While both Blockchain and Hashgraph are types of Distributed Ledger Technologies (DLTs), they work in very different ways. Blockchain stores data in blocks that are linked together in a chain and is the backbone of Bitcoin and Ethereum. On the other hand, Hashgraph uses a graph-based structure and a unique consensus method called “gossip about gossip” and virtual voting, which allows it to be faster and more efficient.
While Blockchain has been the dominant force in Web3, powering everything from cryptocurrencies to DeFi, as the space matures, scalability, speed, and energy efficiency are becoming critical, and that is where Hashgraph comes into the picture.
Let’s help you break down both technologies in detail and understand how they will evolve together in the future, rather than working against one another.
What is Blockchain and How Does it Work?
Blockchain is a decentralized digital ledger that records transactions across a network of computers. Instead of relying on a central authority, such as a bank or government, it distributes record-keeping among multiple participants, known as nodes. This makes the transactions transparent, secure, and tamper-resistant.
Each transaction on the blockchain is grouped into a block. These blocks are then linked chronologically to form a continuous chain, hence the name “blockchain.” For a blockchain transaction to be successful, a user must initiate a transaction, which is then broadcast to the network. The nodes validate it using a consensus mechanism.
Once verified, the transaction is added to a block. This new block is then cryptographically linked to the previous one, forming a chain. Once added, blocks cannot be altered to ensure data integrity.
There are two primary consensus mechanisms employed by blockchain systems: Proof of Work (PoW) and Proof of Stake (PoS).
- Proof of Work: In PoW, miners solve complex puzzles to validate transactions. It is energy-intensive but highly secure and is used by Bitcoin and early Ethereum.
- Proof of Stake: In PoS, validators are chosen based on the amount of cryptocurrency they “stake.” It is more energy-efficient and is used by post-merge Ethereum and Cardano.
Blockchain is not only the backbone of cryptocurrencies, but its impact goes far beyond that as it enables smart contracts and decentralized finance (DeFi). Blockchain powers secure data sharing in supply chains and voting systems, and it reduces reliance on intermediaries, saving time and cost.
What is Hashgraph and How Does it Work?
Hashgraph is a distributed ledger technology (DLT) that organizes data into blocks and uses a Directed Acyclic Graph (DAG) structure. Due to this, transactions are recorded in parallel, rather than sequentially, resulting in a faster and more efficient system.
Unlike blockchain, which builds a single chain of blocks, Hashgraph creates a web of interconnected events, with each representing a transaction or communication between nodes.
Hashgraph employs a unique protocol called “gossip about gossip,” combined with virtual voting, to achieve consensus. In this protocol, nodes randomly share transactions with other nodes, just like gossip spreading in a social network.
These nodes also share metadata about who they talked to and when. This builds a rich history of communication. Using this gossip history, nodes can simulate voting on the order of transactions without actually sending votes, resulting in saving both time and bandwidth.
With this method, the network can reach consensus quickly and fairly, without needing energy-intensive mining or staking.
The most prominent network that uses Hashgraph technology is Hedera Hashgraph. It is developed by Swirlds and co-founded by Dr. Leemon Baird. Hedera offers enterprise-grade services like smart contracts, tokenization, file storage, and consensus-as-a-service.
It’s governed by a council of global organizations, including Google, IBM, and Boeing, which ensures decentralization and stability.
Hashgraph vs Blockchain: How are These DLTs Similar?
While Hashgraph and Blockchain differ in structure and performance, they share foundational similarities that define both of them as Distributed Ledger Technologies (DLTs). They both are designed to create secure, transparent, and tamper-proof records of transactions. Some of their common features include.
Distributed Architecture
Hashgraph and Blockchain both operate across a network of nodes, where each participant node has a copy of the ledger. As these transactions are not controlled by one single node, this creates decentralization, which eliminates the need for a central authority and promotes trustless systems.
Cryptographic Security
Transactions on Hashgraph and Blockchain are protected by using advanced cryptographic techniques. This ensures that the data i safe and no one can tamper with it. Once the data is recorded, it can’t be changed without consensus from the participating nodes.
Consensus Mechanism
While different, both Blockchain and Hashgraph use consensus protocols to validate transactions. The consensus mechanism used by both includes.
- Blockchain uses Proof of Work (PoW) and Proof of Stake (PoS).
- Hashgraph uses Gossip about Gossip and Virtual Voting.
Transparency and Immutability
Every transaction in both Hashgraph and Blockchain is visible to all nodes. These transactions are permanently recorded, which makes these ledgers auditable and resistant to fraud.
Peer-to-Peer Networks
The primary mode of communication in both Hashgraph and Blockchain is peer-to-peer (P2P). This way, users can directly interact with each other without needing intermediate parties.
Hashgraph vs Blockchain: Main Differences
While both Hashgraph and Blockchain aim to provide secure and tamper-proof transaction records, they differ significantly in architecture, performance, and consensus mechanisms.
| Feature | Blockchain | Hashgraph |
| Data Structure | Chain of Blocks | Directed Acyclic Graph (DAG) |
| Transaction Speed and Scalability | Slower due to sequential processing, lower scalability | Faster due to parallel processing, higher scalability |
| Consensus Mechanism | Proof of Work/Proof of Stake | Gossip about Gossip + Virtual Voting |
| Security and Transparency | Cryptographic + Economic Incentives, highly transparent | Asynchronous Byzantine Fault Tolerance (aBFT), limited transparency |
| Cost and Energy Efficiency | Energy Intensive and Costly | Energy Efficient and Cheap |
| Decentralization and Governance | Highly Decentralized, no governance | Less Decentralized due to Hedera Council |
| Ecosystem and Adoption | Widely Adopted and Battle-Tested | Emerging but Promising |
| Use Cases | Cryptocurrencies, DeFi, NFTs | Micropayments, Supply Chain, Enterprise Applications |
Data Structure
In Blockchain, data is stored in blocks that are linked together in a linear chain and are placed chronologically. The transactions are grouped into blocks, and then each block is added to the chain in sequence.
The only limitations on the blockchain are the block size and the time interval between blocks. This sequential nature of the blockchain can slow down transaction processing significantly. It often relies on mechanisms like Proof of Work or Proof of Stake, which can introduce latency.
Hashgraph uses a directed acyclic graph (DAG) where transactions are nodes. These nodes are connected by edges representing communication between participants. In Hashgraph, multiple transactions can be recorded and verified simultaneously, without waiting for a block to be filled.
It has a significantly higher throughput than blockchain, thanks to parallelism and efficient consensus, which is achieved through the “gossip about gossip” protocol. Hashgraph achieves consensus quickly using virtual voting, which doesn’t require heavy computation.
Transaction Speed and Scalability
Most blockchains process transactions sequentially, which limits throughput to roughly 15-30 TPS. While upgrades like Ethereum 2.0 and Layer 2 solutions have helped improve speed, congestion and gas fees can still be issues during peak usage.
Hashgraph can handle thousands of transactions per second, with Hedera achieving over 10,000 TPS, thanks to its graph-based architecture and parallel processing. This makes it ideal for micropayments and enterprise-grade applications.
Consensus Mechanism
Blockchain uses either Proof of Work (PoW) or Proof of Stake (PoS) for its consensus mechanism. In Proof of Work, miners solve complex puzzles to validate transactions. It is highly secure and is used by Bitcoin.
However, it is notoriously slow and consumes a massive amount of energy. In Proof of Stake, validators are chosen based on the amount of crypto they have. It is adopted by Ethereum 2.0, and it improves efficiency, but it still faces scalability and fairness issues.
Hashgraph utilizes gossip about Gossip in combination with Virtual Voting to achieve fast, fair, and energy-efficient consensus. In Gossip about Gossip, nodes randomly share info with other nodes to rapidly spread data. It is fast and lightweight, but it is not tested globally, unlike Blockchain.
In virtual voting, nodes simulate voting based on shared data history without doing actual voting. It is energy-efficient, but it requires trust in the algorithm.
Security and Transparency
In Blockchain, security depends on cryptography and economic incentives for the users. It uses cryptographic consensus via PoW/PoS. Proof of Work makes attacks on the blockchain a costly endeavor, while Proof of Stake ties consensus to stake, which discourages attacks and hacks. On blockchain, anyone can audit transactions, making it highly transparent.
In Hashgraph, asynchronous Byzantine Fault Tolerance (aBFT) ensures consensus even if some nodes act maliciously. It is fast and energy-efficient, but it’s not fully decentralized in practice due to its governing council model. Transparency is limited in Hashgraph, as council members control node access.
Cost and Energy Efficiency
On Blockchain, the fee for transactions in POW ranges from $1–$30+, depending on congestion. In POS, they range from $0.10–$5+, which is a bit cheaper. PoW requires massive computational power, leading to high energy consumption and environmental concerns. However, the energy consumption requirements for PoS are moderately low.
Hashgraph (Hedera) uses a fixed fee model of $0.0001 per transaction. This makes it ideal for micropayments and enterprise-grade apps where predictability matters. Hashgraph doesn’t support mining as its gossip-based protocol and virtual voting allow consensus with minimal resource use, making it eco-friendly and scalable.
Decentralization and Governance
Blockchains like Bitcoin and Ethereum are highly decentralized, comprising thousands of nodes located worldwide. Anyone can join these nodes and participate in validating transactions and contributing to the network’s security.
Decisions on blockchains are often made through community consensus, developer proposals, and occasionally token-holder voting. In blockchains, trust is distributed, which makes the system resilient against censorship and single points of failure.
Hedera Hashgraph is a permissioned network, which means nodes that council members approve can participate in consensus. However, this makes it less decentralized as compared to the blockchain.
The governance is managed by the Hedera Governing Council, which consists of Google, IBM, and Boeing. Each member has equal voting rights in the Hedera Governing Council.
Trust in Hashgraph is placed in a select group of reputable entities, making the system more predictable and business-friendly.
Ecosystem and Adoption
Blockchain is the backbone of some of the most transformative digital movements, such as Bitcoin (the original cryptocurrency), Ethereum (a programmable blockchain), DeFi (a booming sector that offers trading without banks), NFTs (Unique digital assets), and DAOs (community-run organizations governed by smart contracts).
With thousands of developers and users worldwide, blockchain has become a global movement with deep integration across industries.
Hashgraph, especially Hedera Hashgraph, is carving out a niche in areas where speed, cost efficiency, and governance are most crucial. Hedera’s low transaction fees ($0.0001) make it ideal for high-volume and low-value transactions. It supports digital assets and programmable logic with fast finality.
While Hashgraph’s ecosystem is smaller, it’s growing steadily. Regulated industries and mission-critical applications that demand performance and predictability are leaning more towards Hashgraph recently.
Use Case Differences
Blockchain is mostly used for Cryptocurrencies (Bitcoin/Ethereum), DeFi platforms for P2P lending/trading, and NFTs (Non-Fungible Tokens) used in digital art, gaming, and collectibles. These use cases thrive in open and permissionless networks where transparency, decentralization, and community governance are essential.
Hashgraph is used for micropayments to enable high-frequency and low-value transactions with negligible fees. It also helps supply chains with real-time tracking and auditability. Hashgraph is also used in enterprise applications for identity management and secure data exchange.
How Do Other Distributed Ledger Technologies Compare to These?
While Blockchain remains the industry standard and Hashgraph offers a high-performance alternative, there’s a growing field of experimental and innovative models pushing the boundaries of what DLTs can do. Below is a breakdown of DAG-based platforms and Hybrid Consensus Systems.
- IOTA: It uses the “Tangle,” a DAG structure, where each transaction validates two others. IOTA is designed for IoT and microtransactions.
- Nano: It is another DAG-based system with a block-lattice architecture. Nano enables instant and fee-free transactions.
- Fantom: It combines DAG with smart contract support for DeFi and dApps.
For the Hybrid Consensus System, we have.
- Avalanche: It uses a blend of DAG and probabilistic consensus for high throughput and low latency.
- Holochain: It is a post-blockchain framework where each user has their own chain, enabling agent-centric computing.
Future of Distributed Ledger Technologies
The future of DLTs isn’t a winner-takes-all scenario. It’s a dynamic ecosystem where Blockchain, Hashgraph, and other models like DAGs and hybrid consensus systems evolve together rather than replacing one another. These technologies will coexist, complementing each other across industries and use cases.
The following factors in the near future will shape the future of DLTs.
1. Scalability Solutions:
Layer 2 protocols will help blockchain scale without compromising security in the future. DAG-based systems, such as Nano, offer parallel transaction processing, which reduces bottlenecks. Similarly, Hashgraph offers asynchronous Byzantine Fault Tolerance, which enables high throughput with low latency.
2. Enterprise Adoption
Companies are actively embracing permissioned DLTs for supply chain management and finance. Hashgraph is gaining traction in sectors like logistics and advertising, and Blockchain platforms like Hyperledger are getting adopted for corporate use.
3. Interoperability
Projects like Polkadot and Quant are building bridges between disparate DLTs. This cross-chain communication will be essential globally for seamless user experiences.
4. Regulatory Clarity
Governments are moving toward clearer frameworks for crypto and DLTs. With DLTs’ regulatory certainty, institutional investment and broader public trust are expected to increase.
FAQs (Frequently Asked Questions)
Q: Is Hedera Hashgraph a blockchain?
A: No. Hedera Hashgraph is a DLT like Blockchain, but it is functionally and practically entirely different from the Blockchain.
Q: What makes Hashgraph faster than blockchain?
A: Hashgraph is faster than Blockchain due to its DAG structure, which allows gossip about gossip protocol and virtual voting.
Q: Can Hashgraph replace blockchain?
A: No. While Hashgraph can offer faster speeds and cheaper transactions, it can’t replace Blockchain due to its massive global adoption and near-unbeatable security, combined with decentralization.
Q: Is Hashgraph completely decentralized?
A: No. Hashgraph is controlled by the Hedera Governing Council, which compromises its decentralization.
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