Distributed ledger technologies (DLT) are disrupting and transforming existing markets in multiple industries. However, in our opinion there are five fundamental obstacles to overcome before distributed ledgers can be widely accepted and adopted across every industry and geography. In this paper, we will examine these obstacles, and discuss why Hedera hashgraph is ideally suited to be the world’s first mass-adopted public distributed ledger, supporting a vast array of applications.
This whitepaper gives an overview how hashgraph works and of some of its properties - particularly how it is fair, fast, Byzantine, ACID compliant, efficient, inexpensive, timestamped, and DoS resistant. The hashgraph is Byzantine Fault Tolerant (BFT) by the strongest definition - asynchronous BFT (aBFT). A full technical report describing the hashgraph data structure and algorithm, including mathematical proofs that Hashgraph is aBFT, is included.
Additionally, the whitepaper gives the results of recent performance testing for various combinations of numbers of nodes and their distribution around the world. These tests used Amazon AWS m4.4xlarge instances, and measured throughput up to almost 500,000 transactions per second and time to finality measured in second latencies. The whitepaper describes the mechanisms beyond hashgraph that are necessary for a public permissionless ledger - including a proof-of-stake model to inhibit Sybil attacks, a fee and payment model to ensure that nodes are motivated to participate, and a sharding architecture to guarantee future scalability.
The Hedera hashgraph platform will be governed by up to 39 renowned enterprises and organizations, across multiple industries and geographies - the Hedera Hashgraph Council (HHC). Its licensing and governance model protects the community by eliminating the risk of splitting, guaranteeing the integrity of the codebase, and providing open access to the protected core.
Hedera has Permissionless Consensus (or Open Consensus) with a closed Governance Model. This separation of governance from consensus is designed to ensure continued decentralization over time. Hedera’s governance terms ensure no single member will have control, and no small group of members will have undue influence over the body as a whole. When it comes to consensus, the network will expand to millions of nodes, all of which vote on distributed consensus.
The Hedera codebase will be governed by the HHC, and will be open review. Applications built upon the Hedera platform can be open source or proprietary. They will not require any license or any approval from Hedera. Hedera will simultaneously embrace open review, while bringing stability to the platform and cryptocurrency. In this way, Hedera will provide a transparent codebase that will provide the stability that markets demand for mainstream adoption.
Hedera directly resolves the five fundamental obstacles to mainstream market adoption of public ledger technology: Performance, Security, Stability, Governance, and Regulatory Compliance. The hashgraph data structure and consensus algorithm provides a best-in-class, unmatched combination of performance and security. The Hedera platform and governance council will provide transparency, open innovation with platform stability, tools to enable opt-in KYC and AML, and global, cross-industry expertise to provide governance and decision making for a globally distributed network and cryptocurrency.