What is Hedera (HBAR)? | iTrustCapital

Quick Answer:

Hedera is an open-source, proof-of-stake public network that uses hashgraph consensus technology instead of blockchain to achieve faster, more secure, and more energy-efficient transactions. HBAR is the native cryptocurrency of the Hedera network. If you’re interested in buying and selling Hedera (HBAR), you can do so at iTrustCapital.

A Unique Network

You might be curious about what exactly Hedera is and why it and its native asset, HBAR, have caught the attention of many.

In this article we will give an overview of Hedera, and HBAR, and highlight the potential advantages it offers.

What is Hedera?

Hedera is a specific type of open source, proof of stake (PoS), public network that uses the asynchronous Byzantine Fault tolerance (aBFT) hashgraph consensus algorithm.

The network architecture is quite different from the Bitcoin and Ethereum blockchain.

Rather than using blockchain technology, Hedera employs hashgraph technology, which claims to be more secure, fair, and fast. While blockchains are generally thought of as expanding chains of blocks containing transactional information, hashgraphs are characterized by their acyclic graphs with no directed cycles.

Hedera vs. Blockchain: Key Differences

Feature	Hedera (Hashgraph)	Traditional Blockchain
Speed	~10,000+ TPS	7-30 TPS (Bitcoin/Ethereum)
Transaction Cost	~$0.0001 per transaction	Variable, often higher
Finality	3-5 seconds	Minutes to hours
Energy Efficiency	Highly efficient (PoS)	Varies (PoW is energy-intensive)
Consensus	aBFT Hashgraph	Various (PoW, PoS)
Fairness	Mathematically proven fair ordering	Block producer determines order

How does its consensus protocol work?

Hedera's Hashgraph consensus works through a "gossip protocol." In this system, members randomly share information with each other, ensuring that new information spreads rapidly throughout the network.

This sharing of information is called a gossip sync, and each sync is marked with an "event." An event is a record that includes details like a timestamp and two identifying codes, known as parent hashes, which help trace the sequence of information exchanges.

For example, if two members, Jack and John, engage in a gossip sync, both create events containing codes related to the last information exchange they were part of. This process continues until all members have received the new information.

The protocol enables quick and efficient information dissemination, keeping all participants synchronized and maintaining the network's integrity.

What is HBAR?

HBAR is the native cryptocurrency of the Hedera network, with a fixed maximum supply of 50 billion coins, used to pay transaction fees and power decentralized applications.

It serves as the fuel for the network, allowing users to conduct transactions and run applications. To engage in these activities, users must purchase HBAR. The maximum supply of HBAR is fixed at 50 billion coins.

HBAR Key Facts

Token Ticker: HBAR
Maximum Supply: 50 billion coins
Consensus Mechanism: Hashgraph (aBFT)
Network Type: Proof of Stake (PoS)
Founded: 2018

Hedera Governance

Hedera is governed by the Hedera Governing Council, a decentralized body of up to 39 term-limited organizations from diverse industries and geographies. Notable council members include major enterprises such as Google, IBM, Boeing, Deutsche Telekom, LG Electronics, and others. This governance structure provides stability, prevents centralization of power, and ensures the network evolves with input from leading global organizations.

Use Cases and Real-World Applications

Hedera's high throughput, low costs, and enterprise-grade security make it suitable for a wide range of applications:

Supply Chain Tracking: Companies use Hedera to track products through supply chains, ensuring authenticity and transparency.
NFT Marketplaces: Hedera supports the creation and trading of NFTs with low fees and fast transaction times.
Payment Systems: The network enables fast, low-cost micropayments and cross-border transactions.
Decentralized Finance (DeFi): Developers build lending, borrowing, and trading applications on Hedera.
Data Integrity: Organizations use Hedera's consensus service to timestamp and verify data for compliance and auditing purposes.

Why do people like Hedera Hashgraph (HBAR)?

People have been showing interest in this asset because of its unique consensus mechanism. Hedera Hashgraph stands out for its ability to scale smoothly and its use of an eco-friendly proof of stake (PoS) approach. Also, the transactions are faster and cheaper compared to other blockchain transactions.

If you're looking to buy and sell HBAR you can do it with the benefits of a tax-advantaged crypto IRA* at iTrustCapital! You can also open up a Premium Custody Account for everyday investing to buy and sell HBAR.

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Frequently Asked Questions

Is Hedera a blockchain?

No, Hedera is not a blockchain. It uses hashgraph technology, which is a type of distributed ledger technology (DLT) that differs from traditional blockchain. While blockchains organize data into sequential blocks, hashgraph uses a directed acyclic graph (DAG) structure that enables faster consensus and higher throughput.

Who founded Hedera?

Hedera was founded in 2018 by Dr. Leemon Baird, the inventor of the hashgraph consensus algorithm, and Mance Harmon. Together they created the Hedera network to bring enterprise-grade distributed ledger technology to the market.

What makes HBAR different from other cryptocurrencies?

HBAR differs from other cryptocurrencies primarily due to its underlying hashgraph technology, which offers faster transaction speeds (10,000 TPS), lower costs ($0.0001 per transaction), near-instant finality (3-5 seconds), and mathematically proven fair transaction ordering. Additionally, Hedera's governance by a council of major global enterprises provides unique stability and credibility.

How fast are transactions on Hedera?

Hedera can process approximately 10,000 transactions per second with finality achieved in 3-5 seconds. This makes it significantly faster than many traditional blockchain networks.

What is the Hedera Governing Council?

The Hedera Governing Council is a decentralized governing body consisting of up to 39 term-limited organizations from various industries and regions worldwide. Members include major enterprises like Google, IBM, Boeing, and LG Electronics. The council oversees network governance, ensuring stability and preventing any single entity from controlling the network.

Can I stake HBAR?

Yes, HBAR can be staked to help secure the network. Staking allows HBAR holders to participate in the proof-of-stake consensus mechanism and potentially earn rewards for contributing to network security.

What are the main use cases for Hedera?

Hedera is used for various applications including supply chain tracking, NFT marketplaces, payment systems, decentralized finance (DeFi), and data integrity verification. Its high speed, low costs, and enterprise-grade security make it suitable for both consumer and enterprise applications.

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