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Harmony (ONE) Blockchain: A Solution for Scalability Problems

  • Harmony blockchain bridging scalability and decentralization with security to address the challenges of traditional blockchains. 
  • The Harmony project will attract the attention of developers and crypto investors.

Blockchain technology has long since established its importance in the financial world. However, the majority of the projects have been unsuccessful in their attempts to achieve high throughput without compromising security or decentralization. Harmony blockchain is an innovative platform that aims to achieve an optimal balance between decentralization, scalability, and security; fostering a radically fair economy. 

Detailed Guide of Harmony (ONE)

Harmony is a Layer-1 blockchain founded by Stephen Tse in 2018 and launched via Binance Launchpad’s Initial Exchange Offering (IEO) in 2019. Harmony bridges scalability and decentralization with security using sharding and an effective Proof-of-Stake (EPoS) consensus algorithm, resolving the persistent issue of blockchain trilemma. 

Harmony boasts a high throughput of 2,000 transactions per second (TPS) with a latency (transaction processing lag) of merely 2 seconds. It is indicative of how significantly faster the Harmony network is compared to traditional blockchains, for example, Ethereum (20 TPS with a latency of 10-12 minutes). Moreover, the gas fees required for these transactions on Harmony are 1,000 times lower than Ethereum. 

This decentralized platform offers tools and functionalities for the developers to create, host, manage, and use decentralized apps (dApps) with apt scalability and interoperability.  Moreover, as the interest of investors in Harmony is increasing steadily, the company can find applications in a multitude of sectors, with an emphasis on data sharing, decentralized marketplaces, ad exchanges, credit rating systems, gaming, and supply chain monitoring. 

Harmony’s native currency is token ONE. The token is used for paying transaction fees, storage fees, gas fees, staking, and earning rewards, along with on-chain governance. Currently, its price is at $0.23, with a market of roughly $4.8 billion. Harmony’s ONE token can be purchased on various exchanges (e.g., Binance).

How Does Harmony (ONE) Work?

Harmony blockchain achieves scalability and an increased speed of transactions via ‘sharding.’ Harmony sharding is performed by dividing the blockchain network into four sections or ‘shards’ that run in a parallel fashion but are validated by separate groups of stakeholders. This division of workload reduces latency and makes the blockchain network more efficient. 

The stakeholders stake their ONE tokens and are assigned randomly to one of the four shards containing 250 spots for the validators. These validators maintain the full copy of transactions on the shard as opposed to the entire blockchain system. After a period known as ‘Epoch,’ these validators are assigned to a different shard to discourage centralization.  The sharding process works hand-in-hand with an EPoS consensus system to enable fast and lightning-fast transactions preventing network congestion. EPoS works differently from the other PoS systems in giving the largest validators fewer rewards to disincentivize a single validator from staking too many ONE tokens. Moreover, it uses slashing for punishing validators acting maliciously and thereby, maintaining sufficient decentralization. 

Why is Harmony Gaining Immense Attention?

  • Maintaining Decentralization and Security

The Harmony network utilizes sharding, which divides transaction validators (nodes) into groups. It allows the validators to approve the transactions at a higher speed and faster creation of new blocks on the blockchain.  Moreover, every node on the network runs on its computers and communicates with each other via peer-to-peer (P2P) technology instead of communicating through a central server. In this way, Harmony can scale without compromising either security or decentralization. 

  • Energy Efficiency

Blockchain and Ethereum blockchains employ a Proof-of-Work (PoW) mechanism that requires high computing power to validate transactions. In contrast, Harmony uses the EPoS consensus algorithm that only requires users to stake a certain amount of native crypto to qualify as a node. Since there is no need for massive computing power, Harmony is highly energy-efficient.

  • Cross-Chain Operations

Harmony has introduced a cross-chain feature named ‘Horizon’ to allow assets to be exchanged between Harmony and its underlying blockchain, Ethereum.

  • Huge Potential for NFTs

Harmony blockchain offers its users an ecosystem that can be exploited for the creation, transfer, trade, and management of non-fungible tokens (NFTs), which are digital assets (e.g., music videos, games, 3D models, art) having the ownership data coded into them. Also, using the cross-chain feature of the blockchain, it is plausible to transfer NFTs from one network to another.

Conclusion 

Despite being a newcomer to the crypto space, Harmony is setting itself up for success owing to its higher transaction speeds, low transaction costs, interoperability, and ability to serve as a valuable foundation for dApps. As the network achieves its goal of merging scalability with security and decentralization, the future where Harmony becomes mainstream is not very far away. 

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