What is Hashcast and Why is it Significant?

In Blog, Community by TXH

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OMG Network's latest major development is Hashcast, a dApp that allows plasma users to communicate with each other through on-chain messages.

Messages sent via Hashcast can be cleartext strings – so like a tweet – or file transfers. Perhaps most interesting right now, however, is that they can be custom transaction bodies.

Why is that interesting? Custom transaction bodies enable the execution of atomic swaps. Atomic swaps allow two parties to trade coins on a wallet-to-wallet basis without having to trust a centralized platform, the network they transact on, or even each other. Users instead rely on a cryptographically-secured 'shared secret' that permits the swap to happen.

It sounds complicated (because it is!) but, from a UX perspective, these swaps can be as cheap and as simple as just initiating a transaction – and the OMG Network natively supports atomic swaps!

The biggest hurdle for atomic swaps has historically been the lack of a suitable place to synchronize these transactions – as these swaps won't execute unless the 'secrets' match – and that's quite hard to do securely without direct communication. To be a feasible exchange solution, you need an on-chain platform that acts as a store of broadcasted – but currently unmatched – transaction data' secrets,' i.e. Hashcast.

Before we move on, let's take this one step further with a hypothetical. Think of an order book full of limit orders. Now imagine that all those orders are encrypted, so no external party has any unfair information advantage on the market. Now imagine that any single entity or majority group doesn't control that platform, so no internal party has any unfair information advantage either. That's a marketplace that's decentralized, fair, and cannot be 'front-run' or otherwise manipulated. Sounds good, right?

Childchain v1

The 'block trigger logic' is simply the plasma chain detecting whether there's a transaction in a plasma block that needs to be submitted to the main chain for security purposes. This main chain block submission can be costly if inefficient, so it makes sense to group as many plasma transactions into a plasma block as possible while still guaranteeing users a time frame for their transaction to complete in. These components – i.e. the decentralized asset security provided by the main chain and the extremely high throughput ceiling – are two of the OMG Network's biggest advantages. It has the added bonus of potentially reducing pressure on the main chain even further.

On a similar note, the addition of bulk transactions is another step towards maximizing throughput and minimizing cost. Win-win.

Childchain v2

The upgrade builds upon v1, Childchain v2 has several vital improvements for usability, practicality, and reliability of the platform. Some are more obvious than others – a less obvious example being the increase of the output limit to 5, which should make atomic swaps more practical – but it's exciting to think of what may be coming next!

Fast Exits

Although the OMG Network has provable decentralized asset security, it does still have a problem that is shared amongst other L2 solutions – the period of time required before users can move their assets back on to the main chain. The 'why' behind this won't be explained here (two words: 'fraud proofs') – and in a perfect, fully OMG-connected world, it wouldn't necessarily be needed – but it is currently a big hurdle for UX. OMG Labs is testing a prototype called Quasar that solves this issue. There will be an update on this design in the next engineering blog, later this month.

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