Many finanical services professionals think blockchain can be the solution to their problems. A Texas startup thinks blockchain itself is problematic, and launched a service yesterday to improve upon it.
Texas-based Swirlds announced yesterday a blockchain alternative called Hashgraph, opening it up for public download and use by developers. To better understand the platform, Dr Leemon Baird, founder and CEO of Swirlds, suggests imagining it as a braided tree. He writes:
In both blockchain and hashgraph, any member can create a transaction, which will eventually be put into a container (the “block”), and will then spread throughout the community. In blockchain, those containers are intended to form a single, long chain. If two miners create two blocks at the same time, the community will eventually choose one to continue, and discard the other one. It’s like a growing tree that is constantly having all but one of its branches chopped off. In hashgraph, every container is used, and none are discarded.
This structure saves valuable information from being “chopped off,” Dr. Baird told Bank Innovation. “Result is we can be faster and more secure,” he added.
The biggest differentiator for the hashgraph model is the added layer of fairness, Baird said. “In blockchain, a miner might put both those transactions in a single block, and have complete freedom to choose what order they occur,” he writes. “In the hashgraph, there is no way for an individual to affect the consensus order of those transactions.”
To get the technical details, read Dr. Braid’s full description of the hashgraph here.
With the official launch, Swirlds also announced a seed funding round — amount undisclosed — led by Ping Identity. The two companies will work together to launch a new standard for “distributed session management” that leverages the hashgraph approach, the company said.
Identity security is a “big opportunity” for Swirlds, Dr. Baird said, but financial markets, which represent “a big possible application,” may come first.1 - Reader Likes This Post