What is Harmony (ONE)? Your ultimate guide
Harmony is attempting to solve the scalability trilemma, but will it succeed?
- What is sharding?
- Random state sharding
- Harmony founders
- What is Harmony coin used for and how does Harmony work?
- The Harmony exploit
For cryptocurrencies to realise the goal of becoming a global alternative to the traditional centralised banking system, they have to be fast, efficient and low cost.
The problem is that up until now, blockchains have struggled to scale up without compromising on security and decentralisation. This conundrum, known as the scalability trilemma, has held crypto back.
Harmony (ONE) claims to have solved this by developing a specific type of operation called random state sharding. But what is sharding? And how might random state sharding speed up the mainstream uptake of crypto?
What is sharding?
Decentralisation is no doubt what makes crypto alive with disruptive potential. However, it is also a feature that makes processing transactions slow and inefficient. This is because all transactions have to be processed and validated by nodes on the ecosystem for the new block to be mined.
On traditional blockchains, all the nodes are operating on the same main chain. Sharding splits blockchain networks into separate shards. Each shard is made up of its own data, making it distinct from other shards on the network.
On the Harmony cryptocurrency ecosystem, validators are put in multiple groups on different shards. Transactions can be approved on the different shards simultaneously. Different shards can process and store different kinds of data. Simply put, sharding divides the transactional workload, compartmentalising the work.
Random state sharding
Random state sharding is the specific iteration of sharding adopted on the ecosystem. This process purports to be much more secure than the normal sharding process. Sharding, while effective in speeding up transactions, has the potential to weaken the security of the blockchain. A hacker could technically take over a shard and corrupt it by introducing false transactions.
On the Harmony ecosystem, however, according to its website, the set-up prevents single shard attacks by ensuring there are at least 250 nodes per shard. The ecosystem also re-shards regularly through a random cryptographic process called Verifiable Random Function (VRF). This process means validators and nodes are assigned and re-assigned shards in a random way.
Harmony is certainly not the only crypto platform adopting some iteration of the sharding method, but the ONE coin soared in value in early January. This may be in part because the Harmony protocol is able to process 2,000 transactions a second, the same number as Visa. In the near future, it is hoped that it will be able to process one million transactions a second. Compared with Ethereum 2.0, which estimates it will be able to provide 100,000 transactions a second, Harmony’s claims are certainly ambitious.
But solving the scalability trilemma is not Harmony’s only offering. With lower gas fees than Ethereum, cross-chain capabilities and an energy-efficient validating process, Harmony would appear to have a very impressive range of unique propositions.
But who founded Harmony? And what about its native token, ONE?
Stephen Tse founded Harmony in 2017. He received his PhD in cryptographic protocol from the University of Pennsylvania in 2007. He founded several tech start-ups in the San Francisco area, including Spotsetter and Voice AI. Spotsetter was subsequently acquired by Apple.
Other members of the founding team include Rongjian Lan, a former search infrastructure engineer at Google; Sahil Dewan, a graduate of Harvard Business School; and Nick White an electrical engineer graduate from Stanford University.
Tse is currently the CEO of Harmony.
What is Harmony coin used for and how does Harmony work?
Validators can stake ONE coins to earn rewards. Harmony developed a new iteration of the proof-of-stake consensus model called effective-proof-of-stake (EPoS). This method allows hundreds of validators to stake simultaneously. It is much more energy-efficient than the proof-of-work model.
The Harmony ONE token has a total supply of 13.5 billion ONE coins and a current circulating supply of 12.2 billion, according to CoinMarketCap.
ONE is ranked number 108 on the website and has a market cap of $275m. The Harmony cryptocurrency has gone down 60% in the past year and down 40% in the past 30 days. After hitting its all-time high in October 2021 ($0.3798), the token has fallen sharply since.
The Harmony exploit
In June 2022 Harmony announced it had been the victim of a malicious attack on the Harmony blockchain bridge in which hackers stole close to $100m in cryptocurrency.
In a statement, Harmony said: “Multiple transactions occurred that compromised the bridge with 11 transactions that extracted tokens stored in the bridge. The estimated value at the time of the attack was approximately $100m.”
Harmony has offered a $1m bounty in exchange for the return of the funds.
How many Harmony coins are there?
There is a total supply of 12.2 billion ONE coins and a current circulating supply of 13.5 billion ONE coins, according to CoinMarketCap.
Who created Harmony?
Is Harmony secure?
Harmony is secured by an effective proof-of-stake consensus mechanism. The sharding process is secured by randomly reassigning validators with different shards. At least 250 nodes are active on each shard, which Harmony claims will protect the shards from being corrupted.