Getting to know hashgraph, the ‘superior’ alternative to blockchain

Photo credit: Romolo Tavani / 123RF

This article is part of Tech in Asia’s partnership with The Jay Kim Show where we publish the revised transcripts from the show’s podcast interviews with top entrepreneurs. This is heavily revised from the original show transcripts. For the full interview, go here.

I sat down with Mance Harmon, CEO and co-founder of Hedera Hashgraph. The platform aims to be a superior alternative to blockchain by being faster, fairer, and more secure. It has the ability to process hundreds of thousands of transactions per second. By comparison, Bitcoin typically processes less than 10 transactions per second, and Ethereum usually processes less than 25.

Harmon shared with me the story behind hashgraph, the problem they’re solving, and how they foresee the future for blockchain and hashgraph.

Could you give us a little background of yourself?

Leemon Baird (the inventor of hashgraph’s algorithm) and I have been working together for 25 years. Our formal background is in machine learning, AI, and neural networks or deep learning.

In 2012, Leemon started devising a distributed consensus algorithm that is both secure and scalable. He had this major breakthrough in 2015, and today, that’s what we call hashgraph. And now, here we are three years later.

Tell us more about what Leemon was exactly trying to accomplish.

What Leemon wanted to achieve was the ability to change the computing model for the internet. He envisioned a world where we can carve out a piece of cyberspace. And in that piece of cyberspace, we run business applications that allow us to engage in business functions, commerce, or even games without entrusting our data and privacy with a central server.

He knew about bitcoin and blockchain, but he recognized from the very beginning that blockchain as a technology would never be able to achieve his vision. There has to be a fundamentally different approach that is far more performante. And if we are going to have this type of infrastructure, we have to make it as secure as possible from the very beginning.

We shouldn’t repeat the mistakes that were made when the internet was growing up the first time, where identity and security were sort of afterthoughts.

Are you now working on blockchain solutions for private enterprises?

Just to talk about some terms for a moment, hashgraph is an algorithm. There is no company called hashgraph, but we have two companies that use that algorithm. The first one was Swirlds, which we incorporated back in 2015. It went to market to address permission use cases and private networks for enterprises. We did that first because we knew that it would be required to realize our vision of how a public network should work.

Late last year, we got enough market validation, software development, and maturity in the company, so we decided to begin working on a public network. We spun out a separate organization, which is Hedera Hashgraph.

Swirlds still exists today, addressing enterprise use cases for permission networks. Meanwhile, Hedera Hashgraph is the company chartered with creating the public infrastructure built on the hashgraph algorithm.

What is blockchain and how is hashgraph “superior” to it?

This whole industry is about making it possible to have a replicated database. The notion has always been that there’s a single organization running one or a cluster of databases (e.g. Amazon). If you want to give a different party an instance of your database to run, there are a set of security concerns that you will have to worry about.

What Bitcoin demonstrated for the first time in 2008 is that it’s possible to give those instances away to different legal entities. And you could have hundreds or thousands of these database instances being run by a large group of parties in a secure manner.

Are there a few things, like a cryptocurrency or a digital asset, that you guys have already built?

How do you see things playing out in the future?