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roughly works on the same principle. 
Each “gossip” basically includes a piece 
of information attached to the hashes of 
the last two people talked to.

Hashgraph over Blockchain

Blockchain is an immutable distributed 
ledger of transactions which can be coded 
to record not just financial transactions 
but anything that has a value. On the 
other hand, Hashgraph claims to support a 
superior data structure capable of solving 
the major problems which the blockchain 
community is facing, the consensus 
mechanism.

The consensus mechanism which 
blockchains offer can be divided into two 
categories based on the type of blockchain 
i.e. Public or Private.

The public blockchain relies on consensus 
mechanism such as ‘Proof of Work’ 
or ‘Proof of Stake.’ For these, every 
node must agree with the order of the 
transactions in which they have occurred, 
which narrows down the number of 
applications where such technologies can 
be practically employed.

On the other hand, private blockchain 
relies on leader-based consensus 

mechanism which restricts usage only to 
trusted partners. However, it has loopholes 
in the form of relaxed security standards, 
making these networks potential targets 
for DDoS attacks.

Compared to these, hashgraph consensus 
algorithm overcomes these shortcomings 
as it requires neither ‘Proof of Work/Stake’ 
nor any other leader-based mechanism. 
It is expected to deliver low-cost quality 
performance with no single point of failure. 
Low-cost quality performance means 
less energy consumption as compared to 
Bitcoin and Ethereum. Also, Hashgraph is 
50,000 times faster than Bitcoin and offers 
up to 250,000+ transactions per second.

Once the Hashgraph is built, it is extremely 
easy to know what a node would vote, 
because we know what each node knows, 
and when they knew it. Because of that, 
they can run ‘virtual voting’ because every 
node can figure out how the other nodes 
will vote. So basically, nobody needs to 
broadcast his vote to the network.

In comparison, with implementation of 
other technologies, all nodes will have to 
broadcast vote-messages, slowing down 
the network. This allows every member 
to reach a Byzantine agreement on any 
number of decisions, without a single vote 
ever being sent. Finally, zero bandwidth 
is used beyond simply gossiping the 
Hashgraph, as every node contains the 
Hashgraph history.

The Reality Check

Hashgraph claims to be very fast as 
compared to the blockchain. However, 
till now, hashgraph is only deployed in 
private, permissioned-based network. It's 
potential in a public network is yet to be 
discovered. Hashgraph is not open source 
and therefore is not truly decentralized. 
The technology is patented by Leemon 
Baird and his colleagues at Swirlds. 
Their main clients would be corporations 
and institutions that want to leverage the 

decentralized properties of permissioned 
consensus algorithms with absolutely no 
possibility of downtime.

Hashgraph uses ‘Gossip of Gossip’ 
technique for faster and secure consensus. 
However, when a node chooses its 
successors uniformly at random, there is 
some probability that all the chosen nodes 
may be malicious. 

Ethereum founder, Vitalik Buterin, 
explained that blockchains may be 
suitable for some niche use cases, but 
they do not work well for mainstream 
use due to scaling issues. For instance, 
Bitcoin and Ethereum are only processing 
seven and fifteen transactions per second, 
respectively. To support Visa, Buterin 
explained, Ethereum would need to 
scale to thousands of transactions per 
second. Even to operate the New York 
Stock Exchange, you would need tens 
of thousands of transactions per second. 
Scaling the blockchain to this capacity 
would likely require a significant trade-off 
in security.

Superiority

Unlike Bitcoin and Ethereum, hashgraph 
eliminates the need for the massive 
computational and energy requirements. 
Using the ‘gossip about gossip’ protocol 
enables hashgraph to be lightweight much 
like gossip between friends. For example, 
the Bitcoin blockchain is about 60GB in 
size, whereas hashgraph uses a fraction 
of that memory, about 1GB, allowing cell 
phones to act as nodes.

Unlike a blockchain, where a miner can 
choose the order for which transactions 
occur in a block, can delay orders by 
placing them in future blocks, and can 
even stop them entirely from entering 
the system, the hashgraph consensus 
method timestamps each node (event). 
So assumptions are no longer required. In 
other words, no member can prevent the 

Unlike Bitcoin and Ethereum, 
hashgraph eliminates the need 
for the massive computational 
and energy requirements. 
Using the ‘gossip about gossip’ 
protocol enables hashgraph 
to be lightweight much like 
gossip between friends. 
For example, the Bitcoin 
blockchain is about 60GB in 
size, whereas hashgraph uses a 
fraction of that memory, about 
1GB, allowing cell phones to 
act as nodes.

TECHNOLOGY