All You Need To Know About Hedera Hashgraph

Last Updated on 2 years by cryptoevent

Hedera is said to be a decentralized public ledger that personalizes the digital world for its users in ways like never before. This technology goes beyond Blockchain for inventors to deliver applications that are fast, fair and secure.

Hedera Hashgraph was developed by Dr. Leemon Baird and Scientist Mande Harmon on July 2016. This game-changing invention was invented by the founders through the experiences and expertise they garnered after working on different projects including Swirlds, Trio Security and BlueWave Security. They also worked with the United States Air Force Academy.

Hedera runs on Hashgraph, which is an even better DLT alternative than the traditional Blockchain DLT and is more than adequate for mainstream and high scale use.

This program enables its users to interact and transact securely and efficiently online, without any third-party intermediary involvement, which could put the user’s sensitive information at risk.

What is the Difference Between Hedera Hashgraph and Other Blockchains?

For a better understanding of Hedera Hashgraph, let us examine the superiority this network has over traditional Blockchain.

Concerns have been raised about the capacity of Blockchain to handle the level of scaling necessitated by mainstream markets. It is mandated that large scale networks be capable of handling hundreds of thousands of transactions per second, but right now, prevailing Blockchain systems do not have such infrastructure in place to handle these requirements.

Hedera’s system, however, can handle up to 10,000 transactions in a second, while maintaining secure and efficient operations.

Hashgraph runs on a system that is Asynchronous Byzantine Fault Tolerant (ABTF), which makes it remarkably secure from cyber attacks like Sybil and DDoS. Hedera believes that this is an adequate security measure to be observed and that the consensus mechanism of other DLTs fails to achieve this.

Furthermore, a good number of public Blockchain systems do not have the necessary technical controls to make decisions, which could result in issues if the system was to have a glitch.

Concerns have also been raised on how public DLT systems should be regulated by well-regarded representatives from different sectors.

This is not the case with Hedera as they have a governance structure that is responsible for evaluating modifications made to the platform’s codebase, electing council managers and maintaining power equilibrium in the network’s corporation. According to Hedera, strong security and effective governance are keys to sustaining a stable system.

The HBAR and How It Functions

Hedera Hashgraph was primarily created to provide a reliable, productive and credible platform that caters to enterprise-grade applications, and not to operate as a cryptocurrency. Nevertheless, as with every other public DLT system, a native coin is necessary for the system to function. In this case, HBAR is the native coin for the Hedera platform and it fulfills two roles in the network which are:

1- Network fuel:

Developers use HBAR as means of exchange for network-related services like managing small contracts, storage of files, and exchanging cryptocurrencies. The HBAR token is also used as a tool for incentivizing and paying network nodes.

Developers can incorporate the HBAR into applications to carry out peer-to-peer payments as well as micropayments business models.

2- Network Protection:

Hedera’s proof-of-stake public system uses HBAR tokens, which are endowed to network nodes, to weigh network votes on transactions when approaching a consensus.

The weighted network voting system makes it incredibly costly and hard for ill-intentioned players to manipulate consensus.

Perks of Using HBAR Tokens

Impressive throughput:

The Hedera Hashgraph system can carry out 10,000 HBAR token transactions in just a second without compromising the security or durability of the network.

Discounted fees:

Hedera Hashgraph’s consensus is exceptionally lightweight which creates room for the cost of HBAR transactions to be low (roughly $0.0001 U.S. Dollar). Such transactional costs coupled with an excellent throughput make the HBAR micropayment a possibility.

Speedy transaction finality:

Hedera boasts of attaining finality on transactions within three to five seconds compared to Bitcoin which takes one minute or Ethereum which takes thirty to fifty seconds.

Economics of HBAR

Hedera’s treasury distributed its HBAR tokens on the 18th of September. 379 million tokens were given to investors who participated in the three-round capital raise that occurred in March up until August 2018. 1.95 million tokens were shared on the first day of launch to advisors, vendors and other related parties. The remaining 50 billion tokens will be distributed strategically by the network’s governing council over the next 15 years.

This release strategy will guarantee the security of Hedera’s proof-of-stake public network. This strategy will assist Hedera in achieving its vision of “maximum decentralization at scale”.

The HBAR listed for trading on twelve exchanges including OKEx, AlgoZ, Bering Waters, xfeatures, Galaxy Digital, Liquid, BitOda, OKCoin, Upbit, GSR, Bittrex and OSL. It can also be traded through over-the-counter desks.

HBAR Proxy Staking

Users and developers can purchase HBAR tokens from third-party outlets end companies such as exchanges and other transactional bodies that have decided to get integrated into Hedera’s ecosystem. The user can then use the HBAR token as a means of exchange for goods or services, and to pay other applicable transaction fees.

Users can also “proxy stake” the HBAR token to a network node. The proxy staking feature guarantees the maintenance of the security as well as the quality of the platform’s network operations while allotting a small percentage of the transaction fees to the proxy stakes. However, the proxy staking feature is yet to be made available.

Hedera’s Governing Council

Hedera is run by a system called the “Governing Council”. This ruling system consists of recognized bodies like IBM, Deutsche Telekom, TATA Communications, FIS, Nomura, Boeing, DLA paper, Swisscom Blockchain, Magulu, and Swirlds.

The governing council is set up in a manner that maintains a “rotating” council of about 39 enterprises specifically selected from an array of industries and geography. This rotational system ensures that there is always an equilibrium of power at any given time.

The Functionalities of the Governing Council

1- Direction of the codebase:

The members of the governing council all have equal votes when it comes to the direction of the software concerning public nodes, as well as the platform’s codebase.

2- No forking:

The consensus algorithm for Hashgraph is proprietary and has an open review code this creates a no-fork warranty for the network and its native coin. This helps to maintain the stability of development for app builders and to also guarantee long-term reliance on the network.

3- Initial network nodes:

Thousands of public nodes will join the network to promote its decentralized consensus and advancement. The governing council screens these nodes before they are integrated into the system.

4- Term limits and vote equality:

Members of the governing council are permitted to only have a three-year term at maximum with two successive terms after which they will be mandated to forfeit the post. However, this rule does not apply to Swirlds. Swirlds, as the creator of the Hashgraph algorithm, has a permanent seat with equal voting rights in the council.

Hedera preserves decentralization by distinguishing between governance and consensus. It was designed in that way to guarantee that the governing council continues to be competent at all times.

The council is also charged with the decision making responsibility on:

Management of the treasury to guarantee the safety of the network.

Provision of the legal necessities to serve the globals.

Regulation of mutability to handle data and legal compliance.

Provision of direction to the platform as well as the network’s node codebase.

Third Generation Distributed Ledger Technology

Bitcoin (first generation DLT) and Ethereum (second generation DLT) were the pioneering entities for decentralized infrastructure and programmability. They operate using a proof-of-work Blockchain which consumes a vast amount of work power and is slow to carry out transactions just so it can achieve acceptable levels of security. The intense levels of consumption of bandwidth by these networks make it expensive, which is exorbitant for simple cryptocurrency transactions.

Hedera, on the other hand, runs on a proof-of-stake public network that is backed by a Hashgraph algorithm and attains a very exceptional grade if security (ABTF) while providing incredibly fast transaction speeds and remarkably low bandwidth consumption.

Just as broadband technology was crucial in the early adoption of the Internet, there have been proclamations that the third-generation DLT is indeed the broadband moment for cryptocurrency.

Other innovations like Facebook’s Libra are signs that the third-generation era is already upon us.

Libra unlike other cryptocurrencies, is a global currency and will have a stable nature. The prospects of Libra has caused unrest in regulatory bodies around the globe and has made them take a negative stand against the progress of the technology. However, Libra does not seem to be deterred by this opposition and is still set to launch on the proposed date.

Decentralized Company Apps on Hedera

Hedera features over 500 decentralized company apps ranging from innovative startups to well established global enterprises. A few of these companies are Armada, Certara, Earth.ID, earth tile, Power transition,, ecclesia, Ads Dax, Alto, Attestiv, Binsignia, Block.Red, Carbon, Zeux, Zabo, and Otarfy.


Hedera is the future of public decentralized ledger technology thanks to the combination of outstanding throughputs and cheap fees. There’no denying that Hedera Hashgraph is a force to be reckoned with.

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