The team behind a soon-to-be-launched cryptocurrency has issued the notable claim that it will be un-forkable.
Announced today, Hedera is a public network built on Hashgraph, a type of distributed ledger technology (DLT) developed by the software company Swirlds, which has already deployed private versions with several enterprise clients.
Hedera Hashgraph, the governing body for the network, raised $18 million through a private sale of the as-yet-to-be-named token in January. That sale, the company said, represented less than 20% of the total supply.
Different than a blockchain, Hashgraph is billed as more secure, scalable and “fairer” than either the proof-of-work mechanism securing bitcoin or the permissioned systems that banks and other corporations have been experimenting with. The creators say the Hedera version can facilitate micropayments, distributed file storage and support smart contracts out of the gate.
But perhaps what’s most striking about Hedera is the use of a patented – rather than open-source – codebase in an otherwise open network.
While the code will be publicly reviewable, and developers will be free to build applications on top of the network without a license, the governing body for Hedera says it will enforce the patent to prevent copying of the codebase or the creation of a competing platform and associated currency.
Mance Harmon, a co-founder and the CEO of Swirlds, calls this situation “transparency with stability.”
“We can guarantee our platform will never fork,” he told CoinDesk, adding that it will be “one platform with one currency forever.”
While the option of forking is viewed by many in crypto as a positive, since it allows those unhappy with a particular project’s direction to go their own way (not to mention sometimes providing free money to those who hold the original token), “we view that as a hindrance to mainstream market adoption,” Harmon said.
Hedera’s white paper lays out the rationale this way:
The hard forks that bitcoin & ethereum have experienced have arguably damaged the network effect of their corresponding currencies – creating confusion & uncertainty in the marketplace. Similarly, the explosion of altcoins (and the dubious legitimacy & value of many of them) does not engender the necessary confidence in businesses & consumers considering adopting crypto currencies.”
Swirlds, which patented the network technology, granted an irrevocable license to Hedera Hashgraph, the governing body, for use in the public network, according to Harmon.
Visa as a model?
In another departure from the usual set-up of a public network, the actual governance process for Hedera is permissioned, or restricted to only certain parties.
Hedera Hashgraph consists of 39 “known and reputable organizations,” according to the white paper, all of whom collectively own two-thirds of the supply of the network’s token.
Swirlds is one of the 39, and a spokeswoman said the other names would be announced in the coming weeks. Harmon said they include banks as well as companies working in the healthcare, media and legal industries.
“The goal was to make sure no single party has no more or less influence over the network than any single party,” said Harmon. All the 39 members are “on par with one another,” he explained.
The model was the governing structure that Dee Hock used in 1968 to create National BankAmericard, which is known today as Visa – again, not the usual cypherpunk inspiration. According to the white paper, the governing body will control the money supply and manage changes to the codebase.
Arrow in road image via Shutterstock