Blockchain is already so last year. Granted, 2020 lasted forever, but blockchain really is the first generation of distributed ledger technology (DLT). I am excited about Hedera Hashgraph, the third generation of DLT. The second generation, Ethereum, is the piece that added programmability to DLT.
As Ferris Bueller famously said, life comes at you fast, and DLT technology moves at ‘Ferris Bueller in a stolen Ferrari’ speed.
What Sets Hedera Hashgraph Apart From Blockchain?
Again, I’m not going into the weeds on this, but to understand the possibilities of Hashgraph, you need at least a rudimentary knowledge of DLT. These are the characteristics of a DLT, per LeewayHertz CEO Akash Takyar:
•The ledger of any transactions or shared contracts
•Synchronized and maintained in decentralized form across different locations and people (nodes)
•Eliminating the need for a central authority
All the information on the distributed ledger (DL) is stored securely and is kept immutable using cryptographic techniques. While the centralized ledgers are prone to cyber-attacks, it is difficult to attack DLs because all the nodes will have to be attacked and manipulated simultaneously.
“Okay, sure, Kirk, I get that,” you’re thinking, along with, “I don’t have any idea what the hell you’re talking about.”
This info is detailed but not difficult, which could be why so many brilliant people struggle to get it. It’s almost too simple in execution. DLT relies solely on a peer-to-peer network (remember Napster? It was almost peer-to-peer until it’s central servers were shut down… eMule got it right but I digress) rather than the old-school client/server computer model. DLT adds a trust layer that is simply impenetrable (well almost). Hashgraph has proven to be superior to blockchain in the areas of fairness, security, cost, and speed — the four main pillars of any system.
Blockchain’s wheelhouse is mostly cryptocurrency, whereas Hedera is a hyperledger community for open blockchain development. Leemon Baird invented it in 2016 as a means to process transactions quickly and cheaply, with an eye towards becoming a micropayment system.
The Unique Advantage of Hedera
What sets Hedera Hashgraph apart from the competition is a superior consensus algorithm — it gets to yes faster. Hedera treats “Consensus-as-a-Service” (CaaS – I own this term). This lets a variety of industries and use cases build unique smart contracts on top of another platform, like Hyperledger or Quorum, while integrating Hedera’s consensus algorithm into it. This is a neat trick that increases performance and reduces costs while maintaining state-of-the-art immutability.
Another attribute that I find interesting is that the company is built for the enterprise customer. Scalability is a snap. This focus is why close to 40 blue chip companies support this blockchain endeavor. No matter where you are in the life cycle of your company — from startup to enterprise-scale — or your role in development, Hedera lets you build safe, fast, and secure applications.
Google’s on Board
On the Hedera Hashgraph governing board, that is. Google is nothing if not always on the hunt for the next big thing, and Hedera shows all the hallmarks of being just that. The independent research firm Fundstrat issued a report on Hedera in February 2020 (the before times), and here are a few of the more interesting statistics.
- There were 36 million transactions between September 2019, when the network became publicly available, and February 2020.
- Hedera is on track to generate $1.9 billion in value by 2024.
Google joins heavyweights IBM, Boeing, and Deutsche Telekom on the governing council, but the big G is definitely the indicator that Hedera is headed for success at an enterprise scale.
A common denominator of a DLT is that they have their own cryptocurrency. Hedera’s is called HBAR, and it is the native currency for the public network. Within the application platform, HBARs power decentralized applications, build peer-to-peer and micropayment models, and protect the network from any malicious activity. Developers use HBARs to pay for network services like smart contracts, file storage, or cryptocurrency transfers. HBARs “pay” within the platform for bandwidth in network nodes, computing, and storage.
Any DLT is only as strong as its security. Hedera’s HBARs protect the public network by using HBARs to guarantee the security of the data and the network. HBAR utilization makes it almost impossible (read difficult and expensive) for a malicious actor to hack the network. Without going into the technical weeds, a hacker would have to take over 30% of the network ‘s supply of cryptocurrency. It’s not even a possibility for at least five years.
Hedera Case Studies
A better way to let you grasp how Hedera Hashgraph works in real-world applications is to highlight a few case studies. I’ve picked three from different industries to showcase how the technology works.
Healthcare is a global concern these days, and one of the most important components of healthcare innovation is communication. But for innovation and collaboration to progress, secure access to trusted data is a must. Acoer’s challenge was to secure the data that healthcare organizations rely on for use, storage, and software. When that data is within an impenetrable DLT, Acoer can meet the challenge of alleviating drug shortages.
These shortages are more common than you’d think in a country like the US, but there are close to 200 shortages every year. This year, the hydroxychloroquine shortage made the news. Arthritis patients who relied on the drug couldn’t get their prescriptions filled during a period when the federal government was taking over the supply chain as a COVID-19 therapy.
According to Jim Nasr, CEO and founder of Acoer,
“Public ledgers provide a good option for regulators, allowing them to achieve the compliance and transparency they need in a secure, high-performance network designed for collaboration.”
Acoer chose Hedera as their public ledger solution for several reasons that are unique to the technology. Hashgraph consensus lets a transaction complete in just a few seconds. Also, it has the timestamp and signature security to manage a complex supply chain across numerous entities.
What does this mean in real terms? Acoer has been a leader in tracking the spread of COVID-19. They will likely also play a large part in the supply chain management for the vaccine.
Energy: Power Transition
I am completely into this one. Power Transition is a microgrid management platform that acts as a marketplace for energy usage, management, and trading among businesses, governments, and individuals. Alternative energy sources — batteries, solar panels, wind, and the like — have entered the electricity mainstream, thanks to rapid technological advancements. As clean energy becomes more available, consumers are becoming more aware of the environmental costs of fossil fuels. They are also opting for clean energy as much as possible.
Hedera is giving Power Transition the capability to manage a peer-to-peer microgrid management platform. This lets individual consumers establish microgrids that will allow them to manage use, storage, and excess independently of the power companies.
The solution for Power Transition is to let consumers manage their own grids with minimal overhead and confirmed trust authentication.
They built the application on the Hedera DLT on a stable platform that permits users to have a direct exchange of HBARs for energy, and the quick turnaround keeps the energy flowing on demand. Jiro Olcott, director of Power Transition, believes that decentralized energy governance, combined with security and stability, is critical to the success of the project.
We all pretty much loathe digital advertising, primarily because it’s like the wild west. There’s no real oversight for advertisers, and the industry is riddled with fraud. Businesses aren’t all that fond of digital advertising either. Over 75% of advertising budgets go to the media whizzes who say they have the metrics to know how to place ads. In the opinion of the businesses, there is an appalling lack of transparency in the digital space. There’s no paper trail to identify who’s been hired, where the ads are placed or in what context, and the hit rate.
AdsDax’s idea is to reinvent digital advertising by eliminating the middlemen; they’re connecting advertisers to consumers and their devices without an intermediary. The Hedera platform lets AdsDax manage the ad marketplace via the secure DLT of immutable transactions. This guarantees that all data is reconciled correctly at every stage of the process. The timestamping and signature capabilities also give AdsDax the tools for fraud detection and prevention. AdsDax measures responses to ads, which is also important to advertisers. Ian Mullins, founder and CEO of AdsDax, has this to say about Hedera’s platform:
“Hedera has proven it has the scale, speed, and reliability to handle all of the live advert tracking data and programmatic event data that we have been handling in recent campaigns.”
As with all transactions, each occurrence has an average time of 3-5 seconds on the Hedera mainnet. AdsDax receipts also log each event’s information simultaneously with its transaction ID to create unmatched transparency for all parties to verify transactions. Since the transactions cannot be altered, all parties have unparalleled confidence in the data. Hashgraph consensus allows AdsDax the analytics to track published content based on the unique events delivered per campaign. The company plans to expand its use of the Hedera platform to use its proprietary HBAR cryptocurrency for internal remittance.
AdsDax is having great success with the Hedera applications. Some of the world’s biggest digital agencies — GroupM, Isobar, and Havas Media — are also using the platform.
Final Thoughts on Hedera Hashgraph
Hedera Hashgraph is well on the way to cracking the code for delivering applications that hit the trifecta of being easy to access, secure, and customized. DLT hit its third generation in just a few years, but the technology is moving so fast I’ll be raving about fifth-generation DLT any minute now. Have you encountered Hedera Hashgraph? If so, let me know what you think about its current capabilities and how it’ll change transactions in the future.