Hathor is a digital platform for financial transactions and contracts with a unique combination of high scalability and high decentralization. It creates the perfect environment for multiple use cases where scale, efficiency, long-term security, and censorship-resistance through network distribution combined are needed or can drastically cut current costs and bureaucracy. In this sense, we naturally share a few features commonly attributed to blockchain technologies in general, however, thanks to a breakthrough on how to make a consensus network process a much larger volume of information we bring it to new another level to new players in major fields.
Hathor is a novel, scalable, and decentralized architecture for a distributed ledger network. Blockchain and DAG are similar but quite unique forms to establish and maintain a distributed ledger, in the case of Hathor this ledger is sort of a permanent accounting book of the past and present transactions being received by the network. In a blockchain, new transactions are put together in a block, verified in groups and linked to the chronological chain of previously verified blocks, whereas a DAG is comprised of individual transactions confirmed by two or more transactions sent after it. In Hathor, both approaches are combined to jointly establish weights to any transaction sent to the network and indicate its trustworthiness, with a substantially higher throughput. We solve the problems of scalability and decentralization maintenance among distributed ledger networks by including a chain of mined blocks inside a DAG of transactions. The blockchain ensures security when the number of transactions per second is small, whereas the DAG prevails when the number increases significantly.
Smart contracts as they can be constructed today redefine in such a way the fulfillment of the clauses between the parties, in automating it, that questions concerning the physical infrastructure, specialized support, legal support, and multiple informal meetings or in legal forums are giving way to instant negotiations, in the form of self-executing agreements.
When you encode a deal into a smart contract you get something obvious clear: “if this, then that.” It becomes much easier for people to understand what the contract does, as opposed to the insane legalism generally involved. The disintermediation provided by the implementation of smart contracts occurs as a consequence of automation of processes in which traditional contracts are dependent on guarantors, as a reliable third-party is able to ensure compliance with clauses agreed between two or more parties that could even be not known. In the same direction, when implemented over Hathor, both the usual insurance and new financial products (derivatives based on cryptocurrencies) for example could be theoretically triggered on their own once a certain condition is satisfied. Although still new, more and more structures in this sense can be translated into computational code as smart contracts and their uses are yet to be discovered and built.
Of course, with automation comes the drawback that if you gain in clarity, you will lose in flexibility, especially when you have to make it everything perfectly correct in the very first time it is sent to the network. Otherwise, an unexpected transfer of funds could simply be understood as the activation of a new feature in your contract, as it happened in other networks. This is precisely why Hathor is building a new and safer approach to deploying smart contracts in our network to avoid the paranoia-level of audit needed nowadays. Simplicity, security, and scalability combined are going to welcome a wide range of players to build their financial solutions on top of Hathor, from large traditional institutions to innovative newcomers.
The procedure consists of establishing that any given set of units become distinct and identifiable in front of the other units whose distribution and ownership are recorded in the Hathor network, including both the native Hathor tokens (HTRs) and other assets created/recorded there. These units then become assets on their own and can be used independently, even in parts, of the price of 1 HTR, in order to serve the most varied purposes: financial participation in a company ("stock"), mileage or loyalty points of a specific store or network, decentralized voting system (in which each unit of the new asset represents a voting right in a certain matter), ownership of digital goods such as website domains, among others.
From the characteristics that can be embedded in these assets - such as restrictions on access or issuance of assets and the ability to pre-program the behavior of the it based on the passage of time, on the payment of fees or by sending specific information - their use for a wide range of smart contracting applications going to be possible from the moment we launch our public network. In addition, especially when combined with more advanced variables that allow the automation of the behavior of digital assets based on constraints pre-programmed and made immutable once registered in Hathor Network, the range of new services that can be offered get even larger, including automatic payments, loans, digital concession of inheritance funds tied to multiple assets, dividend payment, exchange between several assets or digital currencies, and maintenance of futures and derivatives markets, as these tools could be built by formal institutions responsible for them using our public network.
Hathor can create and manage identities for as many people needed in a much lower cost and more secure way through the use of its embedded digital signature technologies, which gives any user a wallet address (similar to an account number) and a private key (similar to a password). Underserved populations, like the unbanked, could have access to financial services like never before. The advantages of using Hathor for such cases are intrinsically related to the elements that make up our network. It promotes cost reduction through scalability and decentralization, increasing at the same time the reliability and efficiency of payment networks built on top of it.
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