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Concepts

Hash Chains​

A hash chain is a cryptographic structure where each element is generated by applying a hash function iteratively. It ensures tamper-proof verification since any modification would break the chain integrity.

Properties​

  • Unidirectional: Each token can be verified by hashing, but cannot be reversed.
  • Tamper-resistant: Altering any token invalidates the entire chain.
  • Efficient verification: Only the final token needs on-chain validation.

Escrow Smart Contracts​

The escrow smart contract acts as a secure intermediary, locking funds and releasing them programmatically based on protocol rules. It ensures trustless interactions between the user and merchant.

Key Features​

  • Automated fund release based on token validation.
  • Prevents fraud by only allowing proportional payments.
  • Includes time-locks to refund users if merchants do not claim funds.

Off-Chain Transactions​

Hashchain Protocol reduces blockchain congestion by moving most transactions off-chain, ensuring gasless payments while keeping cryptographic guarantees.

Advantages​

  • Scalability: Only the first and last transaction interact with the blockchain.
  • Low latency: Instant token exchange without on-chain delays.
  • Cost efficiency: Eliminates per-transaction gas fees.

Trust Anchor​

The trust anchor is the final hash in the chain, submitted to the smart contract when creating a channel. Every token in the hash chain derives from this anchor, ensuring verifiable linkage. It is used to verify the authenticity of submitted tokens.

These foundational concepts ensure that the Hashchain Protocol delivers secure, scalable, and trustless off-chain transactions with minimal on-chain overhead.