In this article we will introduce you to the Hedera Hashgraph system and the HBAR coin. We can certainly say that this is a potential project that will bring together a group of leaders, including big names from the global economy. Hedera Hashraph is therefore an extremely interesting project, which we would like to tell you more about in this article.
- 1 What is Hedera Hashgraph?
- 2 Developmenct team
- 3 Partners
- 4 How does Hedera Hashgraph work?
- 5 The Gossip Protocol and Aynchrone Byzantine Fault Tolerance (aBFT)
- 6 DAG (Directed Acyclic Graph)
- 7 The coin of Hedera Hashgraph (HBAR)
- 8 ICO
- 9 Where can I buy Hedera Hashgraph?
- 10 How can I store HBAR?
- 11 What can you use HBAR for?
- 12 Benefits of Hedera Hashgraph
- 13 Disadvantages of Hedera Hashgraph
- 14 Hedera Hashgraph (HBAR) Price
- 15 Conclusion
What is Hedera Hashgraph?
Born with the sole purpose of generating money, Hedere Hashgraph does not correspond in any way to the ideals pursued by “classic” cryptocurrencies. And to top it all off, the project was launched by two people with key ties to the US military, which never bodes well when it comes to computer technology.
Hedera Hashgraph is an open source blockchain that supports decentralized applications (daPPS) running on the internet. Data on Hedera will be stored on the DAG ( Directed Acyclic Graph ), rather than on the blockchain as is the case with most popular Blockchain platforms today. Think, for example, of Bitcoin and Ethereum .
Using a unique technology, the team behind this project is creating a trusted ecosystem that allows individuals and companies to communicate and work with each other without having to meet first. This ensures that deals can be concluded cheaply, quickly and without the intervention of a third party.
A special feature of the platform is to achieve the same results as the current major blockchains (Bitcoin, Ethereum, etc. ), but faster, fairer, more energy efficient and more secure.
The goal of the Hashgraph team is simple: to create a new kind of blockchain, which is faster, more secure and reliable than Bitcoin. The idea is actually based on the amalgamation of existing technologies, including DAG. As well as a new form of consensus algorithm , which we’ll tell you more about later in this article.
The Hedera project is the baby of Dr. Leemon Baird (co-founder, CTO and CSO). He holds a doctorate in computer science, holds several patents and is the author of numerous publications in academic journals.
In addition to Leemon Baird, there is Mance Harman (co-founder and CEO). Baird and Harman worked together at Trio Security and then at BlueWave Security. So they already have experience of working with each other, which can be very beneficial for cooperation in the future.
The other members of the development team are also highly trained and knowledgeable in the industry. The experience of the team members is very important, and that comes into its own at Hedera Hashgraph.
A very special aspect of the Hedera project is that there is a board of 39 leading organizations and companies in the financial world. So far, this council has attracted the participation of several giants, including Boeing, Google, Deutsche Telekom, IBM, Swisscom Blockchain and Tata Communications.
As Hedera stated, the board members are committed to adapting changes to the software while ensuring the stability and continued decentralization of the platform.
The design of the project also ensures that each member of the council has one vote. This is to prevent power from being concentrated too much into one company. In addition, the members of the board of directors will be replaced after a few years. Each member may serve a maximum of two terms of three consecutive years.
How does Hedera Hashgraph work?
To achieve its stated goals, Hedera Hashgraph uses an asynchronous Byzantine Fault Tolerance (aBFT) consensus algorithm in a Proof of Stake system. The infrastructure already enables around 10,000 transactions per second for simple HBAR token transfers and 10 TPS for other types of transactions. The introduction of sharding should enable the network to reach its theoretical maximum capacity of 500,000 transactions per second.
The HBAR is the system’s own token. Thus, it acts as a cryptocurrency, but also as the currency used to pay for all the costs associated with using the platform (sending a transaction, storing files, using a smart contract, etc. .). The owners of the nodes are compensated through the transaction costs, which are very low for the users (about 0.0001 USD for a normal transaction). That is a lot lower than you would pay, for example, with Bitcoin or Ethereum.
The Gossip Protocol and Aynchrone Byzantine Fault Tolerance (aBFT)
As you know, Bitcoin uses Proof of Work to establish a consensus mechanism. However, this algorithm suffers from a number of problems, such as: it consumes a lot of energy (electricity), it requires many miners, transactions are processed slowly to achieve a high level of security and it consumes a lot of bandwidth. This ensures that the costs of using the blockchain are very high. Even if you only want to make a very small transaction (as is the case with Ethereum).
The network of Hedera Hashgraph, on the other hand, will not experience these problems thanks to the use of smart technologies. One of those technologies is the consensus algorithm that the blockchain uses.
Because as far as the consensus algorithm is concerned, Hedera Hashgraph uses the Gossip protocol and asynchronous byzantine fault tolerance (aBFT). The use of the Gossip protocol enables the nodes in the network to exchange data quickly and efficiently. In addition, they will automatically build a hash data structure.
As with aBFT, only two-thirds of the nodes in the network are needed to confirm a transaction. This is a mechanism that the project founders, including Dr. Leemon Baird and Mance Harman, as very safe. They themselves are sure that this algorithm is much more secure than the algorithm used with Bitcoin or Ethereum. And that’s very important to the founders, because they claim to be better than their biggest competitors.
At least in terms of transaction speed, this works. The processing of transactions on the platform also only takes 3 to 5 seconds; and the initial throughput is limited to 10,000 TPS. However, we have to mention that as the network gets bigger and older, the number of TPS’s will also increase.
DAG (Directed Acyclic Graph)
As mentioned at the outset, the data on Hedera Hashgraph will be recorded on a DAG rather than on the blockchain. In DAGs, network participants act as nodes. These nodes will verify each other’s transactions. This is of course very similar to how a blockchain works. However, there is a big difference.
As a result of using a DAG, the transaction speed will be faster, as it is not necessary to fill an entire block to process transactions. The transactions are processed per transaction. As a result, the transaction speed is much lower than with cryptocurrencies that use a blockchain.
The coin of Hedera Hashgraph (HBAR)
HBAR is a utility token and is also the original token of the Hedera project. This currency is mainly used to maintain the network.
In total, there are more than 50 billion coins of Hedere Hashgraph. In April 2021, just under 8 billion of them have been used, which means only 16% are in use. In the future, there will therefore be many more coins on the market.
Funding came through an ICO held between August 14 and 16, 2018, which raised $100 million. The price of the tokens at the time of sale was 12 cents, bringing Hashgraph’s total capitalization to $6 billion.
Where can I buy Hedera Hashgraph?
Hedera Hashgraph is another fairly young cryptocurrency launched in 2020 (mainnet launched in September 2019). However, it has already received acclaim from major reputable exchanges. For example, you can buy HBAR on Binance and Bitvavo , for example . By buying HBAR on these major exchanges, you enjoy the various benefits it offers.
For example, there is always a high liquidity on these exchanges, so you can always buy or sell your coins quickly at relatively low transaction costs. In addition, it is also very safe to use Binance or Bitvavo.
Of course you can also choose to buy HBAR on a decentralized exchange (DEX) like Sushiswap or Uniswap . However, you have to go through many more steps here, which can make it a very difficult process where a lot can go wrong.
How can I store HBAR?
When you buy Hedera Hashgraph at a crypto exchange such as Binance or Bitvavo, you can simply put the coins in the wallet of the exchange. This is the easiest thing to do, although it is not the safest choice. It is in fact much safer to store HBAR in a hardware wallet . The best-known hardware wallets are from Ledger.
A cold wallet is much more secure than a software wallet, because it is not continuously connected to the internet. This allows you to protect your crypto coins much better against hackers. Check in advance whether you can indeed store HBAR on the hardware wallet that you have in your possession.
What can you use HBAR for?
Of course you want to know what you could use HBAR for. There are crypto projects that have a currency that you can only pay with. It is different for Hedere Hashgraph, because there are several user functions for the HBAR:
- Pay to use dApps
- Creating peer-to-peer and micro-payment business models
- Vote to determine the future of the network
- Pay network fees incurred when using services, such as smart contracts , file storage, or performing transactions
- Setting up and running a node
- Paying Bonuses
Benefits of Hedera Hashgraph
You have seen that Hedera Hashgraph uses many new technologies. With this, it wants to ensure that it becomes better than Bitcoin and Ethereum. But what are the actual benefits of Hedera Hashgraph? Those are the following:
- Many transactions can be processed very quickly on the Hedera Hashgraph network. This ensures that people are more likely to use Hedera Hashgraph when they want to quickly complete a transaction.
- The aBFT consensus algorithm offers high security capabilities; an effective defense against attacks without Proof of Work (a heavy and expensive algorithm) is a major advantage over other blockchains.
- There is plenty of evidence from various tests showing very high TPS figures with a low transaction time, which means that the platform is highly scalable, and can therefore still be used in the future.
- The new governance structure will help Hedera Hashgraph to be truly decentralized and stable.
- Hedera Hashgraph is a lot more energy efficient than its competitors. Sustainability is an increasingly important part, which is why it is good that Hedera Hashgraph is doing something with it.
Disadvantages of Hedera Hashgraph
Now that you know what the advantages of Hedera Hashgraph are, it is of course also important to know what the disadvantages are. Because even a new technology like this has some drawbacks.
- There are many questions about the governance model Hedera Hashgraph uses. The biggest question is whether 39 board members are really independent. It is important to know that not all members are the same size as the others, which can lead to mental imbalances.
- Many people see it as an unrealistic and centralized design.
- The originators of this idea have ties to the US military, which makes people doubt the stakeholders.
- It is patented and not open source, which to many people comes across as a centralized product.
- Because it uses a lot of new technologies, it is difficult for many people to understand how this platform works. That is why there are many investors who would rather not venture into this platform.
Hedera Hashgraph (HBAR) Price
We hope this article has provided enough information about Hedera Hashgraph so that you can decide for yourself whether it is a worthwhile investment. We would like to advise you to always do good research before you decide to invest in anything. This way you reduce the chance that you will make a loss with the investment you have made. You can do this through a fundamental or technical analysis .
Thanh Lanh Tran(1989) is Chief Editor from BitcoinUSD.com