Hashgraph 101: What is Hashgraph Technology and its real life applications

Whenever a new technology comes, people become fascinated with it. Earlier it was blockchain and cryptocurrency. These days it is Hedera Hashgraph. Never heard of it? Worry not. We are here to answer all your questions about Hashgraph technology including whether it is better than blockchain or not.

It is a decentralized ledger similar to blockchain though its consensus mechanism is vastly different from that of the latter. Hashgraph’s unique consensus mechanism makes it faster and more efficient than blockchain. Read on to find out more about this and get the answers to various questions like what is Hashgraph used for and whether Hashgpraph is a cryptocurrency or not.

How Does Hashgraph Work?

Hashgraph is an example of a next-generation distributed ledger. It is often touted as a scalable and more secure alternative to blockchain technology. Like a blockchain, Hashgraph also encrypts and stores data in a decentralized ledger. The difference arises in the way consensus is achieved on both platforms.

Instead of a protocol like proof-of-work or proof-of-stake, Hashgraph relies on node communication to establish consensus. Here, all the nodes communicate with each other and a graph of connections is built like this to report the communication.

On Hashgraph, it is not just miners but all the users who participate in the validation process. For this, it has rather unique mechanisms called “gossip about gossip” and “virtual voting.”

Gossip about Gossip

Just like gossip spreads randomly from one person to another, information about data called “gossip” on Hashgraph spreads randomly from one node to another. The data structure here usually includes a timestamp, more transactions, an encrypted signature, and two hashes from the parent containers.

In this way, data is circulated among all the members of the network. As it spreads from one node to another, it is synchronized in the network with an event called gossip sync.

Virtual Voting

In virtual voting, nodes compare events and then establish consensus via a voting algorithm. Here, each node is aware of what the other node knows it can also predict how the other node would vote. 

What happens here is that a transaction gets a timestamp assigned to it as soon as it reaches a node. As it passes to the other nodes, a timestamp that is a median of all the timestamps received by the nodes for that transaction is assigned to it. This median is the result of the vote.

Hashgraph Features

Fast Transaction Speeds

The gossip about gossip protocol enables Hashgraph to achieve faster transaction processing speeds as compared to blockchain networks like Bitcoin and Ethereum

Unlike Bitcoin which processes about 7 transactions per second, Hashgraph can process and validate up to 10,000 transactions per second. It has been designed such that the growing number of nodes keeps adding effective processing power to the network.


Hashgraph maintains equity by ensuring that an individual or organization does not need to buy expensive mining rigs or possess high computational power to participate in the transaction validation process. Plus, as it uses timestamps, individuals cannot change the order of the transactions.


Hashgraph uses the asynchronous Byzantine Fault Tolerance(aBFT) to secure the data stored in its network. This means that a single node cannot prevent the network from establishing consensus. The use of aBFT also ensures that once consensus is reached it cannot be changed by any node.


Hashgraph is fair because there is no miner with special permission to determine the consensus timestamp of a transaction. The nodes democratically establish consensus and a single one cannot prevent the network from achieving that.

What is Hedera Hashgraph Used For?

Asset Tokenization

Hashgraph is a good choice for asset tokenization as it offers a fast, fair, and secure process. Thus, you can easily create and transfer fungible and non-fungible assets on the Hedera public network. 

Hashgraph lets you flexibly configure keys and tokens for your account’s KYC verification. The transaction fees are also low and predictable for using the consensus system. Hashgraph also offers a high level of customization for the tokenization of assets and assures compliance with all relevant regulations and standards.

Supply Chain Management

Malicious nodes can cause issues like compromised fair access and fair ordering among nodes on a regular blockchain network. Hashgraph’s architecture has been designed in such a way that these problems do not arise. It offers some unique functionalities such as fair transaction ordering, consensus timestamping, and fast finality that make it a good option for building applications for supply chain management.

Preventing Frauds

Hashgraph leaves blockchain far behind in terms of throughput and transaction volumes. Its high TPS makes it possible to get a real-time view of logged application events and transactions. This helps in building pattern detection and predictive analysis models that can be useful for preventing fraud. This is not possible with most blockchains as they have high transaction latency.

Integration with ERP and CRM

Hedera Hashgraph offers organizations easy integration of their ERP and CRM systems with its Consensus Service. This provides several benefits to organizations such as better security, increased transparency and data integrity, enhanced automation, and reduced costs.

Data Compliance

Having clear and accessible records of transactions is one way to improve data compliance and reduce liability. For this, Hashgraph offers certain tools that can be used to independently verify data compliance actions taken. Real-time verifiability of data through public access also helps in simplifying the audit process.

Identity Verification

Hashgraph enables organizations to manage identity credentials in a secure manner that also maintains privacy. This can help in preventing fraud, improving identity verification accuracy, and can be useful for determining authorization to access software and systems. Hashgraph can, thus, be used to store and verify information like biometric data and government-issued IDs in a safe manner.

Payment Ecosystem

Hashgraph is a publicly distributed ledger that can help reduce costs generally associated with traditional payment processing systems. Its Token Service offers various benefits such as more efficient payment settlements in a secure and compliant manner.

DApp Development

Hashgraph has several features such as high throughput, enhanced security, and upgradeable smart contracts that make it a great choice for developing Web3 DApps. The DApps requiring real-time interactions and data updates would particularly benefit from Hashgraph’s high transaction speeds and low latency.

Hashgraph vs. Blockchain

While both blockchain and Hashgraph are distributed ledgers, there are significant differences between the two systems. 

Data Storage

Hashgraph and blockchain are both publicly distributed ledgers but their data storage system is significantly different. Blockchain consists of a chain of blocks that contain data about transactions. The data-containing blocks are connected in a linear chain.

On the other hand, Hashgraph builds a graph of connections among nodes and every node keeps a copy of the ledger.

Programming Language

Certain blockchains, like Ethereum, have specific programming languages developed particularly for them. Solidity is an example of one such programming language in blockchain. Similarly, the Flow blockchain has the Cadence language for writing smart contracts on it.

Hashgraph meanwhile relies on common universal programming languages such as Java, JavaScript, and Go.

Consensus Mechanisms

The most common consensus mechanisms used among blockchain networks are proof-of-work(PoW) and proof-of-stake(PoS). Bitcoin is the most popular example of a PoW-based blockchain. Here, miners compete with each other to solve complex mathematical puzzles so that they can add a new block to the chain.

PoS is used most importantly by Ethereum and many other blockchains such as Polygon, Avalanche, and Cardano. Here, nodes need to stake their coins so that they can validate transactions. It is a simpler and less energy-intensive alternative to the PoW mechanism.

Hashgraph has its own consensus mechanism with the gossip about gossip and virtual voting protocols. There is no linear chain and information is shared by one node with another random node.

Transaction Settlement Speed

The Gossip about Gossip and Virtual Voting protocols help Hashgraph increase its transaction speed and improve efficiency. Hedera claims that it can easily achieve transaction settlement speeds of up to 10,000 transactions per second.

In comparison to this, blockchains are comparatively slower. Bitcoin can only process about 7 transactions per second and Ethereum also experiences frequent network congestions when the transaction volume is high.

Smart Contracts

Smart contracts are essential for both blockchain networks and Hashgraph. However, there are certain differences among the features of smart contracts on both types of DLTs. Blockchain smart contracts are immutable and non-upgradeable. It is nearly impossible to make changes to the code once the smart contract has been deployed.

Contrastingly, Hashgraph smart contracts are optionally upgradeable. This means that developers can introduce upgrades and fix bugs even after the smart contracts have been deployed.


Blockchains typically depend on cryptographic hashing to secure the network. The very nature of blockchains also makes tampering with them difficult. To modify it, a hacker would have to alter the whole chain and not just one block. This obviously requires massive amounts of computing power and is an onerous task.

Hashgraph uses asynchronous Byzantine Fault Tolerance(aBFT) for security. This system helps make sure that the network can achieve consensus even if malicious actors manage to get control of it.

Hashgraph Frequently Asked Questions(FAQs)

Is Hashgraph a Cryptocurrency?

No, Hashgraph is not a cryptocurrency. It is a distributed ledger that encrypts and stores data in a decentralized manner. It is touted as a rival to the more mainstream blockchain technology. However, Hashgraph does have a native token called HBAR that is used as network fuel and to make in-app payments.

Will Hashgraph Replace Blockchain?

While Hashgraph has many unique features, it is too early to say whether it will replace blockchain or not. Till now, it has only been deployed in private and permission-based networks. Blockchain, on the other hand, is relatively more mainstream and has been used in public and permissionless networks. 

Hashgraph’s full potential will only be known when it is tested in a similar setting. At this point, however, it would be premature to say that Hashgraph will replace blockchain.


Hashgraph is a next-generation distributed ledger with many interesting features. It is a patented technology that is considered to be a competent rival to blockchain technology. Hashgraph has a wide variety of use cases and has several characteristics that make it the ideal choice for DApp development and data compliance.

While they have some broad similarities, Hashgraph is actually quite different from blockchain technology, especially in terms of speed and efficiency.

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