Fortune 500 companies such as IBM, Microsoft and Oracle have warmed to the idea of distributed ledger technology (DLT). Forward-thinking countries like England, Japan and South Korea have given it trial runs.
And smart people have celebrated it. They include Tapscott Group CEO Don Tapscott, author of “Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World,” who told McKinsey.com that blockchain is “the biggest innovation in computer science.”
Others have chimed in. Liana Douillet Guzmán, Blockchain’s senior vice president for growth, told McKinsey that the technology could touch virtually every industry. Chris Skinner, chairman of the European networking forum The Financial Services Club and Nordic Finance Innovation, wrote in the The Finanser that the impact of DLT will be felt not only in the financial space but also the governmental and commercial realms as well.
Yet blockchain hasn’t taken off just yet. The World Bank Group, citing things like consumer-protection issues and legal, regulatory and technological concerns, does not have any recommendations on its website for the use of DLT in international development, but adds that it is engaged in an ongoing dialogue with “standard-setting bodies, governments, central banks and other stakeholders to monitor, research and pilot applications” based on the technology.
It is, as a result, important to recall something else Skinner wrote — that with any technological breakthrough there is a tendency not only to overestimate the speed with which it might take hold but also to underestimate the impact it might have.
That certainly seems to apply here.
So what, exactly, is DLT? It is an online system capable of recording transactions in multiple places simultaneously. It is peer-to-peer based, with no need for a central coordinating authority.
Blockchain – just one form of DLT — has served as the foundation for the cryptocurrency Bitcoin. Many have touted blockchain’s versatility and power and have claimed it will emerge the undisputed leader in the DLT race to the top of the proverbial distributed ledger heap.
However, astute industry observers, such as myself, are fast becoming more appreciative of alternative DLT platforms that promise to be much more robust and transformative across a wider range of industry applications.
Of particular note is Hashgraph, a DLT built for the age of the Internet of Things. According to its whitepaper, the technologies behind this self-styled ‘blockchain killer’ are reiterations of two 30-year-old simple computer science algorithms, the gossip and voting protocol, which Hashgraph has reinvented as ‘gossip about gossip’ and ‘virtual voting.’ Its algorithm requires no proof-of-work mining and it is claimed it can handle hundreds of thousands of transactions per second, dwarfing the processing speed of even major credit card companies, like Visa.
Just days ago, Hedara Hashgraph, the company formed to help capitalize the Hashgraph DLT platform, raised $100 million from institutional investors and announced a valuation of $6 billion. With the money raised, Mance Harmon, CEO of the Dallas, Texas-based company, noted in an interview with VentureBeat that “the Company hopes to disrupt the world’s financial systems.”
Knowing what I now know about emerging DLT platforms, my money is on Hashgraph doing just that.