Hedera Hashgraph (HBAR) has been making waves in the cryptocurrency world for good reasons. This unique platform offers a novel approach to consensus building and transaction validation, diverging from the traditional blockchain structures of its contemporaries. Its innovative technology, robust ecosystem, and promising use cases have placed it under the spotlight.
This article deep-dives into the Hedera Hashgraph universe, unraveling its inner workings, the value proposition of the $HBAR token, and why it’s gathering so much attention.
Hedera Hashgraph ($HBAR): An overview
Hedera Hashgraph ($HBAR) is a revolutionary platform that aims to redefine the way we perceive and use cryptocurrencies. Unlike the traditional blockchain networks we are accustomed to, Hedera Hashgraph employs a different structure known as a directed acyclic graph (DAG).
Invented by Dr. Leemon Baird and Mance Harmon in 2018, Hedera Hashgraph aims to offer a more efficient and secure alternative to blockchain consensus methods. Their vision was to create a network capable of serving a wide range of real-world applications, ranging from healthcare to financial services, supply chain management, and decentralized finance (DeFi).
Also, looking to know what awaits the fate of HBAR? Check out our detailed blog to know more.
The Hedera Hashgraph technology
Hedera Hashgraph is not a blockchain in the conventional sense. Instead, it uses a directed acyclic graph (DAG) for its distributed ledger technology. Known as the Hashgraph Gossip Protocol, this DAG structure allows transactions to be verified simultaneously using a randomized structure, enhancing efficiency and capacity.
One of Hedera’s unique selling points is its ability to address the “blockchain trilemma,” a long-standing challenge in the blockchain world. This trilemma refers to the difficulty of achieving a balance between decentralization, security, and scalability.
Hedera’s Hashgraph Gossip Protocol promises to solve this issue by offering high throughput and decentralized platforms without compromising security.
Will Pepe coin survive the cryptocurrency market in 2023? Check out the odds in our detailed blog here.
HBAR: The fuel of the Hedera network
HBAR, the native cryptocurrency, plays a crucial role in Hedera’s ecosystem. It serves as a utility token for paying transaction and smart contract fees, and it also contributes to the network’s governance processes.
Further, HBAR tokens are staked to nodes in the Hedera network, thereby ensuring network security through a weighted voting system.
How Hedera Hashgraph works
Hedera’s platform comprises three main frameworks, collectively referred to as Hedera Network Services:
- Hedera Token Service (HTS): Facilitates the configuration, management, and transfer of fungible and non-fungible tokens.
- Hedera Consensus Service (HCS): Allows the network to record transactions and event data logs.
- Hedera smart contract service: Enables developers to deploy smart contracts to create decentralized applications (dApps) on Hedera.
These three components work in harmony, underpinned by Hedera’s innovative Hashgraph Gossip Protocol consensus algorithm.
The Hashgraph Gossip Protocol consensus
The Hashgraph Gossip Protocol is a consensus algorithm that enables nodes to agree on the transaction history and validity of current transactions for a balanced operation. Additionally, this protocol ensures that no single node or group of nodes can control the network or interfere with its consensus.
Hedera’s use cases
Hedera is built for an array of applications, including healthcare, supply chain management, financial services, DeFi, and payments via central bank digital currencies (CBDCs) and stablecoins.
Furthermore, it also caters to the development of decentralized identity solutions, remittances, and fraud mitigation.
Additionally, USDT’s dominance over Tron has been skyrocketing. What does it mean? Check out our article to stay updated!
The value proposition of HBAR
HBAR is more than just a cryptocurrency; it’s the fuel that powers the Hedera network. As a utility token, it facilitates network governance, application development, smart contract usage, and transaction fee payments.
High throughput
The Hedera network can achieve up to 10,000 HBAR cryptocurrency transactions per second, offering a high level of performance without compromising security or stability.
Low fees
Thanks to the lightweight nature of the Hashgraph consensus, the cost per HBAR transaction is minuscule, around $0.0001. This makes micropayments using Hedera’s $HBAR practical and affordable.
Rapid finality
HBAR transactions attain finality within three to five seconds, bringing about confidence in payment settlements and facilitating modern digital experiences within applications.
Hedera’s governance model
Hedera Hashgraph is governed by the Hedera Governing Council. This council comprises up to 39 enterprises, including Google, Dell, and IBM. Additionally, its role is to manage the software, vote on changes, ensure proper fund allocation, and safeguard the network’s legal status in various jurisdictions.
Hedera’s ecosystem
Every Hedera mainnet node contributes to consensus and stores a copy of the public ledger’s state. Node operators receive HBAR as compensation for their resources. Also, developers and end users can purchase HBAR for several utilities, including purchasing goods and services and paying application transaction fees.
HBAR’s role in Hedera’s ecosystem
HBAR serves three primary purposes:
- Network fuel: HBARs pay for network services and incentivize nodes to contribute computing resources.
- Network security: HBARs protect the network from cyberattacks through the network’s forthcoming proof-of-stake, coin-weighted consensus mechanism.
- Treasury management: A significant portion of the total HBAR supply was held in the Hedera Treasury at creation.
HBAR has come up with some strong eco-friendly updates. Take a look at how these updates will impact the price of HBAR.
Hashgraphs vs. blockchains
A more effective and secure method of transaction validation is provided by hashgraphs. Also, this technology can process thousands of transactions per second and verify more than a million signatures per second.
Hedera: A third-generation public ledger
The third generation of public ledgers is represented by Hedera. With quick transaction times and minimal bandwidth usage, the Hedera proof-of-stake public network, powered by hashgraph consensus, achieves the highest level of security possible.
Hedera’s use cases
Hedera offers a host of use cases ranging from payments to fraud mitigation, permissioned blockchain, identity, data compliance, and tokenized assets.
Hedera’s technology and its native currency, HBAR, offer a refreshing take on blockchain technology. Also, they are doing it by addressing the key challenges of scalability, security, and decentralization. While it’s still deemed underappreciated in the crypto community, its potential for real-world applications and enterprise solutions could make it a dark horse.
Is 2023 unlucky for Bitcoin? Find out the truth in our article.
The bottom line
HBAR represents a promising cryptocurrency powered by a unique technology. Additionally, these circumvent many limitations that have hindered the adoption and effectiveness of conventional blockchain-based digital assets.
Also, the patented algorithms powering Hedera Hashgraph and HBAR are relatively new. These are only beginning to scale up to handle real-world loads. Similarly, as more people start testing the technology and using it for dApps, potential weaknesses in hash graph-based open ledgers may emerge.
However, the future of this revolutionary technology seems promising. Interested parties can buy HBAR today on various cryptocurrency exchanges like Kriptomat, Bitstamp, and Okx.