Updated on February 27, 2023 07:12 PM
Hedera(HBAR) Hashgraph is a consensus algorithm that's gaining popularity in the world of decentralized technology. It's known for its lightning-fast transaction speeds, low transaction fees, and high security.
In a world where innovation reigns supreme, new technologies are emerging every day, changing the way we think about the future.
One such technology that's been making waves lately is Hedera. But what is Hedera(HBAR), you may ask? Let me take you on a journey to explore the wonders of this cutting-edge platform.
Hedera is more than just a platform; it's a revolution. A revolution in the way we store and manage data, a revolution in the way we conduct transactions, and a revolution in the way we interact with each other online.
In this article, we’ll cover What is Hedera(HBAR), How it works and many prospects of it. Let’s get started.
Hedera is a decentralized public ledger that allows for secure and fast transactions without the need for intermediaries. But what sets Hedera apart from other blockchain platforms is its cutting-edge consensus algorithm, hashgraph.
Unlike other consensus algorithms, hashgraph allows for lightning-fast transaction speeds, low transaction fees, and high security. Hedera can process thousands of transactions per second, making it one of the fastest and most efficient platforms on the market.
But what's even more impressive is that Hedera achieves this level of speed and efficiency without sacrificing security. With hashgraph, Hedera can achieve Byzantine fault tolerance, which means it's resistant to malicious attacks and can operate with a high degree of certainty.
But that's not all. Hedera is also designed to be incredibly user-friendly and developer-friendly. With its robust suite of tools and resources, developers can easily build powerful applications on the platform, from identity verification to micropayments and beyond. And with the Hedera Token Service, developers can create and manage their own tokens on the platform, allowing for endless possibilities for innovation and growth.
Hashgraph is a consensus algorithm that's gaining popularity in the world of decentralized technology. It's known for its lightning-fast transaction speeds, low transaction fees, and high security.
Below are some properties of hashgraph that make it powerful:
One of the key properties of hashgraph is its asynchronous Byzantine fault tolerance. This means that the algorithm is able to achieve consensus even in the face of malicious attacks or other types of failures.
With hashgraph, there's no need for a central authority or intermediary to verify transactions, which makes the platform truly decentralized and resistant to manipulation.
Another major property of hashgraph is its fast transaction speeds. With the ability to process thousands of transactions per second, hashgraph is one of the fastest consensus algorithms on the market.
This makes it ideal for use cases that require high throughput, such as micropayments or supply chain management.
In addition to its fast transaction speeds, hashgraph is also known for its low transaction fees. With hashgraph, there's no need for expensive mining hardware or proof-of-work calculations, which can significantly reduce the cost of transactions. This makes the platform more accessible to a wider range of users and use cases.
Hashgraph is designed to be fair and transparent for all users. With its unique consensus algorithm, every participant has an equal say in the decision-making process.
Additionally, all transactions on the platform are publicly visible, which ensures that the platform is transparent and trustworthy.
Finally, hashgraph is designed to be developer-friendly. With its robust suite of tools and resources, developers can easily build powerful applications on the platform. This includes the Hedera Token Service, which allows developers to create and manage their own tokens on the platform, and the Hedera Consensus Service, which enables developers to build decentralized applications with high-throughput messaging and ordering.
The working of Hedera Hashgraph is made possible by a series of protocols that work together to achieve consensus, maintain the integrity of the ledger, and enable developers to build powerful decentralized applications. From the gossip protocol to the consensus service protocol, each protocol plays a critical role in ensuring the success of the platform.
At the heart of Hedera Hashgraph is the gossip protocol. This protocol enables nodes on the network to share information with each other in a decentralized manner. Every node in the network gossips about the transactions it has received, and eventually, all the nodes have the same information about the state of the ledger.
This enables the network to achieve consensus without the need for a central authority.
To understand how the gossip protocol works in Hedera Hashgraph, let's consider an example.
Imagine that there are 10 nodes on the network, and a new transaction is initiated by one of the nodes.
This node will share the transaction with its immediate neighbors on the network through the gossip protocol.
Each of the neighboring nodes will then gossip about the transaction to their own immediate neighbors, and so on, until all nodes on the network have heard about the transaction.
As the transaction propagates through the network, it is timestamped and hashed, which ensures that the order and integrity of the transaction are maintained.
Once all nodes on the network have heard about the transaction through the gossip protocol, they can use the virtual voting protocol to determine the consensus about the transaction.
This involves each node creating a vote that contains the transaction information, and sending the vote to other nodes on the network.
The votes are weighted based on the reputation of the nodes, and the network uses the votes to determine the consensus about the transaction.
If there is enough agreement among the nodes, the transaction is added to the ledger.
Once the nodes on the network have received information about transactions through the gossip protocol, the virtual voting protocol is used to achieve consensus.
In this protocol, each node on the network creates a vote that contains the transactions it has received. The nodes then send their votes to other nodes in the network, until all nodes have received enough votes to determine a consensus.
Let’s take an example to understand this better. Considering the above example again.
There are 10 nodes on the network, and a new transaction is initiated by one of the nodes.
This node will share the transaction with its immediate neighbours on the network through the gossip protocol.
As the transaction propagates through the network, each node will use the virtual voting protocol to create a vote that contains the transaction information.
The vote includes a timestamp and a signature that ensures that the vote is valid and cannot be tampered with.
The votes are then shared with other nodes on the network through the gossip protocol.
The nodes receive the votes, verify the signatures, and use the timestamp to determine the order in which the transactions were received.
This enables the network to maintain the integrity of the ledger and ensure that transactions are added in the correct order.
Once all nodes on the network have received enough votes to determine a consensus, the network can add the transaction to the ledger.
This ensures that the ledger is always up-to-date and that all nodes on the network have the same view of the ledger.
The Byzantine fault tolerance protocol is another key component of Hedera Hashgraph. This protocol ensures that the network can still achieve consensus even if some nodes are malicious or fail to respond.
By using a voting system that weights votes based on the reputation of the nodes, the protocol can detect and ignore bad actors in the network.
In addition to the gossip protocol, virtual voting protocol, and Byzantine fault tolerance protocol, Hedera Hashgraph also uses a timestamping protocol.
This protocol ensures that transactions are recorded in the order they were received, which is crucial for maintaining the integrity of the ledger. By using a timestamping protocol, Hedera Hashgraph is able to provide a highly accurate record of transactions.
Finally, the consensus service protocol is a developer-focused protocol that enables developers to build decentralized applications on the Hedera Hashgraph platform.
With this protocol, developers can easily build applications that rely on high-throughput messaging and order, without having to worry about the underlying details of the consensus algorithm.
Smart contracts on Hedera Hashgraph are implemented using the Solidity programming language, which is also used on the Ethereum blockchain.
Hedera smart contracts are designed to provide high performance and security while being scalable and energy-efficient.
They are executed on a virtual machine called the Hedera Virtual Machine (HVM), which is designed to support the fast and efficient execution of Solidity smart contracts.
One of the unique features of Hedera smart contracts is their support for both tokenization and non-fungible tokens (NFTs). This allows developers to create their own custom tokens or NFTs, which can be used for a variety of purposes, such as creating digital assets, managing loyalty programs, or creating unique collectables.
Hedera smart contracts also support the creation of decentralized autonomous organizations (DAOs), which are organizations that are run entirely by code and operate on a decentralized network. These organizations can be used to manage funds, make decisions, and execute transactions without the need for a centralized authority.
The Hedera Consensus Service (HCS) is a distributed ledger technology (DLT) platform offered by Hedera Hashgraph, which provides a way for users to build and deploy decentralized applications (dApps) that require secure, trustless, and highly available consensus.
Unlike traditional blockchains, the Hedera Consensus Service is based on a directed acyclic graph (DAG) architecture that allows for faster and more efficient consensus among network participants.
The platform uses a unique consensus algorithm called Hashgraph, which provides fast, fair, and secure consensus by leveraging gossip about events in the network to arrive at a shared view of the order in which they occurred.
The Hedera Consensus Service provides a variety of features and tools for developers to create and deploy dApps, including a robust software development kit (SDK), support for multiple programming languages, and integrations with popular developer tools and services.
It also offers a range of enterprise-grade features, such as fine-grained access controls, built-in compliance and auditing tools, and support for private networks.
Some of its uses cases are:
Decentralized Finance (DeFi): The HCS can be used to create decentralized financial applications, such as stablecoins, exchanges, and lending platforms.
Supply Chain Management: The HCS can be used to track and trace goods throughout the supply chain, providing transparency and trust for all participants.
Gaming: The HCS can be used to build decentralized gaming platforms, allowing for secure and fair gameplay, as well as in-game asset ownership.
Identity Management: The HCS can be used to create decentralized identity solutions, providing users with control over their personal information.
Internet of Things (IoT): The HCS can be used to provide secure and transparent communication between IoT devices, as well as to track and manage device identities and data.
Hedera Token Service
The Hedera Token Service is a part of the Hedera Hashgraph platform, which allows for the creation and management of natively digital assets, known as tokens. These tokens can be used for a variety of purposes, such as creating loyalty programs, incentivizing users, and enabling new business models.
Hedera Token Service can be used to create both fungible and non-fungible tokens (NFTs), each with its own unique characteristics and use cases.
Here are some key features and benefits of the Hedera Hashgraph Token Service:
Scalability: The Hedera network can support hundreds of thousands of transactions per second, making it one of the fastest and most scalable blockchain networks in existence. This allows for high-throughput token transfers and other network activity.
Stability: The Hedera network uses a unique tokenomics model that is designed to maintain stable token prices over time. This is achieved through a combination of token burn and minting mechanisms that adjust the token supply in response to changes in demand.
Low Transaction Fees: The Hedera network has low transaction fees, which make it cost-effective for users to transfer tokens and conduct other network activity.
Micropayments: The Hedera network is optimized for micropayments, making it possible to send and receive tiny amounts of cryptocurrency with negligible transaction fees.
Interoperability: The Hedera network is designed to be interoperable with other blockchain networks, which means that tokens created on the Hedera network can be used across different platforms and ecosystems.
Regulatory Compliance: The Hedera Token Service is designed to be compliant with existing financial regulations, such as KYC/AML requirements, making it a more attractive platform for enterprise users.
Hedera File Service
Hedera File Service is a platform that allows users to store and manage large files on the Hedera Hashgraph network. It provides a secure, distributed, and cost-effective way to store and share files, with features like access control, versioning, and auditing.
Here are some key features and benefits of the Hedera File Service:
Decentralized Storage: The Hedera File Service is built on top of the Hedera Hashgraph network, which is a decentralized, distributed ledger. This means that files are stored across a network of nodes, making it more secure and resistant to data loss or corruption.
High Availability: The Hedera network is designed to provide high availability, with nodes located across different geographies and jurisdictions. This ensures that files are always accessible, even in the case of network disruptions or downtime.
Access Control: The Hedera File Service allows users to control who can access their files, with features like role-based access control and public/private keys.
Versioning: The Hedera File Service supports file versioning, which means that users can keep track of changes to their files over time and revert to previous versions if needed.
Audit Trail: The Hedera File Service provides an audit trail of all file activity, including access, modification, and deletion. This makes it easier to track who has accessed a file and when.
Some Other Hedera Services:
Consensus Service: Provides fast, fair, and secure consensus for building decentralized applications.
Identity Service: Provides a decentralized identity solution, enabling users to manage their personal information and control their digital identities.
Mirror Nodes: Allows developers to query the Hedera network for transaction data, providing a transparent view of network activity.
Smart Contract Service: Allows for the creation and deployment of smart contracts, providing a secure and trustless way to execute business logic.
Integrations: Provides integrations with a range of popular developer tools and services, including AWS, Azure, and Google Cloud.
The Hedera Hashgraph platform has a wide range of potential use cases across a variety of industries, thanks to its scalability, security, and fast transaction speeds. Here are some examples of how Hedera Hashgraph can be used:
Payments and Financial Transactions: The Hedera network can be used to process high volumes of financial transactions quickly and efficiently. This makes it well-suited for applications like micropayments, remittances, and cross-border payments.
Supply Chain and Logistics: Hedera Hashgraph can be used to track the movement of goods and raw materials across a supply chain, providing greater transparency and accountability. This can help to reduce fraud, waste, and delays in the supply chain.
Gaming and Digital Assets: Hedera Hashgraph can be used to create and manage digital assets like in-game items, virtual currency, and NFTs. This can provide new revenue streams for game developers and enable new forms of user engagement and monetization.
Identity and Access Management: Hedera Hashgraph can be used to create secure, decentralized identity solutions that give users greater control over their personal data. This can help to prevent identity theft, data breaches, and other forms of cybercrime.
Healthcare: Hedera Hashgraph can be used to securely store and share medical records and other sensitive health data. This can improve patient outcomes, reduce medical errors, and facilitate medical research.
Energy and Utilities: Hedera Hashgraph can be used to optimize energy and utility grids, enabling more efficient distribution and usage of resources. This can help to reduce energy waste, lower costs and optimise the system.
Transactions per second
Transaction confirmation time
$0.0001 – $0.10
$20 – $50
Energy per transaction
100 – 900 KWh
Voting, proof of stake
Proof of stake, work, time, space
Asynchronous Byzantine Fault tolerance
The network's native cryptocurrency is called HBAR, which is used to pay transaction fees, incentivize nodes to participate in consensus, and participate in governance through a voting process.
HBAR is a utility token that is designed to be used within the Hedera network. It can be used to transfer value, create and manage digital assets and other types of tokens, and execute smart contracts on the network.
HBAR is also used to pay for network services, such as transaction fees and storage fees.
One of the unique features of the Hedera network is its governance model. HBAR holders have the ability to participate in network governance by voting on proposals that are submitted by members of the Hedera community. This allows the community to have a say in the development and evolution of the network.
Hashgraph technology and the Hedera platform have several benefits that make it a viable alternative to traditional blockchains. Among these benefits are gains in speed, cost, and energy.
Speed: Hashgraph does not arrange data into blocks like blockchain techniques. Rather, a consensus helps to determine whether or not a given transaction is entered to the ledger. This method shortens transaction times, allowing a Hashgraph network to handle up to 250,000 transactions per second. On the Hedera Hashgraph, this speed is now throttled to 10,000 TPS, although it may be increased if necessary. Another advantage of its consensus system is that transactions are verified in 3–5 seconds. This puts Hedera far ahead of the 10 to 60-minute blockchain confirmation timeframes, putting it on pace with credit card firms.
Fairness: Fairness is a concern with blockchain applications since miners might choose whether or not to execute your transaction. This is determined by transaction fees. Individuals who pay larger fees have better attention than others, resulting in inequity. Using its consensus technique, the Hashgraph protocol removes this. As long as no transactions are detected, they are processed. And they are added to the ledger once two-thirds of the network has processed them.
Security: To maintain a secure network, Hashgraph employs a technique known as asynchronous Byzantine fault tolerance. To avoid a harmful system collapse, Byzantine fault tolerance considers the probable unreliability of the network's nodes while achieving a consensus. The system is also safe from DDoS and Sybil assaults.
Minimal Energy Usage: To execute transactions, blockchains rely on miners. Yet, several miners will attempt to mine (or process and hash a block's content) at the same time. And only the first person to correctly answer the question wins. Those who expended processing resources to determine the correct hash receive no recompense, and their energy is squandered. Hashgraph consumes less than 0.0002 KWh every transaction, making it far more energy-efficient and ecologically friendly than other blockchains.
Low cost: Hedera Hashgraph's transaction costs are also very minimal, beginning at $0.0001 depending on what you need to perform on the system. Yet, the expenses are negligible, and significantly less than the $15+ that popular blockchains charge every transaction.
There are a few drawbacks to Hedera Hashgraph that should be considered. The main issue here is the ownership model of the technology and how the network is operated.
Swirlds patent: Hashgraph is patented. One of the primary reasons for blockchain's success is its open-source nature. As a result, everyone felt compelled to contribute to something bigger than themselves. A type of movement. Hashgraph's technique, on the other hand, is protected by a patent. Swirlds is the name of the corporation that owns the patent. Leemon Baird, the creator of Hashgraph, owns this firm. And for a 10% charge, he licensed it to Hedera. This means that, unlike the blockchain, the project will never genuinely belong to the public.
Permissioned ledger: To participate in the Hedera network, you must first get an invitation. This condition elevates it to the level of an exclusive club. There are intentions to make the network entirely public and permissionless, similar to Bitcoin, however these are only plans and have yet to be realized. As a result, it remains an exclusive club for the time being.
Not Minable: There is currently no method to mine and earn Hashgraph. Therefore the only method to obtain HBARs is to purchase them. Nonetheless, there are plans to include POS (proof of stake) mining in Hedera Hashgraph. But, as previously said, they are still proposals that have yet to be realized.
Hedera Hashgraph is a decentralized public ledger that uses a novel consensus algorithm called hashgraph to achieve high throughput, low latency, and high security. It is designed to be a faster and more efficient alternative to traditional blockchain platforms.
Hashgraph is a consensus algorithm that uses a gossip protocol to achieve consensus among nodes on a network. Nodes share information with each other about transactions and events in the network, and use a virtual voting system to reach agreement on the order and validity of transactions.
HBAR is the native cryptocurrency of the Hedera network. It is used to pay for network services, such as transaction fees and storage fees, and to incentivize nodes to participate in consensus. HBAR can also be used to create and manage digital assets and execute smart contracts on the network.
Hedera Hashgraph offers several benefits over traditional blockchain platforms, including high throughput, low latency, and high security. It also has a flexible governance model that allows the community to have a say in the development and evolution of the network.
Hedera Hashgraph can be used to create a wide range of decentralized applications, including digital marketplaces, supply chain management systems, decentralized finance (DeFi) platforms, and more. It can also be used to create custom tokens and other types of digital assets.
To get started with Hedera Hashgraph, you can visit the official Hedera website and explore the various resources and documentation available. You can also participate in the network by running a node, developing decentralized applications, or simply using HBAR to transact on the network.
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