What is Hashgraph?
Crypto Glossary Definition
A patented (closed-source) distributed ledger technology that uses a "gossip about gossip" protocol and virtual voting to reach consensus, instead of the block-based chain structure used by Bitcoin or Ethereum. Hedera is the best-known public network built on Hashgraph.
Why Hashgraph Matters
Hedera Hashgraph's gossip-and-virtual-voting approach can achieve very high transaction throughput with fast finality, but because the core algorithm is patented and the network historically used a permissioned council of large organizations to run nodes, it trades off some of the open permissionless-ness that public chains like Ethereum are built around.
Hashgraph in Practice
Imagine an enterprise software team evaluating distributed ledger options for a supply chain tracking system that needs to process a very high volume of transactions with fast, predictable finality. They come across Hedera, the best-known public network built on the Hashgraph algorithm, and learn that instead of grouping transactions into sequential blocks the way Bitcoin or Ethereum do, Hashgraph uses a 'gossip about gossip' protocol, where nodes continuously share information about what they've heard from other nodes, layered with a mathematical virtual-voting process that lets the network reach consensus on transaction ordering without a traditional mining or block-proposal step. The team is drawn to the claimed combination of high throughput and fast finality, which suits their use case of tracking thousands of shipment updates per minute. But during due diligence, they also note two tradeoffs worth weighing: the underlying algorithm itself is patented rather than open-source, meaning they can't freely fork or modify the core consensus mechanism the way they could with an open protocol, and historically the network's nodes were run by a permissioned council of large corporations rather than being fully open for anyone to operate. For their specific enterprise application, those tradeoffs turn out to be acceptable, but the team notes that a public DeFi project might weigh the same tradeoffs very differently.
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