Latest Hight: $16.02
5,299.24 % 5299.23675484035
Area to disrupt: linking DAG and blockchains
Competition: IOTA (MIOTA), Byteball (GBYTE), Hybrid consensus coins (DCR, DASH, XZC)
ICO token: yes (2017), hybrid consensus (PoW & PoS)
The main feature of the consensus scheme of Hcash is linking different blockchain-based cryptocurrencies with DAG-based (Directed Acyclic Graph) cryptocurrencies. The key idea behind the project is related to the fact that the blockchain model has proved to work for now, in the sense that it provides security and robustness and sometimes privacy. Blockchains such as Bitcoin and Ethereum have been widely tested and studied and they are considered to be reliable.
Recently, DAG-based cryptocurrencies are gaining more popularity as a new breed of decentralized systems such as Byteball and IOTA. The trade-off of DAG is that it has not been studied enough. There is a certain lack of empirical data of its security and there have not been sufficient trials in practice. There are security issues with DAG-based systems. For example, IOTA’s users were robbed of USD 4 million because of faulty wallet security of the IOTA client. The security of DAG relies on the transaction frequency and centralized servers. For instance, Byteball's security depends on few “witness” nodes, which are operated by a centralized entity.
Hcash adopts the blockchain-based model for its rigorous security with the intention of connecting blockless DAG systems (Byteball, IOTA) with blockchain systems (Bitcoin, Ethereum, etc.). It aims to unite the best of both worlds.
The proposition of the project is to use novel hybrid consensus model by combining the strength of both Proof-of-Work (PoW) and Proof-of-Stake (PoS) algorithms. It aims at high throughput and higher efficiency while at the same time preserving security. The hybrid consensus model allows for the miners to take part in the consensus process. This way the security of the blockchain is guaranteed. The PoS and PoW would also be integrated to serve in a DAO-based system for funding of future protocol improvements. The DAO (decentralized autonomous organization) will allow each holder and miner to participate and vote for decisions about the protocol upgrades. The DAO would be used to govern Hcash in a hierarchal similar structure, where the vote of users will be based on their stake of the currency (PoS) as well as their computing power (PoW).
Some of the features that Hcash will implement eventually are a post-quantum digital signature, smart contracts, and post-quantum privacy-preserving scheme.
The main argument for Hcash to exist is that blockchain payments are not suitable for microtransactions or smart contracts, whereas the DAG systems are more suitable for that. Hcash will facilitate the transfer of value between these two platforms and this is the first time something of that sort is being created.
The culture that Hcash wants to create is that in order for a new technology to be truly revolutionary, it has to combine the best of all worlds, to take the best qualities from all existing sources and create a hybrid.
The privacy aspect in Hcash is on a high level by adapting Zero-knowledge proofs. This allows users to only disclose certain information about their transactions that is just enough for the verifier to validate the transaction without the need to reveal their identity. One of the most famous cryptocurrencies using Zero-knowledge proofs, which is also a pioneer in that field, is Zcash.
The idea of Hcash is unique and it is definitely a coin to be interested in. If it accomplishes what it promises, it would mean that the cryptocurrency space can be united, so that any cryptocurrencies can interact with each other without the need of centralized exchanges. Hcash is also preparing for the quantum computers, which pose the risk of breaking all types of cryptography through brute force. The developers are preparing the protocol for when those computers become a reality and are working on coding quantum resistance.