Hashgraph vs Blockchain: How Hashgraph Consensus Works

The main difference in hashgraph vs blockchain is how nodes agree on the order of transactions. A blockchain lets one producer choose each block, while hashgraph computes the order from a shared record of who told what to whom. This page explains how the hashgraph algorithm works, what it guarantees, and when a project should build on it.

Leemon Baird invented the hashgraph algorithm, and the public Hedera network runs it. The practical side of building on that network is in the Hedera hashgraph development guide.

Hashgraph vs blockchain at a glance

Gossip about gossip

In most blockchains, one node proposes a block and the other nodes accept or vote on it. Hashgraph has no leader and no blocks; instead, each node picks another node at random and sends it every event the other node has not seen. This exchange is called a sync, and every sync creates a new event. An event records five things:

• new transactions that the creator wants to submit,
• a timestamp from the creator's clock,
• the hash of the creator's own previous event, called the self-parent,
• the hash of the last event from the node it just synced with, called the other-parent,
• the creator's signature.

Each event points to two parents, so the events form a directed acyclic graph: the hashgraph. The graph records the transactions and also which node heard each event from which node, and when. This record of the gossip is what the name "gossip about gossip" means.

Virtual voting

Every honest node ends up with the same graph. From that graph, each node can calculate how every other node would vote in a classic Byzantine agreement protocol, so no vote messages cross the network. The steps, in simplified form:

1. Divide the graph into rounds. An event starts a new round when it can "strongly see" enough witnesses from the round before. Strongly see means the event reaches those witnesses through paths that cover more than two thirds of the nodes.
2. Find the witnesses. The first event that each node creates in a round is that node's witness for the round.
3. Decide fame. Witnesses in later rounds vote on whether each earlier witness reached most of the network quickly. A witness with more than two thirds "yes" votes is famous.
4. Order the events. When a round's famous witnesses are known, every event that all of them received gets a round number and a consensus timestamp. The timestamp is the median of the times at which the famous witnesses' creators first received the event.
5. Apply the transactions. Every node applies the transactions in the same consensus order, so every node reaches the same state.

The median timestamp gives hashgraph its fair ordering. One dishonest node cannot move a transaction ahead of another by changing its own clock, because the timestamp comes from the whole network.

Limits of the hashgraph guarantees

The aBFT guarantee holds only while more than two thirds of the voting weight is honest. On Hedera, voting weight follows the HBAR staked to each node, so if one party controls one third of the weight or more, the guarantee fails.

Fair ordering means fair relative to when the network received a transaction, and a node operator can still see a transaction early and submit its own transaction at once. Fair ordering makes that front-running window smaller, but it does not remove it.

Hedera also has a permissioned node set today. Council members run all consensus nodes, while Bitcoin and Ethereum let anyone run a node that takes part in consensus.

Is hashgraph open source?

Early critics of hashgraph pointed to the patents held by Swirlds, the company Baird co-founded. In January 2022 the Hedera council voted to buy the hashgraph intellectual property from Swirlds and release the code under the Apache 2.0 license. In September 2024 Hedera gave its full code base, including the consensus algorithm, to the Linux Foundation Decentralized Trust, where it is now the Hiero project. Anyone can read, fork and run the code without a commercial license.

Ways to build with hashgraph

Consensus code is very hard to write correctly, and some bugs appear only under hostile network conditions, so few teams write the algorithm from scratch. Most take one of three routes:

• Build on the public Hedera network. Most projects take this route: you send transactions to the council-run network and get final results within a few seconds.
• Run a private network from the Hiero code. A research team or a consortium of known members can use hashgraph ordering this way, but running your own consensus network is a large operations job. Hyperledger Fabric and Quorum are other private blockchain options with larger operator communities.
• Use hashgraph as an ordering service. Your application posts messages to a Hedera Consensus Service topic and processes them itself. The topic gives a timestamped log that nobody can change, and your business logic stays off the ledger.

Hashgraph vs other DAG ledgers

People often group hashgraph with other ledgers built on a directed acyclic graph (DAG), but the designs differ. In the original IOTA Tangle, each transaction approved earlier transactions, and a central coordinator protected the network for years. Other DAG designs spread data through a DAG and order it with a separate BFT protocol, while hashgraph feeds the DAG itself into a fixed voting procedure. The guide to directed acyclic graph ledgers compares these designs.

When hashgraph fits a project

Hashgraph suits projects that need fast, final ordering with fair timestamps, such as audit logs, supply-chain events, ticketing, the order of bids in an auction, and high-volume micropayments.

A blockchain such as Ethereum suits a project that depends on Ethereum DeFi liquidity and composability with existing contracts, or users who want to run a validator themselves today.

Frequently asked questions