What is Hedera Hashgraph? (Mance Harmon)

– We first used Hashgraph
for enterprise applications. Then we developed the code
base to be enterprise grade for those customers. But we always knew that
was just Phase One. And we were patient,
thoughtful, sober minded and made plans for Phase Two. Tonight, I’m pleased to
introduce you to Hedera. It is a public platform, a
public Hashgraph network, with a world-class governing council. In Hedera we have solutions
to these problems. It’s built on the Hashgraph platform. This is the same platform that
we’ve been building for years and delivering to our enterprise
customers and partners. Tonight Lehman is going to make
some important announcements about the performance of our
platform that we haven’t yet released to the public. In terms of security, Hashgraph
as an algorithm achieves a gold standard of security in the world of distributing consensus. It’s called Asynchronous
Byzantine Fault Tolerance. What does that mean? Practically, what that
means is that Hashgraph is resilient to distributive
denial of service attacks that other platforms simply aren’t. Any platform that has a leader
or a coordinator or some type of synchronous process that
it depends on is susceptible to D-DOS attacks. Representative algorithms
are paxahaus and graft and PBFT and depocs. In addition, Hashgraph addresses
a whole set of concerns that other platforms
don’t even consider today. We refer to this property
in Hashgraph as fairness. It brings fairness to the
consensus system itself. It ensures that transactions
actually count as happening when they reach the network. It also ensures that
there’s no single party that can prevent transactions
from entering the network nor can a single party control
the final consensus that the community ultimately agrees upon. No single party can influence
the order of transactions for the community. In other words, practically,
what I’m saying is that Hashgraph can for the first
time, directly address the creation of provably
fair markets, auctions, time limited business
transactions and games. Only Hashgraph has this
fairness property and has math proofs that it in fact
exists in the algorithm. What about stability? The Hedera platform provides
a set of controls that makes it possible to actually bring
stability to the platform. Tonight Lehman will introduce
a concept that we call state proofs. And simply stated, state
proofs make it impossible for a network node running in
platform to make a copy of the platform, an official copy,
an official copy of the ledger if you will, make changes and
then pass off those changes as being accepted or valid. Hedera also makes it possible,
the state proofs make it possible for the governing
body to specify what changes should be made to the modes,
but then ensure the precise time that those changes are
applied to the nodes in the network and guarantee that
they are applied to the nodes in the network. In addition, Hedera brings
legal controls to the platform that others don’t have. The Hashgraph technology is patented. What does that mean for you? First off, no license is
required to use the platform. No license is required
to use the services. No license is required to
build smart contracts on the platform. The software that you end up
developing is your software, you can license it however
you want, and it will not be encumbered in any way by Hedera. You never even have to talk to
us if you wanna build product applications on top of the platform. That’s not what the patent is for. In addition, what we are
going to do with Version One is release the source
code for open review. Anybody that wants to take a
look at the source code will be able to do so, download it,
read it, review it, compile it and verify that it’s correct
in the same product that is being downloaded to be run
in the nodes of the network. The bottom line is that we
will have a stable, transparent platform that encourages both
open innovation but the code base and the crypto
currency will not fork. Hedera will not fork. I promise you. (audience applauses) Well, if we have those
mechanisms to provide a stable platform, what’s the right
governance model, you know? What is it that we should
build in terms of governance that is equal to the technology
that we brought to the table We have a split governance model. Open consensus with permission governance. Open consensus simply refers
to the notion that anybody that wants to run a node
in our network will be able to do so. At scale, we anticipate
that there will be millions of nodes in the network. They’ll be running these
nodes on regular computers. Nodes run by regular people
on regular computers, okay? In addition, we have a
permission governance model for the organization itself. The operations of Hedera
as an organization. What does that mean? Well, when it comes to pricing,
technical roadmap, legal aspects of the organization,
marketing, regulatory concerns. All of the parts of the
business for this, we have established a council. We have taken and applied the
design theory that was first introduced by Dee Hawk back
in the 1960s when Dee founded Visa. Prior to it being Visa
it was Bank Maricar. We’ve taken his design
principles and applied them to Hedera’s governance model. This is a model that is not
in the market today but we believe solves the governance
problems that we see in our industry today. There are 39 industry leading
organizations that will end up being a part of this organization
that provide the governing council. These members will provide
expertise in business, technical aspects, legal, regulatory,
all of the things I’ve previously mentioned. We’re not just gonna
have a list of advisors. We are going to have a council
of decision makers that are providing the stewardship of
the platform and the associated crypto currency. We are working to finalize
the governance terms. When these discussions
and work is completed we will make an announcement
about who these members are within the organization. So what about the platform? Where are we in this process? Right? There is a test network
up and running today on three continents. It’s built on top of the same
platform that we’ve already used for enterprise applications,
the Hashgraph consensus platform that we’ve
already taken to market. On top of that platform there
is a crypto currency service that supports native micro
transactions. Micro payments. In addition, we have a distributed
file storage system for applications built on top of
the platform that brings a set of security guarantees that
I think are new and unique in the market. Lehman will talk about that
a little bit later tonight. And then finally, what
about smart contracts? Right? Everybody wants to
know about smart contracts. We’ve taken the ethereum virtual
machine we put it directly on top of the platform. We support solidity scripts. Out of the box. Right? All of this is happening now. Today the test network is
restricted to internal testing and working with a few beta customers. That will change very quickly. I’m anticipating that we will
begin to open up the network to additional beta
customers as early as May. Maybe the end of April, as
early as the first part of May. And, of course yes there is a
token, a coin, associated with this platform. Why is it that we have a coin? There are two reasons. Number one you have to have
a crypto currency or at least a scarce resource in a public
ledger to provide the security of the ledger. In a public ledger there has
to be something that provides scarcity to prevent certain
categories of attacks against the consensus process. The crypto currency provides
the needed scarcity. So the crypto currency actually
is required to ensure the security of the network Secondly, when applications
use the platform and they make API calls to the services I’ve
just listed, at the same time they will be making micropayments
for the use of those APIs. So with every API call, a
micropayment will be made using the platform crypto currency. In other words, the token is
needed for the functioning of the platform. In summary, we have solutions
for the categories of the problems that I’ve outlined previously. We provide the needed technology,
security, stability and a governance model that we
believe will move the industry forward in a way that it has
previously not been able to achieve. (applause) This symbol is called an
H-Bar and tonight, we are dramatically raising the
bar for the industry. Tonight, we are raising the H-Bar. (applause) So are we going beyond one
small group of nodes to provide consensus, beyond one person
to control the codebase beyond one company to
trust for expertise, beyond one sector of applications
and use cases and beyond one government for the stability
of a global crypto currency. We are Hedera and tonight we
welcome you to the future. (audience applauses)

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