently updated and also incorruptible.
This system ensures that data is not stored in any individual location, and
that the blockchain cannot be controlled by any single entity.
Consensus technologies have generally been
put into the following two categories:
Public networks such as Bitcoin and Ethereum.
Private networks using leader based consensus
As we have seen with Bitcoin, public networks
can be expensive to run and have a number of efficiency issues tied to the
Proof of Work mechanism. Private networks are more cost efficient and boast
higher performance capabilities as they restrict usage to known and trusted
participants. However, these networks are susceptible to DDos attacks whenever
security standards are not maintained.
Hashgraph is proven to be fully
asynchronous Byzantine. This means it makes no assumptions about how fast
messages are passed over the internet and this makes it resilient against DDoS
attacks, botnets, and firewalls.
The Hashgraph algorithm works without
needing to use the Proof of Work or Leader systems, and can also deliver
low-costs and high performance levels without a single point of failure.
Hashgraph does away with the need for extensive computation and energy
consumption and improves on the performance statistics of the Bitcoin network.
Bitcoin operates at a maximum of 7 transactions per second. While Hashgraph is
only limited in relation to bandwidth and allows for over 250,000 transactions
In addition to this, Hashgraph also allows
more a fairer system of operations as currently, miners can choose the order
for which transactions occur in a block, and can even delay orders by moving
them into future blocks, or even stop them from entering the system if
necessary. Hashgraph utilizes consensus time stamping and prevents any
individual from changing the consensus order of transactions by denying the
ability to manipulate the order of transactions.
Despite its obvious benefits, Hashgraph has
some way to go before it can boast of the network effects enjoyed by both
Bitcoin and Ethereum. However, in the ever evolving world of blockchain
technology it seems we are on the cusp of the next stage of evolution.
So, although Hashgraph appears to be a
superior technology than Blockchain it should be remembered things can just
move a little too fast. That is, once you begin to learn about something new,
something else replaces it before you can successfully adapt.