Hedera Hashgraph platform is built on the hashgraph distributed consensus algorithm. And some features of it signalize that its main aim is to invite institutional investors. But sensation is that it is NOT a blockchain. Though even most influenced crypto-integrators claims – it is. Why? It’s simple: we trust the blockchain and we do not trust other algorithms. So for commercial success it is critical to link the project with the popular topic of blockchain.
A distributed ledger (distributed ledger technology, DLT) is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. There is no central administrator or centralized data storage. A peer-to-peer network is required as well as consensus algorithms to ensure replication across nodes is undertaken. One form of distributed ledger design is the blockchain system, which can be either public or private. And many years blockchain was synonymous with a Distributed Ledger. But now some experts argue that technically it would only apply to linear blockchains such as the one Bitcoin or Litecoin use and not to Directed Acyclic Graphs such as the ledgers based on Iota, Tangle, or Hedera Hashgraph algorithms. Therefore according to the latter definition, not all distributed ledgers have to necessarily employ a chain of blocks to successfully provide secure and valid achievement of distributed consensus: a blockchain is only one type of data structure considered to be a distributed ledger.
Hedera Hashgraph team claims this “new generation of blockchain” will be governed by a council of renowned enterprises and organizations, across multiple industries and geographies. It will be up to 39 leading organizations in their respective fields, bringing needed experience in process and business expertise that has been absent in previous public ledger platforms. Each node casts one vote for each coin of the hashcap cryptocurrency users own.
Hedera is developed by US company Swirlds, Inc. It seems that it will govern the network over all this “leading organizations’. Swirlds mentions 5 fundamental obstacles to overcome before distributed ledgers (Distributed ledger technologies, DLT) can be widely accepted and adopted across every industry and geography:
- PERFORMANCE – The most compelling use cases require hundreds of thousands of transactions per second in a single shard (perhaps millions of transactions per second (tps) in a fully-sharded solution), and many require consensus latency measured in seconds. These performance metrics are orders of magnitude beyond what current public DLT platforms can achieve.
- SECURITY – If public platforms are to facilitate the transfer of trillions of dollars of value, they will be targeted, and it is better to prepare for this. To do so requires a consensus algorithm that provides the best security one can achieve, with the security properties of the algorithm formally proven. Vectors of security vulnerabilities shouldn’t be mitigated; they should be eliminated entirely. Other public DLT platforms are trading off decentralization (and so potentially compromising security) for performance gains.
- GOVERNANCE – A general-purpose public ledger should be governed by representatives from a broad range of market sectors, each with world-class expertise in their respective industries, and also selected to provide global geographic representation for all markets. Those that are governing need technical expertise so they can competently manage the technical roadmap. They need business expertise so they can manage business operations of the organization. They need expertise in economics and currency markets so they can manage the cryptocurrency. They need legal expertise to help navigate the evolving regulatory environment. In other words, governance should be by those globally recognized as world leaders in their respective industries, and representative of every market in the world.
- STABILITY – Without technical and legal mechanisms to enforce the decisions of the governing body, public platforms are at risk of devolving into chaos. Strong security and mature governance will enable a stable platform – one that engenders the necessary trust and confidence among those that would build commercial or sensitive applications on it.
- REGULATORY COMPLIANCE – Governments will continue to increase oversight of public ledgers and associated cryptocurrencies and tokens. A distributed public ledger must be capable of enabling appropriate Know Your Customer (KYC) and Anti Money Laundering (AML) checks.
Swirlds touts: “A platform that provides a combination of high performance, strong security, industry-leading governance, and both technical and legal controls to ensure the stability of the platform. Only then do we think mainstream markets will trust the platform enough to adopt public DLT en masse”.
May be. But why we have to trust Swirlds? It’s hard to understand: “All Governing Members will have equal governing rights and each Governing Member (with the exception of Swirlds, Inc.) is expected to serve a limited term, ensuring that governance is decentralized”. Strange logic.
Well, anyway – the platform is built on the hashgraph distributed consensus algorithm. It was invented and announced by by Leemon Baird, the co-founder and CTO of Swirlds, in 2016. Now he is CO-FOUNDER, CTO, AND CHIEF SCIENTIST at Hedera Hashgraph. Baird maintains it is less technically constrained than blockchains proper. « The hashgraph algorithm is a consensus mechanism based on a virtual voting algorithm combined with the gossip protocol to achieve consensus quickly, fairly, efficiently, and securely».
Mance Harmon, CO-FOUNDER & CEO, likes to mention that research had started in 2012. But after Hashgraph was claimed as a Distributed Ledger Technology , almost immediately some experts expressed their skepticism towards thethe idea and applications on its basis. For example, Emin Gün Sirer notes: “The correctness of the entire HashGraph protocol seems to hinge on every participant knowing and agreeing upon N, the total number of participants in stem, which is a difficult number to determine in an open distributed system”.
Hedera technical controls enable two capabilities. i) First, the Swirlds technology ensures that software clients validate the pedigree of the Hedera hashgraph prior to use through a shared state mechanism. It isn’t possible for a network node to fork the official version of the Hedera hashgraph platform, make changes, and then have those changes accepted as valid. If the original hashgraph and the copy are changed independently, software clients will know which is the valid version and which is not. ii) Second, Swirlds makes it possible for the Hedera governing body not only to specify the software changes to be made to network nodes, but also to ensure precisely when those changes are adopted, and to guarantee that they are. When the Hedera governing body releases a software update, all honest network providers will have their software automatically update, and all will do so at exactly the same moment in history. Hedera legal controls ensure the platform will not fork into a competing platform and cryptocurrency.
The Hedera codebase will not be open source, but anyone will be able to read the source code, recompile it, and verify that it is correct. No license will be required to use the Hedera platform, to write software that uses the services of the Hedera platform, to build smart contracts on top of the Hedera platform.
And finally: “The combination of technical and legal controls provide the governing body with the mechanisms needed to enable meaningful governance, and to bring the stability that we think is required for broad-based adoption”.
In a word – want stability, reliability, speed – forget about anonymity and freedom. Did we want this when we came to the crypto? Hardly. But to whom does this help? To all who want to control, regulate and even manipulate. And also – to have the ability to predict the rise and downs – that is, successfully play in the courses. Obviously, the Hedera platform is one of the first attempts to crush a really decentralized blockchain, exposing as a reward the speed and reliability of the ledger, “decentralized in a new way” (using the hashgraph algorithm). From this it can be concluded that real blockchain is really impossible to regulate. Therefore, regulators are looking for ways to find a replacement for it, which, after all, will probably be controlled.
The USSR was a very reliable state. And had speed of development – for example, in the exploration of outer space – that excelled the speed of the other states. This did not save him from collapse.
There are very little info about project tokenomics:
- Token type: OWN WALLET
- TOTAL SUPPLY: 50,000,000,000
- Ticker– HHC
- Sold on pre-sale: $18,000,000
- ICO STATUS: UPCOMING
- CLOSING UNKNOWN
- Whitelist: YES
Instead of economics
Poetical overview of Hedera: A blockchain is like a tree that is continuously pruned as it grows – this pruning is necessary to keep the branches from growing out of control. In hashgraph, rather than pruning new growth, it is woven back into the body. In both blockchain and hashgraph, any member can create a transaction, which will eventually be put into a container (the “block”), and will then spread throughout the community. In blockchain, those containers are intended to form a single, long chain. If two miners create two blocks at the same time, the community will eventually choose one to continue, and discard the other one. It’s like a growing tree that is constantly having all but one of its branches chopped off. In hashgraph, every container is used, and none are discarded. All the branches continue to exist forever, and eventually grow back together into a single whole. This is more efficient.
Furthermore, blockchain fails if the new containers arrive too quickly, because new branches sprout faster than they can be pruned. That is why blockchain needs proof-of-work or some other mechanism to artificially slow down the growth. In hashgraph, nothing is thrown away. There is no harm in the structure growing quickly. Every member can create transactions and containers whenever they want. So it is very simple, and tends to be very fast. Finally, because the hashgraph doesn’t require pruning and therefore is simpler, it allows more powerful mathematical guarantees, such as Byzantine agreement and fairness. Distributed databases such as Paxos are Byzantine, but not fair. Blockchain is neither Byzantine nor fair. Hashgraph is both Byzantine and fair. The hashgraph algorithm accomplishes being fair, fast, Byzantine, ACID compliant, efficient, inexpensive, timestamped, and DoS resistant.
And they have a convincing and simple model of fees:
As for latency – some successful test were made. Result: “If it is desired to keep the latency under the 7 seconds required by credit cards, while still achieving 200,000 transactions per second, it is possible to use 32 computers in eight regions, or use 64 computers in two regions, or use 128 computers in one region” (see chart):
So many benefits for hashgraph algorithm, few persist for blockchain. You serious?
Leemon Baird, Co-Founder, CTO, & Chief Scientist – the inventor of the hashgraph distributed consensus algorithm. With over 20 years of technology and startup experience, he has held positions as a Professor of Computer Science at the Air Force Academy and as a senior scientist in several labs. He has been the Co-Founder of several startups, including two identity-related startups, both of which were acquired. Leemon received his PhD in Computer Science from Carnegie Mellon University, and has multiple patents and publications in peer-reviewed journals and conferences in computer security, machine learning, and mathematics.
Mance Harmon, Co-Founder & CEO – an experienced technology executive and entrepreneur with more than 20 years of strategic leadership experience in multi-national corporations, government agencies, and high-tech startups. His prior experience includes serving as the Head of Architecture and Labs at Ping Identity, Founder / CEO of two tech startups, the senior executive for product security at a $1.7B revenue organization, Program Manager for a very-large scale software program for the Missile Defense Agency, the Course Director for Cybersecurity at US Air Force Academy, and research scientist in Machine Learning at Wright Laboratory. Mance received a MS in Computer Science from the University of Massachusetts, and a BS in Computer Science from Mississippi State University.
Tom Trowbridge, President, prior to joining, he started and ran the New York office for UK-based Odey Asset Management. Before Odey, he held various positions at Lombard Odier, Atticus Capital, and Goldman Sachs. He started his career in 1996 as an investment banker in the telecom group at Bear, Stearns & Co., and subsequently spent three and a half years at the telecom and media private equity firm Alta Communications, where he executed 10 deals in technology, telecom, and media and served on two boards. Tom has a BA from Yale University and an MBA from Columbia University, where he was a member of Beta Gamma Sigma.
Slava Rubin, Co-Founder & CBO, Indiegogo, responsible for executing the company’s strategic growth initiatives, including distributed ledger technology. He was CEO for over 8 years from launch in 2008 and grew Indiegogo to over $1 billion distributed around the world. He represented the crowdfunding industry at the White House during the signing of the JOBS Act and has helped navigate bringing equity crowdfunding to the American public. Slava holds a BSE from the Wharton School of Business, and is the Founder of Music Against Myeloma, an annual charity event for cancer research in partnership with the International Monetary Fund (IMF).
John Best, CEO, Best Innovation Group, & Co-Founder, CULedger – Best Innovation Group (BIG) focuses on industry-wide code sharing and API prototype development. John speaks at industry events and the author of Breaking Digital Gridlock, a critically acclaimed book designed to help financial institutions in their digital transformation journeys.
Aaron D. Moore, CTO, Cyber & Intelligence Mission Systems Division, Northrop Grumman – oversees the development of advanced cyber, electronic warfare and intelligence, surveillance, and reconnaissance converged architectures and concepts at Northrop Grumman. He spent over a decade as a Special Forces operator and was decorated for heroism and has received numerous medals, ribbons, and awards for his service. He is currently a student in the Industrial and Systems Engineering PhD program at Virginia Tech.
Why is crypto community so excited by the project, even without having an idea of its tokenomiks? The most likely answer is that small investors saw Hedera Hashgraph’s orientation towards large institutional investors. And therefore they are in a hurry to enter the project, for the time being it has not been fully bought up by the institutionals. After all, the support of large investors is a guarantee of the viability of the project and of the growth of its tokens.
Hedera Hashgraph offers exactly what institutionals have long expected on crypto: replacement of the decentralized, “unmanageable” (that is, not managed from any center) blockchain with smth with high speed, confirmed by the tests. And most importantly – with loyalty to the regulators! Institutionals are afraid of nobody and nothing – no competitors, no community, no volatility, no crises. They are afraid only of those who are able to put an end to the development of the cryptosphere in a single stroke of the regulatory sword. When this issue is smoothed out – their coming into the crypto is predetermined.
The project Hedera Hashgraph has really powerful team. They are mature, experienced professionals who know what they want and how to achieve it. That hype, which the project has now – this is not the result of cheap noise in social networks, but the result of an expensive large-scale marketing campaign that began on March 13 in NYC and swept the leading European capitals from London to Tallinn (do not laugh, Estonia is a technological and IT polygon for all Europe).
In their marketing activities, the authors used the right tools to attract the attention of institutionals. And the time is right now. Only very naive people can believe that the current drop in the market is an accident or consequence of the volatility of the crypto. For smart people it is clear that this is not so. There may be a tough preparation for the Wall Street wolves to com into the cryptomarket . Those who have enough hardness to sit out this time, can then raise a lot of money. But to rule in this Big Game will no longer be a community, or individual crypto enthusiasts. Hedera Hashgraph, perhaps, marks the transition of the market to the “adult” level. Most likely there will be more such projects now.
The huge and growing hype, the availability of funds for promotion and the desire to spend them, a real scientific base, a well-developed concept, confirmed by testing, board of partners, powerfull team – all these speak for the success of the Hedera Hashgraph project in the short term. However, in the long-term – this is unlikely. The blockchain did not appear in order to be crossed out by the most sophisticated algorithm, which basically does not contain a substitute for the radical advantages of the blockchain as a “new Internet”.
Coinstelegram Rating: Pre-High