What is Hedera Hashgraph?

by May 13, 2019Hashgraph 101


Summary: Hedera is the public distributed ledger technology that is built on the network of the Hashgraph algorithm by using the hbar cryptocurrency. Hashgraph is a consensus mechanism, or mutual agreement, within a network amongst hosting nodes and their users.

The Hedera Hashgraph (HH) consensus is then shared by all node computers in the form of a data structure called a directed-acyclic graph (DAG). This is radically different in design from blockchain data architecture which uses ‘blocks’ to bundle transactions into a long chain of connected transactions.

Hashgraph: DAG’s use only single transactions in their ‘graph’ to record all balances with the added advantage of not having to wait for block creations. Instead, in Hashgraph all transactions flow to the Hedera network as they are created in real time with no delay. The nature of the Hashgraph consensus algo performs with amazing speed, scale and security based on this breakthrough technology.


HH Speed: The throughput of transactions of the Hashgraph algo has been shown to achieve 100,000 transactions per second (TPS), over 14K times faster than bitcoin, over 3,000 times faster than ethereum and at least 33 times faster than EOS.

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HH Security: The Hashgraph algorithm has also been formally-proven at a leading institution that it satisfies the highest level of security, bank-grade in fact, and is called aBFT. Asynchronous Byzantine Fault Tolerance (aBFT) means that the Hedera Hashgraph network can achieve consensus regardless of having many bad nodes (1/3rd or less), can reach perfect finality (100% certain) on transactions, and performs this in seconds, not minutes.

HH Scale: Hedera achieves the most transactions of any network, 100K TPS within just one shard. All other blockchain solutions for scaling cannot even achieve that without many shards, or database divisions. In Hashgraph, the shards and the entire network are still aBFT in security. Many blockchains have to use less secure solutions, like off-chain networks to help with scaling.

With full global scaling, Hedera Hashgraph can easily achieve millions of transactions per second or more. The only limitation for the Hashgraph algorithm is the bandwidth of the internet. If the internet speeds up with 5G, so will HH. It is an amazing breakthrough that should not be underestimated.

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Trilemma: The fact is that blockchain is permanently limited in scaling design without sacrificing security. This problem is known as the Trilemma, which states that blockchain has a trade-off with speed, scale or security in order to expand, speed or secure the network. This is the largest barrier to adoption for the blockchain ecosystem.

Trifecta: However, since Hashgraph can scale without any loss of security, through the use of state proofs between shards, aBFT is preserved and allows HH to boast that they are truly the fastest, safest and most scalable DLT in the entire ecosystem. Hashgraph completes the trifecta, or trinity of success in being fair, fast and secure beyond all other distributed ledger technology.


Hbar Cryptocurrency: The token of Hedera Hashgraph is the hbar cryptocurrency. It is used to secure the network and allow transactions with the network nodes. The hbar is used to pay fees and to store exchangeable value in the Hedera network. Fees in Hedera are set by the Governing Council, but will be determined by free market forces as the network grows and matures.

Hashgraph Smart Contracts: In the Hedera network, Solidity-compliant Smart Contracts are used with the hbar token as the payment mechanism. Since all Smart Contract language is compatible with Solidity, all projects on the Ethereum network can easily port, or move their projects as they are onto the Hashgraph network for deployment.

This migration of projects is an anticipated event that many believe will occur due to the superior technological performance metrics of Hashgraph versus Ethereum. The Smart Contract use cases are endless, but certainly could create decentralized escrow services, fair online gaming, fair stock markets, dapps for gambling, peer-to-peer loaning services and much, much more.

Hashgraph File Storage: The file storage function on the Hedera network is fully capable of gathering, retrieving and securing sensitive documents and files. With Hedera, the breakthrough feature of secured deletion, means that a document can be provably removed from all file storage on the network, by a consensus statement by the network with 100% finality. This will be mission-critical with the growing enforcement of GDPR rules and regulations.

Hedera File Storage can also be used for a variety of things including: Government-issued ID’s, self-sovereign ID’s, Certificates of Ownership of real estate, motor vehicles and many other solid assets. With secure Hashgraph File Storage, a whole new world of possibilities is achievable with the best-in-class security of ownership certificates, digital assets and personal data. This functionality will only be available with 100% finality of judgment by the Hashgraph network, because of the remarkable aBFT property of the underlying algorithm.

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Ħello Future.