individuals, being willing to change your mind is generally seen as a
good thing – it suggests flexibility and a willingness to accept new
data or evidence, even if it contradicts a previously held belief.
Not so for a consensus node in a distributed ledger.
Once a consensus node decides on the proposition under consideration –
for it to later change its mind complicates the goal of the network as a whole agreeing on that proposition.
blockchains, the proposition under question is generally "what block
should go on the end of the chain?" Blockchains differentiate
themselves by the mechanism by which this question is decided. Some
blockchains simply have different nodes take turns proposing a block
and, as all nodes know whose turn it is, there is no uncertainty over
the decision. If the decision process is not so deterministic, it may be
possible for there be two valid blocks at a moment in time, and so no
immediate answer. In Proof-of-Work (PoW) chains, the miners
race to complete the hash puzzle and so win the right to have their
block picked as next. As it is possible for two miners to both solve the
puzzle around the same time, both proposed blocks are valid candidates
to be chosen to be placed at the end of the chain. With both blocks then
sent out to the rest of the network by the miners that created them
(eager for the associated reward), the network must reconcile the
disagreement. Both blocks deserve to be placed at the end of the chain, but only one can be. Which to choose? The chain, until the uncertainty is resolved, has split or forked. PoW
chains typically resolve the issue by waiting until another hash puzzle
race is completed - the winning block will have necessarily chosen one
or the other of the earlier competing blocks. Whichever earlier block
was chosen by this new block is retroactively blessed and the other
discarded (or orphaned). This is the so-called "longest chain" rule for
resolving chain forks - participants agree to build on the longest chain
if there is a choice to be made.
two earlier candidate blocks inevitably contained different sets of
transactions - as the miners that created those blocks would have had a
different set of transactions waiting in their different mempools. It’s possible that a particular transaction was in one block but not the other. Consequently, it’s
possible that a given transaction is in the block that is orphaned but
not in the block that is part of the longer chain. If so, then that
transaction won’t be processed by the network. For instance, a BTC transfer won’t
be made or a smart contract call on Ethereum won’t happen. For whoever
sent the transaction, sorry about that. It will still be sitting in the
so it will hopefully be added to a later block. But critically, if
there had been any exchange of value based on the assumption that the
transaction in question was going to go through because it was in a
block that had satisfied the hash puzzle, then someone will be
disappointed. Using the archetypical coffee shop example - if the barista
served the latte based solely on the payment being added to a confirmed
block, then the customer may get the latte for free if the payment
transaction is orphaned and never gets into a subsequent block.
A more nefarious scenario has an attacker attempt to manipulate the above temporary uncertainty - if they can send two different transactions spending the same coin into two winning blocks, then it’s
possible that they can obtain value for each payment - effectively "double-spending" the coins. As explained above, the network will
eventually resolve the discrepancy and only one transaction will be
deemed valid, but that will likely be little consolation to whoever gave
up something of value in exchange for the transaction that was deemed
It is for this reason that PoW
chains recommend that those parties who rely on a payment being
successfully processed wait a certain number of blocks to be added to
the chain beyond the block the transaction in question is in. In
Bitcoin, the recommended best practice is to wait for a total of six confirmations before assuming that the transaction won’t be in a block that gets orphaned - or the chain to be reorganized.
As each block takes ten minutes on average, the best practice is to wait
an hour before being fully confident that a BTC transaction is "good".
Ultimately, however, it’s
a personal decision. For a latte, the coffee shop might be okay with one additional block. For someone selling a house, they would likely choose
to wait the full hour or more before handing over the keys.
additional blocks are added to the chain, the chances of a
transaction in an earlier block being orphaned decrease quickly. After six block
confirmations, the chances of a reorganization are very small, but not zero.
There is always the theoretical chance that another chain, longer than
that which a miner thought
was the longest, will be discovered. If so, then the rules require that
everyone switch - discarding the erstwhile longest chain (and unfortunately effectively throwing away the electricity spent on its creation).
chains, miners are required to be willing to change their minds about
what chain to build on, and so there is always a chance that
transactions previously assumed to be "locked-in" will be retroactively
thrown out. Participants must account for this uncertainty.
In the hashgraph algorithm, the proposition under question that nodes must collectively establish agreement on is "is this particular witness famous?" The hashgraph data structure connects together groupings of transactions called "events". Certain events have a special place in that structure and are called "witnesses".
Some witnesses are even more special – they are deemed "famous". You
can think of famous witnesses as those that are deeply woven into the hashgraph – like human celebrities, everybody "knows" them. All nodes look at the same hashgraph, identify the same set of witnesses for a certain portion of the hashgraph, and use the same algorithm to determine the famous witnesses within that set. Once the famous witnesses are determined, then it’s a straightforward process to calculate timestamps for earlier events within the hashgraph. All nodes
identify the famous witnesses and perform the timestamp calculation
separately, without any additional confirmations or receipts beyond the
gossiped events themselves – but nevertheless come to the same
And critically, once a node determines which witnesses are famous in a given section of the hashgraph, they won’t change their mind. If a node determines that a particular witness is not famous, then there is no possibility that it will receive additional information that will cause the node to reevaluate and instead determine that the same witness is famous. Nodes make a choice, and then stick with it. Of course, nodes don’t decide lightly, a node won’t decide on the fame of a witness until it receives sufficient evidence to support the choice - famous or not. The algorithm requires that nodes see agreement from more than 2/3 of the network before making the decision. With such a hard threshold, once a node is able to count enough votes
and decide on fame of a particular witness, then hearing from any more
of the network, whether that additional information affirms the choice
or otherwise, is pointless. In fact it’s more than pointless, it’s wasteful and inefficient. Once nodes reach the threshold, they move on to the next decision - determining the fame
of more recent witnesses. Another voting system that has a similar
threshold and so similar finality is the US electoral college - once a
presidential candidate receives 270 electoral votes, they are the
winner. The states keep counting beyond that, but technically they don’t need to.
The above stubborn certainty for hashgraph
nodes on the fame of witnesses is called "finality" of consensus. And
finality in determination of the fame of witnesses translates into
finality of the consensus timestamps and order of all events within the hashgraph (not just witnesses or famous witnesses). Once an event is assigned a timestamp and place in the full order, it won’t change. It can’t change; that would require that a set of famous witnesses changed and, as we saw above, nodes will not entertain that possibility.
finality of consensus, you must always to a certain extent "hedge your
bets" - anticipating the possibility of a transaction being rolled back.
It’s complicated. With finality, things are simpler. A dapp that sends a transaction into the Hedera mainnet and receives a receipt three seconds later with the consensus timestamp for that transaction doesn’t need to ask again three seconds later. Or six seconds. Or nine seconds. The answer will never change. And,
with confidence that neither the consensus timestamp nor order of a
transaction will ever change, the barista (or exchange, or supply chain
partner, or vaccination clinic) can be equally confident that the
transaction can be processed immediately with no risk of subsequently
needing to be rolled back. Finality becomes particularly important when dealing with sharding or cross-chain interoperability.
There is no equivalent risk of double-spend in hashgraph as described above for PoW. If an attacker simultaneously sends two transactions into the network that together spend more hbars than in the balance of the account - both will receive a consensus timestamp and order. One will be deemed to have occurred earlier than the other. The later transaction will be rejected by all nodes as spending hbars that the account doesn’t have. The timestamps for the two transactions won’t change, and so neither will the determination of which transaction was earlier and valid.
With hashgraph’s finality, a transaction’s timestamp, order, and validity will not change - you can take it to the bank (or maybe you are the bank?)