What is Harmony (ONE)? Your ultimate guide
Harmony is attempting to solve the scalability trilemma, but will it succeed?
In order 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 dilemma through 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 the unique feature that makes processing transactions slow and inefficient. This is because all transactions have to be processed and validated by nodes on the ecosystem in order for the new block to be mined.
On traditional blockchain, all the nodes are operating on the same main blockchain. 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 a 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. However, its ONE coin has recently soared in value. 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 hope 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?
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.
Thr Harmony ONE token has a maximum supply of 13.16 billion ONE coins and a current circulating supply of 11.58 billion according to CoinGecko.
ONE is ranked number 47 on Coin Gecko website, and has a market cap of $3.7bn. The Harmony cryptocurrency has gone up 6,500% in the past year and 60% in the past 30 days. In the first week of January 2022, the price of Harmony ONE stood at $0.320033.
There is a maximum supply of 13.16 billion ONE coins and a current circulating supply of 11.58 billion ONE coins, according to CoinGecko.
Harmony is secured by an effective-proof-of-stake consensus mechanism. The sharding process is secured through randomly reassigning validators different shards randomly. At least 250 nodes are active on each shard, allegedly protecting the shards from being corrupted.