Harmony ONE Explained — Could it be the Next Ethereum Killer?

• Harmony is an emerging blockchain ecosystem designed to increase scalability without compromising decentralization.
• It uses a Proof-of-stake consensus mechanism and provides smart contract functionality to develop various dApps.
• It has many new features, like sharding to overcome challenges in the existing blockchain ecosystems.

Harmony is one of the more recently developed cryptocurrencies that have their own blockchain ecosystem. It is touted as a blockchain that perfectly balances decentralization and scalability. It uses a different Proof-of-Stake consensus mechanism to implement greater scalability and security. The company’s motto was — “Decentralization at scale”.

With its exciting new features that enhance the existing PoS blockchains, such as Ethereum, it has great potential to gain widespread adoption. Some say that it could overtake, even replace, Ethereum, which is currently the most used network for various dApps in the crypto space, becoming an Ethereum killer.

What is Harmony ONE

Harmony ONE is a blockchain network founded by Stephen Tse in 2018 that offers excellent speed, scalability, security, privacy, and decentralization. It launched its Mainnet in June 2019 and focuses on enhancing smart contract functionality to develop advanced dApps.

According to Harmony’s white paper, “Harmony’s development focused on the idea that no platform has achieved a satisfying degree of balance between decentralization and scalability.” The white paper also mentions that “Harmony promises to give high throughput with two “lows”: latency and costs.”

It was launched in Binance Launchpad’s Initial Exchange Offering (IEO) in May 2019. It is a Layer 2 blockchain that uses a Proof-of-Stake consensus mechanism.

Its native token is ONE. The ONE token can be used for all activities across the Harmony network ecosystem, including trading, staking, gas fees, earning rewards, etc.

Mechanism of Harmony ONE Blockchain

Harmony uses an adaptive Proof-of-Stake consensus mechanism optimized for random state deep sharding, which is the main reason behind its high block generation speed and extremely low gas fees.

Sharding is a method to distribute data from a database into multiple smaller segments to execute multiple transactions at the same time. These smaller segments are called shards. This reduces the latency of the system and allows instantaneous transactions.

Harmony goes a step ahead and uses deep sharding, which means sharding on both consensus and transaction layers. This enables the processing of data on individual shards parallel to one another. Parallel data processing helps avoid network congestion. Currently, Harmony blockchain runs on 1,000 nodes across a network of 4 shards.

The process is highly secure due to the procedure of randomized distribution of nodes to the shard. The distributed randomness is generated by the system, which makes it very difficult for malicious entities to identify the specific shard whose data they intend to attack. This is called the Distributed Randomness Generation (DRG) technique.

Furthermore, a specialized protocol is used by Harmony–Fast Byzantine Fault Generation (FBFT) Protocol, which is a variant of the Byzantine Fault Generation (BFT) Protocol. BFT Protocol allows the blockchain to keep functioning without disruption in the event of a system failure.

BFT increases network speed and efficiency by minimizing communication between the nodes. FBFT or Fast BFT further speeds up the process by simultaneous signing of the transactions by using an aggregate signature. This can get as fast as 250 validators reaching a consensus in just 2 seconds.

Other Advancements

The network also provides secure cross-chain interoperability by a feature called ‘ETH Bridge’. The specialty of this cross-chain bridge is that it can not only connect PoS chains to PoS chains but also establish a successful connection between the PoW chain and PoS chain, without third-party involvement. It employs the FlyClient Architecture, a modern mechanism for blockchain verification.

Another highly attractive advancement is that Harmony can be operated on smartphones. This eliminates the need for heavy hardware like a personal computer. It improves access to potential billions of users from developing nations, who cannot afford the expenses of a personal computer.

Needless to say, these highly advanced mechanisms and transaction techniques substantially reduce gas fees and transaction fees over the network. Furthermore, the network’s cross-chain capabilities and secure bridges open floodgates of possibilities for NFTs and the development of various apps.

These characteristics of Harmony make it a key competitor in the space of decentralized finance and other widespread applications of blockchain.

It is a promising ecosystem for digital assets, data sharing, decentralized marketplaces, highly efficient dApp development, gaming, etc., for future decentralized trustless economies. The network’s fiat ramps and FinTech integrations give it a high degree of decentralization because of greater globalized outreach.