Thanks for posting this ; I didnt know about this.
(That means we will probably see a huge push of code from Erlay into Dash into Biblepay in a few months).
Anyway, what this means is the current version of Bitcoin uses a standard serial relay for each new TXID to all other connected nodes; for example:
New TXID is spent from your wallet
You have 100 connections because you are an external facing node
You loop through all 100 and broadcast it blindly (you don't care if they have it or not)
This is how it works now, and is done because it would theoretically take more work to query manifests from everyone for TXIDs rather than broadcast them.
However, I've seen the summary of Hedera Hashgraph and I believe this protocol is very similar to Erlay (in a way its similar to rsync).
Basically each node in their gossip protocol regularly dumps a manifest (a hashgraph) of inventory and this allows some nodes to "hide" data by default.
The challenge in the HH protocol is how do you make a manifest with less data than receiving all of the data to begin with (similar to a hash itself is a reducing function, you can never recover the original data once its reduced). I think their answer is some type of breaks table and hash per break (or some scheme like that).
It will be interesting to see this because this has other implications in many areas; it also gives bitcoin one of the coveted features that HH was hoping to keep secret (as their codebase is private).
Thats great for us in the long run as the blockchain will save more bandwidth.