Hedera is a third-generation proof-of-stake public network powered by the unique hashgraph consensus. It is a completely open-source, publically distributed ledger that supports Solidity-based, Ethereum Virtual Machine-compatible smart contracts and native tokenization. Users can use Hedera's carbon-negative network to transact and deploy applications.
Hedera is owned and governed by the Hedera Global Governing Council, which is made up of up to 39 diverse organizations. These companies include Chainlink Labs, DBS, Google, IBM, LG, Standard Bank, Ubisoft, University College London, and more. Hedera's governance framework ensures that no single entity has undue influence or control over the network or the Hedera price.
HBAR is the Hedera's native cryptocurrency. The decentralized applications running on Hedera pay for network resources with HBAR. Through its proof-of-stake consensus mechanism, HBAR can also be staked to strengthen the network. Staking contributes to the network's security and integrity, and stakers are rewarded with a small percentage of transaction fees.
What is the hashgraph consensus?
The hashgraph consensus algorithm allows network users to agree on the order in which transactions occurred. Blocks in a blockchain are intended to form a single, long chain. If two blocks are created at the same time, network nodes will eventually discard one in order to prevent the blockchain from forking into separate chains. With the hashgraph consensus, every block is incorporated into the ledger, making them more efficient.
Furthermore, blockchains fail when new blocks arrive too quickly, which is why they require consensus mechanisms, such as proof-of-work, to slow growth. With hashgraph, new transactions and blocks can be created as needed. Hashgraph also supports more powerful mathematical guarantees, such as Byzantine agreement, making this consensus faster and fairer.
The Hedera hashgraph is more cost-effective and efficient than proof-of-work alternatives because no time or energy is wasted mining blocks that will be discarded later. At the same time, since the hashgraph is only limited by bandwidth, it is extremely fast. Hedera has the potential to complete over 10,000 transactions per second with an average fee of $0.0001. Moreover, transactions are confirmed in less than five seconds, compared to 10 to 20 seconds on Ethereum and 10 to 60 minutes on Bitcoin. The energy used per transaction is also minimal at 0.00017kWh.
HBAR price and tokenomics
Following the launch of the Hedera network, a fixed, total supply of 50 billion HBAR tokens were minted. The Hedera Council governed the allocation and distribution of these coins, which were held in the Hedera Pre-Minted Treasury.
As of 2022, approximately 16 billion HBAR tokens remained in the treasury, with the remainder distributed as follows:
-Swirlds: Swirlds founded Hedera and licensed the hashgraph technology to the network. Swirlds and its investors received 3.9 billion HBAR tokens.
-Founders and early executives: Around 6.9 billion HBAR tokens were distributed to Hedera co-founders and early senior executives.
-Employees and service providers: 7 billion HBAR tokens were reserved to attract, retain, and incentivize employees, advisors, and service providers. As of 2022, this group had received 2.2 billion HBAR tokens.
-Purchase agreements: 8.6 billion HBAR tokens were allocated to purchase agreements such as Simple Agreements for Future Tokens (SAFTs).
-Ecosystem development: HBAR tokens are actively used to fund Hedera's growth. The Hedera Council has set aside 11.9 billion HBAR for ecosystem development.
About the founders
Dr Leemon Baird and Mance Harmon founded Hedera in 2018. In 2015, Baird and Harmon developed Swirlds, a software platform for developing fully distributed applications to utilize the cloud without servers. Dr. Baird developed the hashgraph consensus algorithm, which Swirlds licensed to Hedera shortly after the latter was founded.
After co-founding Hedera, Baird and Harmon served as CEO and Chief Scientist, respectively. However, in April 2022, the pair left these positions to become co-CEOs of Swirlds Labs, a newly established entity. The two are still Swirlds' representatives on the Hedera Governing Council.
Hedera highlights
1. Constellation ShortList™ for Blockchain Services
In Q3 2022, the Hedera network was added to the Constellation ShortListTM for Blockchain Services, demonstrating the protocol's popularity among industry experts.
2. Partnership with Arkhia
In September 2022, Hedera also announced a partnership with Arkhia, an Infrastructure-as-a-Service (IaaS) provider, to provide an enterprise-grade node service to Hedera, reducing friction and cognitive load on developers and contributing to Hedera's overall growth and adoption.
