Hedera Hashgraph has a special position in the blockchain universe. It is not a blockchain, they say, yet it builds public networks and employs DLTs. To find where Hedera is now, and what its plans are, Digital Asset Live Editor-in-Chief talked to Jordan Fried, Hedera’s SVP of Global Business Development.
Q1: What is the difference between a hashgraph and a blockchain?
A1: Unlike blockchain and layer 2 scaling solutions, Hedera combines the fast, fair, and secure hashgraph consensus algorithm with the trust of Hedera’s public network governance, for trusted scalability without compromise.
Hedera Hashgraph introduces a platform upon which nodes can communicate with each other in a faster, more efficient way. The Hedera Hashgraph network allows nodes to constantly relay messages to one another at lightning speed, with a consensus mechanism called ‘gossip about gossip’.
In contrast to resource-intensive public blockchain networks such as Ethereum, Hedera is based on the hashgraph consensus algorithm which uses significantly less energy than a blockchain thanks to the breakthrough of gossip about gossip also referred to as “virtual voting.”
In addition, Hedera Hashgraph is the only public DLT able to offer ‘consensus as a service’, through the Hedera Consensus Service (HCS). HCS answers the question, ‘How do we incorporate decentralized trust into new or existing applications?’ It affords developers a unique opportunity to generate verifiable timestamps and ordering of events for any application.
Hedera is the first public distributed ledger that allows developers to build their own application networks (appnet), a set of computers which enable privacy but utilize the trust of Hedera’s public ledger as their consensus engine. HCS takes full advantage of hashgraph’s high-throughput for speed and asynchronous Byzantine fault tolerance for security. Hedera Consensus Service can be used standalone or as a decentralized ordering service with other ledgers, such as Hyperledger Fabric, Corda, or Ethereum.
Examples of how companies might utilize HCS include powering the consensus of a private DLT network, interoperability between two private blockchain networks, asset tracking across a supply chain, music stream counts to determine remittance for digital rights management, an auditable log of asset transfers, and payable events across an advertising platform.
Q2: What are the main income sources of Hedera Hashgraph at the time being?
A2: Hedera makes fees from API calls to utilize its various services. A more detailed explanation and estimate of fees can be found at https://www.hedera.com/fees
Q3: What priorities are formulated in the adopted business strategy, formally or informally?
A3: Fostering an inclusive and diverse governance structure of council members, along with building out more enterprise use cases, and ensuring technological adoption are the three core pillars of our business strategy. This means ensuring that we are building the right things, and that enterprise users are fully equipped with the tools and knowledge to utilize the full range and value of our decentralized technology.
Q4: As BD Hedera, where do you see your company in the short term (1-2 years), mid term (3-5), long term (5+ years) from now?
A4: Hedera Hashgraph Co-founders Dr. Leemon Baird and Mance Harmon have envisioned a steady journey to a truly permissionless public network, which will serve as the trust layer of the internet.
Last year a lot of work focused on ensuring the Hedera platform was ready for public open access. This has positioned us well for increased user activity and enterprise adoption in the next 1-2 years, despite the uncertain market backdrop. Throughout 2020 and into 2021 we will make it easier for applications to onboard, integrate with other parts of the DLT ecosystem, and develop highly scalable applications that meet their needs.
Since launch we’ve seen Hedera become one of the fastest growing public DLT’s in the market processing over 70,000,000 million main network transactions in just half a year since we’ve publicly launched. We’re truly just getting started and our mission is to become the defacto enterprise network in the market. Hedera is the only network in the market built for the enterprise we feel we’re best positioned to win the enterprise market over the coming years.
Q5: What major milestones do you envisage in 2020 for Hedera Hashgraph and for the industry as a whole?
A5: Hedera Milestones:
We launched our public mainnet in September 2019 – an historical milestone in the Hedera journey, and launched Hedera Consensus Service last month. In addition, for the rest of 2020, on the technical side, we expect to achieve the following milestones:
- State proofs on entities: State proofs can be requested by querying the network for a record. When a client requests an aspect of the state, nodes can construct and return a small file carrying cryptographic material and signatures to prove the returned data is the true consensus state.
- Mirror node beta: Hedera’s Mirror Node software enters beta and is available for developers to download and configure for use with the Hedera testnet and mainnet.
- Open review/open source: The base layer of the codebase (hashgraph consensus) will be open for public review and made available for anyone to read, recompile, and verify that it is correct. In conjunction, Hedera services and tools will be open sourced
These developments will allow us to facilitate the emergence of more decentralized applications on the Hedera network in 2020.
In addition, we expect to continue to announce new members of the Hedera Governing Council to ensure effective governance structures.
With enterprise adoption fast increasing, 2020 will be a very exciting time for the DLT industry. DLT has already been integrated into a range of organizations and systems, changing the way the world interacts, and increasing the speed and security of transactions.
DLT is currently going through the ‘trough of disillusionment’, as defined by the tried and true Gartner Hype Cycle. Combined with a global economic contraction, believe it or not, this is the most exciting time to be in the DLT space. Many of today’s largest and best-known technology brands were born out of previous recessions (necessity being the mother of invention), and I believe we will soon enter the slope of enlightenment, when people and organizations really learn and begin to use the technology for practical, useful purposes that will change how companies, applications and users interact.
Q6: What major issues are there to overcome?
A6: The market needs to focus on making it easier for enterprises to adopt public DLTs. Using public DLT’s is complex today. Enterprises are not always willing and able to hold cryptocurrency, custody it, and use it to consume the services of the public networks in the market today.
Q7: How to overcome them?
A7: At Hedera we think a lot about on-ramps and how we can extract away the complexity of using a public DLT today. Hedera was built with ease of use in mind and I think our fast growth in the market highlights this. You can see many of the real world use case for the technology here: https://www.hedera.com/users
We have a long way to go to make it easier for enterprises to adopt public networks in general. But when you start to think of HBAR, the Hedera platform token, like cloud credit which can be used to consume cloud services like the Hedera Consensus Service, we begin to see enterprises becoming much more comfortable with their use of public networks.
Helping businesses and industry understand the core tenets of distributed ledger technology and the benefits it can bring is a key part of overcoming some of the bottlenecks associated with mainstream adoption. At Hedera, we are playing our part in networking with enterprises in diverse industries to educate them on the facets and benefits of the technology, and devise strategies for implementation., spanning industries such as healthcare and pharmaceuticals, supply chain, advertising, anti-fraud, gaming, entertainment and content, and more. The Governing Council members also help us expand our scope and reach to inform a wide set of industries across different geographical regions.
We are also working with other industry players on a number of technology integrations, which will make it easier for both organizations and end-users to seamlessly adopt the technology.