Hedera

Hedera is an enterprise-grade public network designed for the decentralized economy, enabling individuals and businesses to build robust decentralized applications (DApps). It aims to provide a fairer and more efficient system by addressing limitations found in older blockchain platforms, such as instability and slow performance.

The project was funded via an initial coin offering (ICO) in August 2018, with mainnet open access launching just over a year later in September 2019. During the ICO, investors could buy the native utility token, HBAR, at the lowest available price.

HBAR serves two primary functions on the network. First, it acts as the fuel for Hedera services, including smart contracts, file storage, and standard transactions. Second, it helps secure the network, as users can stake their tokens to support platform integrity.

Hedera Hashgraph positions itself as an alternative to traditional blockchain technology, targeting improvements in speed, efficiency, and security. While older blockchains often use proof-of-work (PoW) and newer ones use proof-of-stake (PoS), Hedera utilizes a unique structure built from scratch. It operates on a PoS model intended to enhance transaction verification efficiency, ensure high security, and protect against hacker attacks. The ecosystem relies on the hashgraph consensus algorithm and a global enterprise governing body.

As a distributed ledger technology (DLT), Hedera differs from other blockchains by using the hashgraph consensus algorithm. This approach aims to process transactions faster, remove delays, and stabilize the transactions per second (TPS) rate. Hashgraph is described as an upgrade in terms of cost, scalability, and speed.

Core network services include:

• Consensus Service (HCS): Clients send messages to agree on consensus timestamping and order. State data is stored offline, allowing users to set privacy and access controls.
• Hedera Token Service (HTS): This enables customers to create and manage tokens, supporting built-in tokenization.

The hashgraph design focuses on increasing transaction speed and handling high-volume operations like micropayments, data integrity, and tokenization. Similar to the Ethereum Virtual Machine (EVM), Hedera supports a virtual machine for writing smart contracts in Solidity. It also includes built-in KYC and AML checks.

Technically, Hedera is a hashgraph rather than a blockchain. In this system, users agree on the transaction order. Unlike blockchains, all transaction branches are merged; no block equivalents are discarded, and each is used to reach consensus.

A key feature is the Gossip-about-Gossip protocol. According to Dr. Leemon Baird, the inventor of Hedera, nodes randomly share data about themselves with other nodes via hashgraph using the Gossip protocol. This allows all nodes in a cluster to quickly become familiar with one another, forming a data structure composed of transaction payloads, timestamps, digital signatures, and hashes to previous structures.

HBAR powers applications on the network and is used to pay for network services, transaction fees, in-app payments, and micropayments. Developers use HBAR to cover fees for smart contracts, file storage, and currency exchange. The token also incentivizes and pays network nodes.

Hedera Hashgraph features a distinct decentralized governance system. The Governing Council makes all critical decisions regarding software updates, pricing policy, and wealth management.

Hedera Hashgraph was established by two individuals: Dr. Leemon Baird and Mance Harmon.

Dr. Leemon Baird, who serves as Hedera’s chief scientist, is recognized for inventing the hashgraph distributed consensus algorithm. Before launching Hedera Hashgraph, he spent over ten years in various computer science and security positions, including a role as a senior research scientist at the Academy Center by Cyberspace Research. He also acts as the co-founder and CTO of Swirlds Inc., a platform designed for developing DApps.

Mance Harmon serves as the CEO of Hedera and brings extensive experience as a technology executive and entrepreneur. He has approximately twenty years of experience in executive roles at major companies, frequently within the IT security sector. Similar to Dr. Baird, Harmon is also a co-founder of Swirlds Inc., where he holds the title of CEO.

Beyond the two founders, the Hedera leadership team includes more than a dozen other professionals, many of whom possess notable career histories.

Hedera Hashgraph distinguishes itself from the majority of cryptocurrency platforms by avoiding traditional blockchain architecture. Instead, it utilizes a distinct form of distributed ledger technology called a Hashgraph.

This approach aims to outperform blockchain-based competitors in terms of scalability, cost, and speed. According to the platform, transactions usually achieve finality in less than five seconds and carry an average fee of only $0.0001 USD. Hedera Hashgraph states it is capable of processing over 10,000 transactions per second (TPS), whereas most well-known proof-of-work (PoW) blockchains manage approximately 5-20 TPS.

The network provides several core services:

• A token service enabling users to mint and configure both non-fungible tokens (NFTs) and fungible tokens on Hedera using minimal code.
• A consensus service that provides a secure, verifiable event log to establish trust for various applications or networks.
• Smart contract utilities that allow developers to create efficient and robust decentralized applications.
• Decentralized file storage featuring time-based file expiry, controlled mutability, and proof-of-deletion capabilities.

The HBAR token has a capped total supply of 50 billion. As of January 2021, nearly seven billion units were in circulation, representing approximately 14% of the total. Hedera releases periodic updates regarding future token unlocks.

Data from Hedera indicates that each of the two founders received an allocation of two billion HBAR, amounting to 4% of the total supply per person, with these coins vesting over six years. Senior leaders who joined before 2018 hold grants ranging from 250 million to 300 million coins, which vest through December 2021. The Economics Whitepaper, issued in June 2020, projects that roughly 17.03 billion HBAR (34% of the total) will be circulating by 2025.

The Hedera Hashgraph network relies on a unique security model called Hashgraph consensus. This system is overseen by a rotating governing council made up of as many as 39 diverse organizations from up to 11 distinct industries. These members are responsible for guiding the codebase, casting votes on platform choices, and running the initial nodes on the public network.

Additionally, Hedera employs a specific type of proof-of-stake (PoS) that enables HBAR holders to stake their assets to support network protection. Currently, node operations are handled exclusively by Hedera or council members, though the team plans to transition to a permissionless framework in the future.

This architecture provides "asynchronous" Byzantine fault tolerance (ABFT), ensuring that transaction order and timing remain guaranteed even if some data experiences delays or loss.

Hedera (HBAR) is a widely traded digital asset listed on major exchanges such as Binance, Bittrex, and Huobi Global.

Common trading pairs for HBAR include HBAR/USDT, HBAR/BTC, and HBAR/ETH. Additionally, fiat currency options are available, specifically HBAR/USD, HBAR/KRW, and HBAR/INR.