It is illegal to reproduce this material in any format without prior 

written approval of LankaBangla Securities Limited.

platform for distributed consensus. It is 
a transparent, transactional, and flexible 
system. This technology uses two special 
techniques to achieve fast and secure 
consensus, which include Gossip about 
Gossip and Virtual Voting. Data structure 
and consensus algorithm features makes 
it much faster and more secure than 
blockchain technology.

What is Hashgraph?

Well it is not blockchain. It is totally 
different. In fact the way it works is bit 
difficult to explain.

Hashgraph is the emerging, non-
blockchain distributed ledger technology. 
Hashgraph has been creating buzz in 
blockchain circles. In a few words, it is 
a technology that can offer many of the 
same solutions as blockchain, but which 
uses different mechanisms to transmit 
information and confirm transactions 
within the network. Hashgraph promises 
that it is “Fast”, “Secure”, and “Fair”.

Hashgraph is a consensus mechanism 
and data structure alternative to 
blockchain technology. It is designed 
to allow a community of users to come 
to an agreement on the order in which 
transactions are generated, when no single 
member of the community is trusted. 
Hashgraph is built in a way that makes 
it much faster and more secure to reach 
a consensus than blockchain technology 
with the adoption of procedures known 
as ‘Gossip about Gossip’ and ‘Virtual 

Vinay Gupta, in a recent article for the 
Harvard Business Review, highlighted the 
fact that in the Blockchain world, every 
computer in the network processes every 
transaction. The process of verifying 
transactions (‘consensus’) takes time, with 
some transactions not fully verified for 
several hours after they have been added 
to the ledger. Security concerns have also 

been cited by some as a cause for concern 
with blockchain technology.

According to its website, Hashgraph is “a 
data structure and consensus algorithm”. It 
is not “cryptocurrency”, “blockchain”, or 
“protocol”. Hashgraph is more like a low-
level building block than a complete system. 
The whitepaper and available documentation 
describe a consensus protocol, but do not 
specifically describe any applications or 
use cases. Swirlds is labeling its Hashgraph 
technology as a “radically different approach 
to distributed consensus.”

Hashgraph, unlike Bitcoin, with 
proprietary, patented technology is 
owned by Swirlds, Inc. Swirlds does not 
have any public plans to release an open 
cryptocurrency or any public system at 
all. Swirlds released an SDK that allows 
anybody to experiment with the closed 
source hashgraph consensus library. 
Although hashgraph core is written in Java 
and LISP, the SDK makes it possible to 
build applications with any JVM language 
(Java, Scala, etc).

Hashgraph is an algorithm developed by 
Professor Leemon Baird who is also Co-
founder and CTO of Swirlds Inc. It allows 
a distributed and decentralized community 
to reach consensus between members very 
fast (250,000 transactions per second).

Bitcoin technology uses a tremendous 
amount of energy to run the system and as 
it is scaled up it became slower and slower 
to where it was no longer a currency, 
it was basically a speculative vehicle, 
with which you could make some gains 
in purchasing power. A transaction with 
bitcoin technology can take 4 hours for 
confirmation.  With hashgraph, compared 
to Bitcoin, uses no power.

How it Works?

Hashgraph is based on distributed ledger 
like blockchain, however, it offers an 

alternative consensus mechanism. It uses 
techniques like ‘Gossip about Gossip’ and 
‘Virtual Voting’ to achieve fast and secure 

A “gossip protocol” means that 
information is spread by each computer 
calling up another computer at random, 
and sharing everything it knows that the 
other one does not. It has been used for all 
sorts of things through the decades. I think 
the first use of the term “gossip protocol” 
was for sharing identity information, 
though the idea probably predates the 

‘Gossip’ is a commonly used term in 
computer science, which can be defined as 
calling any random node and telling that 
node everything you know, that it does 
not already know. In distributed ledger 
technologies (DLTs), transactions have to 
be broadcasted to every node across the 
network. A gossip protocol can achieve 
this transfer of information incredibly 
quickly. ‘Gossip about Gossip’ refers to 
attaching a small additional amount of 
information to this Gossip/Transaction 
Payload, which are two hashes containing 
the last two people talked to. Using this 
information, a Hashgraph can be built and 
constantly updated as more information is 
gossiped by each node.

The Hashgraph team describes it as, 
“Gossip about Gossip refers to attaching a 
small additional amount of information to 
this Gossip, which contains the last person 
we talked to, hence, we are gossiping 
about the information we gossiped. 
Using this information, we can build the 

Gossip about gossip or the gossip 
protocol is a very well-known concept in 
networking. Think of how gossip spreads 
in real life. A says something to B and 
then B says it to C and C says it to D and 
so on and so forth. Gossip about gossip