Hashgraph vs. Blockchain: Simple Comparison of Technologies for Dummies
When blockchain first made its debut, it was hailed as a savior of many problems plaguing the modern economy, like safety and dependability. Processing of information took a new turn with more focus on trust and transparency.
Over the years since its inception, the technology has transformed into a versatile and useful component. Recent stats reveal that it could improve global GDP by $1.76 trillion by 2030. It has emerged as an integral part of industries looking to create efficient and error-free services. Global spending on blockchain solutions in 2021 was 6.6 billion USD. Many top blockchain development companies offer diverse services based on this tech to various industry segments.
While the new-age tech has many perks, some drawbacks are present that make it difficult to adapt. The high energy costs and vulnerability to attacks are two of the key issues that have made using it a big challenge. Further problems users face with the method are the ability to change in scale or size and the ability to work in conjunction with other methods.
The introduction of Hashgraph concentrates on tackling such challenges. Viewed as a substitute to blockchain tech, this method assures economic, fast, and fair transactions and safety. Is this new tech an effective alternative?
In this article, we will see all info related to the innovative method and a detailed Hashgraph vs. Blockchain comparison.
Before we delve into a detailed hashgraph vs blockchain comparison, let us look at the key aspects of blockchain that make it a reckoning force in the DLT (Distributed Ledger Technology) sphere.
Blockchain technology is the basis for all cryptocurrencies in use now. It comprises a sequence of records or blocks where the info of an operation is recorded. Once recorded, the info is difficult to change or remove. This immutability makes it an ideal choice for existing issues that stem from a lack of immutability.
The innovative method is integrated effectively into many technical and industrial sectors to improve quality and productivity. Its use cases encompass many sectors, such as the supply chain, government management, and others.
- No intermediary is required for the functioning of the system. All decisions are made by the participants.
- Each transaction using the system has its separate validity proof and authorization for enforcing limitations. This allows independent verification and processing.
- Deletions or changes in the info stored in the block are not possible, making the system immutable. To make any alterations, the changes have to be done on all computers connected to the network.
- Due to the accessibility of info to all participants of the system, it provides a transparent process.
- This system is highly secure due to the unique identity provided to each participant of the network. The use of cryptographic hash is another reason for the high degree of safety. A hash includes the type, ID number, value of the previous hash, the time of the creation of the block, and more. The multiple layers of info make the hash secure.
- Quicker processing time is achievable with the system when compared to conventional banking methods. The time taken ranges from a few seconds to a few minutes.
The need for an alternative
While the advantages look appreciable, there are some challenges users face with the system that makes it necessary to find alternative methods. Here are some of the critical issues:
- The high energy expenditure for using the system is a big drawback. For making every node or block, the power required is very substantial. The time and fuel expenditures are too high, making it an uphill task to achieve.
- Verification of signature is another challenge, as a cryptographic scheme is needed for every transaction. Further, the calculation method consumes huge power.
- The disparity in the quantity of the blocks and the favorable cost is another big issue. Costs increase due to the higher rewards but owing to the slow procedure, and they do not work intensively.
- Vulnerability to attacks like DDoS, Sybil, and double spending attacks is another cause of concern for users.
Due to the above challenges, the need for a DLT without faults has become imperative. Methods like hashgraph try to bridge the gap turning the method robust and issue-free.
After perusing the info on the application, advantages, and cons of blockchain, here is a brief overview of hashgraph. The info will help users understand the hashgraph vs blockchain assessment better.
Hashgraph is a DLT that employs a consensus system to remove the drawbacks identified in the blockchain method. Swirlds is the patent holder for this method. It supports the Hedera proof-of-stake public network that promises superior safety, ultra-quick speeds, and minimal bandwidth.
HBAR, the native currency of the system, finds many applications like DApps development, powering of cryptocurrencies, and information cataloging. Global brands like LG, Boeing, IBM, and more are using this system successfully.
Unlike blockchain, which is open-source and not regulated by any entity, the hashgraph system is a centralized grid regulated by a 39-member board.
Some of the critical rewards of the method are listed below:
- It can achieve quick transactions of low latency with assured finality in a few seconds.
- Users can rely on receiving fair access, transaction ordering, and timestamps. There is no worry about being vulnerable to malevolent node manipulation.
- ABFT (asynchronous Byzantine fault tolerant) protection supports the method guaranteeing protection from Sybil and DDoS attacks.
- It operates on a dependable grid that is run by term-limited systems without any forks and can meet worldwide data standards.
Why hashgraph is not an ideal choice?
The idea is patented, so developers cannot contribute towards improving the method, as is the case with blockchain. Because of the absence of innovative inclusions, the system cannot evolve into a better format.
Since the method has been in use for a few years only, it is not clear how it can work in case of massive loads.
Hashgraph vs Blockchain
Now that the two DLTs have been discussed in brief, here is a detailed hashgraph vs blockchain comparison. The different ways in which the two methods vary are discussed in the hashgraph vs blockchain assessment.
The DLT used by the two entities differs. In the blockchain, info is recorded in a linear format in nodes or blocks. In hashgraph, a direct acyclic graph stores data. While the blocks hold information in the former method, the latter stores info in events.
The two methods have the same decentralization base, with each block or graph having a ledger copy.
Robust safety features form a common thread in the two methods. But when comparing hashgraph vs blockchain, the process used by the two differ. Blockchain uses a tamper-proof design wherein a hacker would find it impossible to enable changes. The immutability of the info is another reason for the strong security.
Hashgraph uses aBFT (asynchronous Byzantine Fault Tolerance), which ensures strong fault tolerance. It allows some defaults in the messages due to delay or loss, which does not affect the agreement. This asynchronous nature assures better security when compared to the blockchain method.
Comparing hashgraph vs blockchain, the former leads in its swift transaction pace. This is attributed to the gossip format it uses. Less info is required for propagation through the network because of the presence of a greater number of events.
In the case of the latter, the process is not as straightforward or fast. Since blockchain is a time-tested idea employed for over a decade, the operating pace differs based on the program type, crypto coin, and more. For instance, Bitcoin uses the PoW (Proof of Work) agreement with a speed of 7 tps (transactions per second). Solana using the PoH (Proof of History) agreement, can complete 50,000 tps.
Comparing hashgraph vs blockchain, the approach used by hashgraph makes it 100% effective. Owing to the necessity for block mining by participants, blockchain’s approach stops it from providing effective results.
For instance, in the case of two blocks being mined simultaneously, only one gets validated. Owing to the effort, time, and fuel consumption used for mining, this process is not efficient. Since the hashgraph depends on events and not on the formation of blocks, it remains efficient.
The process involved in hashgraph is unbiased when you compare hashgraph vs blockchain. It assigns nodes at random and focuses on time-stamping agreements. The format does not create any untoward impact on the participants. But due to the newness of the system, the full extent of its powers is not known.
With blockchain, the mining model turns it into a biased form. A miner has vested power related to the order selection, processing, and stopping of the process. This method fails to deliver full benefits to any of the participants.
The hashgraph system is put together to achieve equal voting rights to all participants. As per its design, it will not fork. Its gossip-based working method ensures there is no need for voting. This also turns it into a rapid process of passing information. Due to all participants understanding the way the voting would progress owing to the gossip system, virtual or electronic agreement is possible.
Comparing hashgraph vs. blockchain, the latter employs multiple agreement methods for authentication. Mathematical calculations enable validation which any participant can verify. For confirmation, miners create a fresh block, which results in high energy expenditure when the user count increases. This energy consumption is minimized with the voting and gossip-based network process of hashgraph.
Hashgraph vs. Blockchain Differences
Besides the above-mentioned variations, there are several more when comparing hashgraph vs blockchain. Here is a tabulated form indicating the crucial differences seen in the hashgraph vs blockchain comparison.
Hashgraph vs Blockchain Comparison Table
The comparison table above helps to provide a candid perspective of the important variances found in the entities.
Hashgraph as a replacement for blockchain
In assessing hashgraph vs blockchain, the former is an attempt to address the downsides of blockchain method. Its affordability, low energy requirement, and fast-paced nature are vital upsides. The efficacy and unbiased nature also tip the scales in its favor.
But the format is fairly new to the industry; hence its efficacy is not established properly. Further, it is a privately owned patented system with centralized governance. It does not offer a public permissionless solution.
For businesses in search of a decentralized and open-source solution, blockchain, with its multiple and proven use cases, is still the first choice. However, the two can be used together for projects if the need arises.
HBAR and blockchain: The connection
HBAR does not use the blockchain method. It uses hashgraph system. It is the only digital currency using the hashgraph system at present. But the patent holders provide info related to source code and other instructions for forming other tokens that use the system as the foundation. It is the hashgraph network’s native token and is applied in creating peer-to-peer transaction systems, for increased security from hackers and to power dApps.
Hedera Hashgraph as the future digital currency
For investors keen on sustainable and social investing, Hedera Hashgraph is a viable solution. The creators claim it to be the future as it promises quick, unbiased, and safe applications. When considering hashgraph vs blockchain, the former emerges advantageous in many aspects like
- Energy efficiency
- Low gas fees
- Carbon negative system
- 10X faster than blockchain solutions
Hashgraph as the better substitute?
Comparing hashgraph vs blockchain, the fast process, low fee, quick confirmation time, and unique algorithm make the former a superior choice. But blockchain has been in use for more than a decade and has proven to be indispensable in many applications. Hashgraph is a relatively new concept that has not been tested fully for its performance.
How does HBAR compare with BTC?
HBAR transaction cost is lower than BTC. While the fee for HBAR is $0.001 per transaction, it is $22.57 for BTC. It uses 0.00017 kWH energy for a single transaction as against over 885 kWH for BTC. Confirmation is in 3 to 5 seconds, while it takes 10 to 60 minutes for BTC.
Uniqueness of Hedera
Developers get to enjoy three key services with Hedera. Its rapid speed, safe process, and energy efficiency make it very advantageous. The system provides services like the token issue, smart contracts running in solidity, and consensus.
HBAR as a good investment choice
Faster processing speed is ensured with the Hedera network done in a single shard without affecting the stability or safety of the network. The HBAR transactions are small at $0.0001 per transaction. Due to the on-ledger hassle-free finality, users can be assured of proper settlement of payments and experience a unique digital world within the application.
The working method of HBAR
The directed acyclic graphs concept is used for the HBAR network. It creates information nodes that do not connect to previous states. It uses the fast, simple, safe, and efficient ABFT algorithm for its operation. It supports smart contracts that help in transactions that do not involve intermediaries like stock exchanges or banks.
Comparing hashgraph vs blockchain reveals the main advantages of the two DLTs. While the latter is popular for its diverse applications in many spheres, its proper integration is hampered by the high energy cost, expensive transactions, and slow speed. Hashgraph, with its patented system, helps address the challenges faced in using blockchain technology. It offers a safe, eco-friendly, and trusted solution for users. Multiple success stories and its impressive partnerships with many top-tier companies make it a digital system with high potential.
You can use both of these technologies and see which one suits you better as per your requirements.