There are numerous blockchains across different architectural formats written in numerous programming languages. There are a string of them that you can download from GitHub. Some blockchains are varied in nature and objective, and you can get just about anyone who can use some sort of object-oriented programing to create a new blockchain with your objective in mind. Blockchains are the results of programming parameters and processes, not a physical architecture that needs to be built with physical materials.
But for now, there are three special blockchains that we want to look at in particular and they all have to do with cryptocurrencies, tokens, and smart contracts. You see, the blockchain beneath the utility layer has some impact on how the blockchain below behaves. If it is just purely currencies like the Bitcoin network, then the mechanisms in place are a little different. If it’s for smart contracts then the mechanism is a little different. Finally, if they are meant for tokens, then the structure is just a little different as well.
The currency blockchain can be divided into two main avenues; the bitcoin blockchain and the altcoin blockchain. Most of the blockchains require proof of work for the miners to be able to have a shot at the rewards. Then comes the Ethereum blockchain that is optimized for the transmission of smart contracts. And finally, there is the blockchain that manages tokens like that of Filecoin.
Blockchain vs Hashgraph
The one thing that should start becoming apparent is that the blockchain is not just attached at the hip to any particular cryptocurrency. Even more than that, the blockchain is not exclusive to Bitcoin. Bitcoin indeed does have its blockchain, but it must be fully understood that the blockchain is totally malleable and can be designed to support almost anything that it needs to on top of it. The blockchain in essence becomes the platform for the application that’s added on top of it. In between the application and the platform of the blockchain, are the tokens or cryptos that facilitate the connection and bring monetary or currency value between the two layers.
There have been multiple attempts to ‘alter’ the role of the blockchain, but in effect what people are really doing is altering the format of the blockchain, not the concept of it. One such situation is the development of the Hashgraph. It is seen as a possible replacement to the current format of the blockchain.
Hashgraph is what they call a distributed ledger with a consensus algorithm. They have gone through great pains to not call it blockchain and there is a reason for that. First of all, you have to remember that Satoshi never patented the blockchain. The developer of Hashgraph, Leemon Baird, did, however, patent Hashgraph. And so if he wanted to patent it, it had to be unique. Therefore, there are a few things he has done to differentiate it which worked really well. But it is in essence another blockchain.
Let us give you an idea of how the Hashgraph system works (since they don’t want to call it a blockchain, we shall respect their wishes). Hashgraph does indeed do a few things better than the traditional blockchain. For one, it does not allow the miners to pick and choose which transaction it wants to include in a block. It all has to be included based on the timestamp. If you recall, miners now have the right to choose whom they include in their block when it comes to the current bitcoin block. That is obviated in the Hashgraph version. So that‘s a good thing. In the event you are planning to create your own blockchain, this is probably something that you would want to do.
So the first similarity between Hashgraph and Blockchain is that they both use a form of gossip protocol. But the difference is that the events are properly timed, and the timed events are not based on what each node says but on the consensus algorithm that runs Hashgraph. So no one can cheat on the time. Also, because there is a fairness protocol in Hashgraph, you get a sense of certainty that a transaction is going to get included in the ‘block’ regardless of the tip that the transaction participants provide. In bitcoin, there is a tipping mechanism where participants provide a fee in the transaction to be given to the miners. Miners have the habit of considering that fee when they mine the blocks. They tend to leave out transactions that have little or no additional fees and take the ones that have the higher fees.
That’s the key difference between Hashgraph and Blockchain. One more thing. Even though they both use gossip protocols, Hashgraph goes one step further and produces gossip about gossip. So that’s a little different, in the sense that there are gossips that create events that are not really material. It means that if A talks to B, that is an event, even if there is no material transaction. The moment A talking to B creates an event, it means that B can now tell C that there was an event of A talking to it. And so now they keep talking about talking. And they do this very rapidly.
Smaller packets of events, each containing the time stamp, are passed along. That works great because then what happens is that the Hashgraph can keep a timestamp of its own in consensus. When you have a thousand people all with their clocks slightly off, pile over and over again over an event, there is no way that event is something that happened in the future, so the mistaken (or intentionally altered timestamp) problem is solved in the Hashgraph.
Between the time stamp issue and the way they take transactions, it becomes a fairer process. In this case, it also becomes a faster process, because the more people there are in the network, the faster the gossip rate becomes and that means that the transaction rate is also faster. Hashgraph claims that it can do more than 50,000 transactions per second compared to Bitcoin’s significantly lower number. This is really good news, and if and when you get to develop your own blockchain, these are the things you want to think about.
Not only is Hashgraph fair, but it is also cheaper and faster, with the ability to perform more transactions. The developers are also advancing the process to be quantum tolerant.
Blockchain vs Tangle
The Tangle is an interesting version of the blockchain to a certain extent. It takes all the things that work well in the blockchain and improves things by removing some of the aspects that are not needed while enhancing some of the parts that are needed. For instance, there are no fees and there are no miners. The fact that blockchains use miners makes it impossible to do anything without them because without miners it is impossible to keep the transactions in blocks and to verify them.
However, the idea of being able to tip the miner should not have been something that was ever implemented, as there should not have been fees at all. The block reward should have been more than enough to be able to incentivize the miners. But because it started that way, it is now very difficult to change that and as a result, it is impossible to send microtransactions.
In the case of Tangle there are no blocks, so that means there are no miners. If there are no miners then there are no fees. So far so good. But the most important thing is that it does use distributed consensus. It also offers quantum security which means it can’t be ranked when quantum computers become mainstream. Tangle also offers scalability, so that is a very good start. It is something that you might want to consider when you try to develop your own blockchain or wish to fork the code here as well.
Tangle uses what we call a DAG; A Directed Acyclic Graph. It’s easy to unpack. Directed means it just goes in one direction and Acyclic tells us that it is linear and noncircular, so it does not go over itself.
The beauty about this sort of blockchain (and again, they do not like being called a blockchain, they call the foundation a tangle) is that they do not need the miners to accumulate transactions; each transaction is verified by two transactions after it and it is done so, randomly.
Let us give you a few terms to play with so that you get a little better understanding of the tangle. The coin that is built on the tangle, by the way, is the IOTA. The tangle doesn’t use blocks. Instead, it uses transactions that need to be verified by two transactions that happen after it.
Each transaction is not called a block, but a site. When a site is created, two sites randomly chosen behind it will verify the first site. Then four other transactions will verify the last two transactions, and that keeps going downstream. The two sites that are verified are chosen by the system using a random algorithm so that no one person can keep approving his or her own transactions. As the sites approve each other, the line of sites forms “branches”; so-called because they form a crooked or jagged line from the tips to the ends. The tips are the most recent sites that have yet to have any transaction confirm them.
By doing it in this way, what happens is that the scalability rides on itself. The more people there are, the faster the transactions get done. And instead of the blockchain getting jammed because the miners are trying to choose who is paying them more and the fact that each block has a 1MB limit, it is much less chaotic in the world of Tangle than it is in the Bitcoin blockchain.
