In this Hidden Forces exclusive, Demetri Kofinas interviews Leemon Baird about the launch of Hedera, a public ledger built on the hashgraph consensus protocol. Hedera promises to be the public ledger of the future. It’s fast, able to process hundreds of thousands of transactions per second in a single shard. It is secure with asynchronous Byzantine fault-tolerant consensus. It provides fairness in transaction ordering, with consensus timestamping for every event shared across the network.
Hedera is open review, meaning that anyone will be able to read the source code, recompile it, and verify that it is correct. The Hedera whitepaper makes it explicitly clear that no license will be required to use the platform. No license will be required to write software that uses the services of the platform or to build smart contracts on top of the platform. Applications built upon Hedera can be open source or proprietary; they do not require any license or any approval from the governing council.
Hedera governance is in two parts: Council Governance, used for the management of the business of the council, and Consensus used in the Hedera platform for determining the consensus order of the transactions. The Hedera codebase will be governed by the council and will be released for public review with Version 1.0. Hedera’s founders have stated that it will use its patents defensively in order to ensure the type of stable governance that the Swirlds team believes markets demand for mainstream adoption.
Hedera uses technical controls in order enable two capabilities. The first ensures that software clients validate the pedigree of the Hedera hashgraph prior to use through a shared state mechanism. The second makes it possible for the Hedera governing body to not only specify the software changes to be made to network nodes, but also to ensure precisely when those changes are adopted, and to guarantee that they are.
The Hedera technical framework also includes an Opt-In Escrow Identity mechanism that gives to users a choice to bind verified identities to otherwise anonymous cryptocurrency accounts, and thereby provide to governments with the oversight necessary to ensure regulatory compliance. This optionality gives Hedera the unique advantage of being able to stay ahead of regulatory changes by governments around the world.
Hedera expects to maintain, and in certain instances enhance the types of performance results already obtained by Hashgraph in permissioned test cases. Integral to the scaling of Hedera is the ledger’s approach to proof-of-stake (POS) and database sharding. Hedera uses a proof-of-stake model that requires no bonding, no slashing (i.e. no punitive actions associated with bad behavior), proxy staking (the ability to earn interest on coins you have staked with another node), and vote weighting by stake. Nodes receive payments proportional to the stake they make and share these rewards with those that proxied stake to them.
Hedera will launch with a services layer that includes a cryptocurrency capable of microtransactions, a file storage system, and smart contract capability of executing applications written in solidity.
Disclaimer: Demetri Kofinas is an early stage investor in Hedera. His previous interviews of Leemon Baird (first & second) and coverage of hashgraph were conducted prior to having become an investor in the public ledger. Nothing in this interview should be seen as an endorsement of Hedera, nor is it investment advice. This is not an ICO.
For more information on Hedera Hashgraph, head over to the Hedera team’s website at hederahashgraph.com.
Producer & Host: Demetri Kofinas
Director & Editor: Paul Thompson