They were the first to integrate staking and sharding in the blockchain, achieved an amazing speed, and united an impressive community around them.
We consider Harmony blockchain and its ONE currency, a promising altcoin that now costs so little that it can’t fail to attract investors.
The main problem of modern crypto projects is the blockchain trilemma. Vitalik Buterin, the founder of Ethereum, formulated it as consisting of three cornerstones: decentralization, security, and scalability.
Blockchain developers face a choice: to sacrifice security for the sake of distribution and speed, or to choose the security with speed, and treat decentralization symbolically, as in Binance.
The developers of Harmony claim that they have solved the trilemma. They explain that this is made possible by the introduction of staking and sharding, which scales blockchain without compromising security or decentralization. But first things first.
Dr. Tse And His Team
Stephen Tse, Doctor of the University of Pennsylvania, who specializes in cryptographic protocols and type theory, founded Harmony in 2017. Before that, he worked for several years at Microsoft, Google, and Apple, including that he became the chief technical officer of the latter company. The team of blockchain founders also included twelve specialists who previously worked with the listed companies and with Amazon.
The project goal was to create an open, decentralized, and reliable blockchain platform for global DeFi users. The preparatory period of the launch took place in San Francisco, where the community began to hold regular meetings, attracting potential investors. At the same time, there was active work in writing the necessary software and whitepaper.
ONE Token — Young, Promising, And In Active Search
By the beginning of 2019, the project attracted a fairly wide range of supporters, and the initial coin offering announced that year was $18 million of investments.
Harmony ONE utility token started in June 2019 with a modest two cents per unit. Its purpose, like many similar ones:
- token holders get the right to vote;
- token can be used to pay for transactions and storage;
- it can be used for staking, and stake holders receive a reward.
The initial issuance was 1.5 billion tokens out of a planned 12. After long subsidence below the level of a cent, it began a gradual increase in February 2021, but it only once reached 20 cents — in March of this year.
However, an expert assessment of the project allowed Nasdaq exchange analysts to include a token among the 7 best altcoins under $1 to buy in July 2021. The rating serves to attract the attention of investors, formed for the attention of investors, which usually has a positive influence on the future of assets. But even without that Harmony showed impressive results in a short time — the cryptocurrency capitalization level is close to $800 million, which allows it to enter the top hundred currencies according to CoinMarketCap.
Harmony — You Won’t Find Another One Like It
What attracted the attention of the platform. Even before the launch of the main network, in 2018, the founders of Harmony stated that in their development they were taking a course to combine proof of ownership with sharding. They are not the only ones — Ethereum 2.0, NEAR and others have chosen the same path.
For many, the theoretical hopes of integrating staking and sharding were quickly replaced by the frightening technical complexity of designing such a system. This is because staking must be coordinated across the entire network, while a PoS consensus must be achieved in each shard. Achieving harmony among all shards, i.e. effective cross-shard communication, is the very goal the platform was aiming for.
Harmony is the beautiful music when we sing in different notes but resonate. It’s analogous to our high-performance protocol of multiple shards but reaching consensus. From the project description.
If you want to feel it, listen to the corporate song of the blockchain from the legendary commercial.
On May 19, 2020, Harmony announced a successful network update: a split into four shards, support for staking, with instant consensus between its components, and randomization ensuring security. Such a solution to the blockchain scalability trilemma.
You won’t find another chain that can support the same performance, processing speed, same extremely low cost, and same level of decentralization. Nick White, one of the founders of the project.
Bragging? At the start of Harmony, the transaction took 8 seconds, and the updated network consisted of over 320 nodes.
And a year later, that is, at the moment, the indicators have improved. The four main network shards consist of 1000 nodes (250 each), which produce blocks every 2 seconds. The cost of transactions is only $0.000001.
The nearest competitors, Cosmos and Polkadot, take 7 and 12 seconds (respectively) to complete a transaction, have a network of 120 and 200 validators, and only in terms of payment are almost equal to Harmony.
Going Beyond The Trilemma
Back to the technological innovations of the platform that allow us to loudly announce going beyond the blockchain scalability trilemma.
How Centralization Was Leveled
Blockchains based on the Proof-of-Stake consensus algorithm have been criticized for their economics — “the rich are getting richer”.
In Harmony, the staking mechanism is called “Efficient Proof-of-Stake” and is designed to solve the problem of imbalance by limiting the reward of large participants and increasing the reward of smaller participants. The algorithm directly initiates delegation of authority between consensus participants, leading to an open network of nodes that are managed by a large community.
How Do They Achieve Security
Harmony divides not only nodes but also blockchain states into shards, linearly scaling all three aspects: computing power, transactions, and repositories.
To prevent a single shard attack, the network operates many nodes that are regularly resharded using verifiable delay functions (VDF) to create shards with an unpredictable set of members.
How this ensures security can be seen in the illustration. According to the conditions, 200 out of 1000 nodes are malicious. Random assignment should guarantee the predictability of the loss of participants, which in the regular nature of resharding makes the attack pointless — manipulative participants are simply removed from the network.
It is ensured by an enormous number of validators, whose nodes are also responsible for network security. According to the developers, the network will potentially be able to process up to 10 million transactions per second.
Given that the World Wide Web is hardly capable of providing such a bandwidth, which means that such statements in principle cannot be verified in practice, it is surprising — why did the developers stop at this number?
The Harmony blockchain commands respect for its community size, speed, and reliability. Its focus on decentralized applications, technical performance, and the low cost of the token also makes it attractive. Whether this is enough for success, the filter of competition on the crypto market will show. It should be borne in mind that Harmony has to compete with blockchains based on the same operating principles and with more impressive technological characteristics — NEAR and Free TON.