Hedera Hashgraph Vs. Blockchain: Key Differences Explained - Webisoft Blog (2024)

You bet! Blockchain, the revolutionary technology behind Bitcoin, has been on the scene for over a decade. It’s like the Muhammad Ali of our story, a proven veteran that has redefined the way we think about transactions and digital trust. From finance and healthcare to logistics and real estate, blockchain has been turning heads and challenging the status quo.

But in every exciting tale, there’s always room for a fresh contender, right? Enter Hedera Hashgraph, the Joe Frazier of our tech bout. It’s a new kid on the block, promising even more efficiency and security than the blockchain. Hashgraph technology, with its high-speed consensus algorithm and low-energy requirements, has the potential to bring about a new era in distributed ledger technology.

But which of these is the better choice? Which one is more suitable for your specific needs? Or, to put it in boxing terms, who would win in a match of Hedera Hashgraph vs Blockchain? That’s what we’re here to figure out. So stick around as we dig deep into the specifics, compare these two tech giants, and hopefully help you to understand which could be your champion. It’s Blockchain vs. Hashgraph – Let’s get ready to rumble!

What is Distributed Ledger Database?

A distributed ledger database, also known as distributed ledger technology (DLT), is a decentralized database system spread across multiple nodes or participants in a network. It enables secure and transparent record-keeping by allowing each participant to have a copy of the database and collectively achieve consensus on the state of the ledger.

This approach enhances transparency, prevents fraud, and improves security through cryptographic measures. By eliminating the need for intermediaries, distributed ledger databases reduce costs and streamline processes.

Blockchain is a well-known example of a distributed ledger database, but there are other technologies like Hedera Hashgraph that offer distinct features and consensus mechanisms.

Overall, distributed ledger databases provide the foundation for building decentralized applications and systems, revolutionizing industries by enabling efficient and reliable peer-to-peer transactions and data exchange.

Hashgraph Vs Blockchain: A Quick Look

The comparison table below highlights the key differences between Hashgraph and Blockchain:

What is Blockchain?

Blockchain is a decentralized and immutable digital ledger technology that enables the secure recording and verification of transactions across multiple participants or nodes in a network. It consists of a chain of blocks, where each block contains a list of transactions. These transactions are grouped together, encrypted, and added to the blockchain chronologically.

Proof of Work

Proof of Work (PoW) is a consensus mechanism used in some blockchain networks, such as Bitcoin. It requires participants, known as miners, to solve complex mathematical puzzles to validate and add blocks to the chain. This process requires a significant amount of computational power and energy consumption.

Proof of Stake

Proof of Stake (PoS) is an alternative consensus mechanism used in other blockchain networks, like Ethereum. Here, participants known as validators are chosen to create new blocks based on the number of coins they hold and are willing to “stake” as collateral. This approach aims to reduce energy consumption and increase scalability.

Proof of Elapsed Time

Proof of Elapsed Time (PoET) is a consensus algorithm used in some blockchain networks, such as Hyperledger Sawtooth. It utilizes a lottery system where participants wait for a randomly assigned time interval before being eligible to create a new block. This approach is based on the assumption that participants will act honestly if given equal chances.

Leader-based Consensus

Leader-based Consensus is a consensus mechanism where a specific node or a group of nodes is assigned the responsibility of validating and adding blocks to the blockchain.

Examples include Practical Byzantine Fault Tolerance (PBFT) and Raft consensus. This approach provides faster transaction confirmation times but may introduce centralization risks.

Economy-based Consensus

Economy-based Consensus is a consensus mechanism that considers participants’ economic stake or wealth in the network.

Examples include Delegated Proof of Stake (DPoS) and Delegated Byzantine Fault Tolerance (dBFT). Participants with a larger stake or delegated authority have a greater influence on block validation.

Voting-based Consensus

Voting-based Consensus is a consensus mechanism where participants in the network vote to determine the validity of transactions and the order of blocks.

Examples include Proof of Authority (PoA) and Practical Byzantine Fault Tolerance (pBFT). Consensus is achieved by a majority vote or a threshold of agreement among participants.

Blockchain: Smart Contracts Immutability

Smart contracts on the blockchain are immutable, meaning they cannot be changed, tampered with, or reversed once deployed. This immutability is achieved by hashing the contract’s code and storing it in blocks, creating a permanent record.

Modifying a smart contract would require altering the entire chain of subsequent blocks, which is practically impossible. This immutability enhances transparency, eliminates the need for intermediaries, reduces costs, and provides a secure and auditable record of transactions, fostering trust and accountability.

What is Hedera Hashgraph?

Hedera Hashgraph is a decentralized public network that aims to provide a fast, secure, and fair platform for digital transactions and applications. It leverages a distributed ledger technology (DLT) called Hashgraph, which is designed to achieve consensus among network participants in a highly efficient manner.

Unlike traditional blockchain-based systems, which rely on a chain of blocks to record transactions, Hedera Hashgraph uses a directed acyclic graph (DAG) structure to store and manage transactions. This structure enables parallel processing of transactions, resulting in high throughput and fast confirmation times.

Hedera Hashgraph introduces a unique consensus algorithm called “Asynchronous Byzantine Fault Tolerance” (ABFT). This algorithm ensures strong security guarantees and fairness by allowing consensus to be reached even in the presence of malicious or faulty nodes. Through ABFT, Hedera Hashgraph achieves consensus on the order and validity of transactions across the network.

What is Hedera Consensus Service?

The Hedera Consensus Service (HCS) is a key component of the Hedera Hashgraph platform. It is a decentralized messaging service that allows applications to achieve consensus on the order and validity of events or messages. HCS leverages the Hashgraph consensus algorithm to provide a secure and efficient way for participants in the network to agree on the chronological sequence of events.

Here’s how the Hedera Consensus Service works:

Event Submissions

Applications submit events or messages to the HCS, which can include transactions, updates, or any other relevant information.

Consensus Mechanism

The Hashgraph consensus algorithm is utilized to achieve agreement among the network participants on the order and timestamp of the events. This algorithm ensures fast finality, high throughput, and Byzantine fault tolerance.

Timestamping and Recording

Once consensus is reached, the events are timestamped and recorded in an immutable and verifiable manner on the Hedera Hashgraph distributed ledger. This creates a tamper-proof and auditable history of the events.

Trust and Verification

The recorded events serve as a trusted source of information, allowing applications and users to independently verify the integrity and order of the events without relying on a central authority.

Scalability and Efficiency

The HCS is designed to handle a large volume of events with high throughput, making it suitable for global-scale applications. It provides fast and reliable consensus, enabling real-time applications and use cases.

Interoperability

The Hedera Consensus Service is built to be interoperable, allowing applications to interact with other platforms and systems. This facilitates seamless integration and data sharing across different networks.

What is Hedera Hashgraph Platform?

The Hedera Hashgraph platform is a decentralized public network that provides a secure, fast, and fair infrastructure for building and deploying decentralized applications (dApps) and services. It is built on the Hedera Hashgraph distributed ledger technology, which utilizes a directed acyclic graph (DAG) structure to record and manage transactions and events.

The Hedera Hashgraph platform offers a range of features and functionalities, including:

Consensus Algorithm

It uses the Hashgraph consensus algorithm, which achieves fast, fair, and Byzantine fault-tolerant consensus among network participants.

High Throughput

The platform is designed for high transaction throughput, allowing for thousands of transactions per second.

Security and Trust

The platform provides robust security measures, cryptographic protocols, and transparency to ensure the integrity of transactions and data.

Fairness and Governance

It offers a decentralized governance model with the Hedera Governing Council, ensuring fairness, stability, and industry representation in decision-making processes.

Smart Contract Support

The platform supports the execution of smart contracts, enabling developers to build and deploy programmable and self-executing agreements.

Public and Permissioned Access

The Hedera Hashgraph platform supports both public and permissioned access, allowing developers and organizations to choose the level of openness and privacy they require.

Tokenization and Payments

It facilitates tokenization of assets and enables secure and efficient cryptocurrency payments within the network.

Interoperability

The platform is designed to be interoperable, allowing seamless integration and interaction with other blockchain networks and systems.

Transaction Confirmation Methods on Hedera Hashgraph

On the Hedera Hashgraph platform, there are two primary methods for transaction confirmation: consensus timestamps and transaction receipts. These methods provide different levels of confirmation and can be used to verify and track the progress of transactions on the network.

Consensus Timestamps

Each transaction on the Hedera Hashgraph platform receives a consensus timestamp once it achieves consensus among the network participants. The consensus timestamp represents the exact moment when the transaction is considered final and included in the ledger.

Consensus timestamps provide strong confirmation that a transaction has been accepted and agreed upon by the network.

Transaction Receipts

Along with the consensus timestamp, a transaction on Hedera Hashgraph generates a transaction receipt. This receipt serves as a proof that the transaction was successfully submitted to the network and contains information such as the transaction ID, status, and additional metadata.

Transaction receipts provide a way to track the progress and status of a transaction, even before it receives its final consensus timestamp.

HBARs: Hedera Hashgraph Cryptocurrency

Hedera Hashgraph has its native cryptocurrency called HBAR. HBAR serves as a utility token within the Hedera Hashgraph network, facilitating transactions, securing the network, and participating in consensus.

Here’s how HBAR cryptocurrency works within the Hedera Hashgraph ecosystem:

Value Exchange

HBAR is used as a medium of exchange within the network. Users can send and receive HBAR as a form of digital currency, similar to other cryptocurrencies.

Transaction Fees

HBAR is utilized to pay for transaction fees when conducting transactions or executing smart contracts on the Hedera Hashgraph network. These fees help prevent spam and ensure the overall security and stability of the network.

Network Participation

HBAR can be staked or held as a form of participation in the Hedera Hashgraph network. By staking HBAR, users can contribute to the network’s consensus mechanism and actively participate in the validation and security of transactions.

Consensus and Security

HBAR plays a crucial role in the consensus mechanism of the Hedera Hashgraph network. Validators, who are responsible for confirming and validating transactions, often stake HBAR as collateral to participate in the consensus process. This incentivizes honest behavior and helps maintain the network’s security.

Governance Influence

As a holder of HBAR, users may have the opportunity to participate in the network’s governance and decision-making processes. This involvement can include voting on proposals, protocol upgrades, and other key decisions related to the future development and direction of the Hedera Hashgraph platform.

Hashgraph: Smart Contracts Immutability

Hashgraph, like blockchain, provides immutability for smart contracts, ensuring their integrity and reliability. Smart contracts on Hashgraph are self-executing agreements that are encoded and stored on the distributed ledger. Once deployed, these smart contracts cannot be modified, tampered with, or reversed, bringing a high level of trust and security to contractual agreements.

The immutability of smart contracts on Hashgraph is achieved through the underlying consensus mechanism and the distributed nature of the network. Consensus among network participants is reached to validate and order transactions, ensuring that the state of the smart contract is agreed upon and recorded in a tamper-proof manner.

This immutability provides several benefits. It enhances transparency and trust, as all participants can independently verify the terms and conditions of the smart contract without relying on a central authority.

It also eliminates the need for intermediaries or third parties to enforce and validate the contract, reducing costs and increasing efficiency. Moreover, the immutability of smart contracts on Hashgraph enables a secure and auditable record of all transactions and actions related to the contract, enhancing accountability.

Frequently Asked Questions

How is Hedera different from blockchain?

Hedera differs from traditional blockchains through its use of the Hashgraph consensus algorithm, offering high throughput and fast finality, while traditional blockchains may face scalability and transaction speed challenges.

What makes Hedera different?

Hedera stands out with its unique features, including the Asynchronous Byzantine Fault Tolerance (ABFT) consensus algorithm, decentralized governance model, and the ability for all participants to access the complete transaction history.

Is Hedera Hashgraph not a blockchain?

Although Hedera Hashgraph shares some similarities with blockchain, it is technically not classified as a traditional blockchain due to its utilization of the Hashgraph consensus algorithm and the DAG structure for recording transactions.

What blockchain does Hedera Hashgraph use?

Hedera Hashgraph uses its proprietary Hashgraph consensus algorithm, which is different from traditional blockchain consensus mechanisms such as Proof of Work (PoW) or Proof of Stake (PoS). The Hashgraph algorithm enables fast finality, high throughput, and Byzantine fault tolerance within the Hedera network.

Conclusion

So, in a nutshell, both Hedera Hashgraph and Blockchain are unique in their own ways, each with its own pros and cons. Imagine Hashgraph as a super-efficient, speedy network that uses ABFT for consensus and maintains a comprehensive record of all transactions.

On the other side of the ring, you’ve got Blockchain with its chain of blocks, offering different consensus methods and only storing select transaction histories. With Hashgraph, you’ve got fees that fluctuate based on demand, whereas with Blockchain, it’s a bit more user-influenced or network-driven.

Now, the big question – Which is the best for you for between Hedera Hashgraph vs Blockchain? It all comes down to your specific needs. But hey, you don’t have to make that decision alone! At Webisoft, we’re here to help you navigate these choices.

Interested in exploring Hedera Hashgraph’s potential? Check out our services for Hedera. Or perhaps Blockchain’s your thing? We’ve got you covered there too! Learn more about our Blockchain services. We’re excited to help you embark on your tech journey, whether it’s in the fast lane with Hedera or along the proven path of Blockchain.