Hashgraph: New Directions For Distributed Ledger Technology - Mance Harmon @ TOKEN2049

[Music] well hello thank you for having me here I'm gonna talk about something today that we've just announced a week ago let me just dive into that can we go back a slide maybe maybe not my good friend and co-founder dr. Lehman Baird in 2012 had a vision for how the internet should work how online communities should be able to create and evolve pieces of cyberspace environments within cyberspace how we should be able to create virtual worlds in which we play together we work together we buy and sell goods and services in a secure manner without the need to entrust our data or privacy with a central party I remember while living there in Central Texas in Austin Lehman and I dozens of times would meet at our favorite Starbucks down the road and he would convince himself time and time again it was impossible to achieve and then in 2015 Lehman had a breakthrough we call this the hash graph today we decided to start by using the hash graph to address enterprise markets we built an enterprise-grade platform and then that led to a point in time last summer where we realized we could move on from phase 1 to phase 2 that's a public platform today a week ago we introduced hadera which is a public hash graph network with a global Governing Council before I dive into the details of this I'd like to first talk about the problems that we identified in the market that needed to be addressed in order to move the market forward to gain mainstream adoption of a public network I think it's interesting to note that after years of availability there still are no notable enterprise applications let alone mission-critical applications running on an enterprise public or running on a public network today why is that well if we talk about technology I think what we have to recognize and I'm sure everyone also agrees that we need to be able to process hundreds of thousands of transactions per second and we need to be able to come to finality or consensus on the order of those transactions within seconds in terms of security if we believe that these platforms are going to manage property rights and currencies and other forms of assets and they're going to process billions or trillions of dollars of value then we have to know that they're going to be targeted for attack and we have to prepare for that and what that means is that we have to start with the algorithm we have to prove certain sets of security properties in the algorithm itself in other words we have to start with solid math in terms of stability you know it's interesting to me that I've heard time and time and time again that our industry sort of looks and feels like the Wild West I'm sure you've heard it it as well well why is that well it's probably for a number of reasons but one thing that we can almost all agree on is that the major platforms are very likely to split into competing platforms and currencies well this introduces chaos into the market and we believe is a hindrance to the adoption by the mainstream markets so we have to somehow provide both open innovation and stability both and then governance if we can provide that open innovation and stability the question then becomes what's the right governance model and I would propose that it's a governance model where the best and brightest minds actually contribute directly to all parts of the organization when I'm talking about governance I'm not just talking about the way in which we come to consensus on the order of transactions I'm also talking about governance of the organization that is running the platform business operations marketing and PR finance legal regulatory concerns the governance model needs to reflect the interests of a global constituency and the way that the platform evolves over time hadera has answers to these problems in terms of technology hadera is built on top of the same hash graft platform that we've been selling to enterprise customers it's got a solid enterprise-grade foundation it processes well let's talk about that I'll come back to that rather than do the big reveal here in terms of security hadera as an algorithm achieves the best one can achieve in the field of distributed consensus it's the gold standard that is often called asynchronous Byzantine fault tolerance practically what this means is that Hodari is resilient to a category of distributed denial of service attack that other technologies simply aren't any algorithm where there is a leader or a coordinator or depends on some type of synchronous process is susceptible to DDoS attacks asynchronous bft solutions or not and they were thought to be impossible to achieve at scale for decades it's also the case that hadera is resilient to a category of attack that most of the industry doesn't even talk about and that is what we call fairness it shouldn't be possible for a single party in a distributed network to prevent transactions from flowing into the network or delay them in any way nor should it be possible for a single party to influence or control the order of transactions that the community ultimately agrees on a whole range of use cases depend on fairness if you have a distributed stock market a matching platform you really don't want one party to prevent bids or asks from flowing into the network or dictate the order of those bids or asks within the network the same thing would be true for auctions any time limited business transaction games if you have a multiplayer game and two of the players reach over to pick up that pot of gold at about the same time the order in which they press the button makes a big difference so this fairness property is needed across a broad range of use cases hash graph uniquely has a proof of fairness in the algorithm what about stability hash graph is patented as a technology but what that means is not that we're going to use the patent in a proactive punitive way but rather in a purely defensive way what it means for the development community is that there is no license required to use the platform there is no license required to use the services of the platform no license is required to build smart contracts on the platform the software that the developers build is their software and Hadera as a platform will not encumber that in any way in fact to use the platform you never even have to talk to us you simply use it there's no license required but what it does mean is that we can bring stability to the platform that it's difficult to bring otherwise the software the source code with version 1 will be put on a github account and released for open review so there will be transparency in the codebase you'll be able to download it review it compile it compare it to the same code that is available as binaries to download for any of those of you that want to run a full node in the network so there's transparency in the codebase but what I can tell you is that hadera will not fork I can guarantee it so if you have legal controls technical controls and you have the technology that we've described then the question is what is the correct form of governance both for consensus and for the organization itself we have a split governance model we call it open consensus with permission governance open consensus means that anybody can run the a node in the network that chooses to do so it's not a closed permission network it's an open network permission governance in this case means that we have pulled together a Council of the world's leading brands cross industry cross geography these organizations individually each have tens of billions of dollars in market cap you will recognize their names they're providing oversight and expertise in every part of the business we don't just have a list of advisers we have a Council of decision-makers that will help run the organization what's the platform look like as I mentioned we have hash graph consensus the same technology that we've been using for years as the foundation on top of that we have three initial set three initial services of course a cryptocurrency with native support for micro payments file storage distributed file storage system and also direct support for solidity smart contracts the etherium virtual machine is encapsulated put on top of the platform solidity contracts will run out of box on top of the platform what about performance these numbers are in the white paper on the website there are a lot of variables that go into performance numbers and so you really need to look at all of the details in this case we're talking about a single shard so in a single shard across eight regions around the globe we were able to achieve 50,000 transactions per second in less than three seconds of consensus latency when we doubled that and we went to a hundred thousand transactions per second consensus latency only went to three point four seconds when I talk about consensus latency or finality I mean we achieve 100% certainty on the order of transactions with a math proof that you can take to a court of law it's not probabilistic when we go to two regions across the United States we can do two hundred and fifty thousand transactions per second with three seconds consensus latency now this is transaction ordering and the right question to ask is where's the bottleneck right if you can process this many transactions per second where is the bottleneck it turns out signature of verification is a bottleneck being able to verify 250,000 digital signatures per second is hard what we did was decide to parallelize the effort in the GPU and the question is can you achieve that throughput and signature verification on the GPU well yes we achieved a million signature verifications per second on the GPU meaning the bottleneck is removed we will achieve hundreds of thousands of transactions per second and we have the performance results to demonstrate it so in summary we've addressed all of the problems the constraints if you will in the market that we identified in a unique way that I believe doesn't exist in the market today we are hadera final final word this is happening now we have a test network up and running on four continents today we have partners building product on the platform today at our event a week ago Gabe Layden the CEO of machines owned a multibillion-dollar game company one of the most successful game companies in the world made a product announcement on stage with us their building product on hadera today we're addressing ad tech as a use case with partners matt sorum any any Guns and Roses fans matt sorum the drummer from Guns & Roses is building a distributed marketplace for artists to be able to sell their their product to consumers and even here in Hong Kong we have mine fund that is setting up an incubator program their venture capital firm and they are setting up a a program here called helix to fund companies that want to build product on top of Hadera we're going global if you go to our website you can see more details we have a telegram group that's already in the mid 20 thousands of members something along those lines we have 3,000 developers on our discord Channel we invite you to join us thank you [Applause]