Hedera (HBAR) is a cryptocurrency operating on the innovative hashgraph blockchain technology. Hedera Hashgraph supports digital currencies, smart contracts, and decentralized applications (DApps), offering developers three core services: Solidity-based smart contracts, consensus mechanisms, and token services.
What Makes Hedera Unique?
Hedera stands out in the blockchain space through its exceptional combination of:
- Lightning-fast speeds - Processes transactions significantly faster than traditional blockchains
- Energy efficiency - Maintains a negative carbon footprint
- Enterprise-grade security - Protected by advanced hashgraph consensus algorithms
These advantages stem from Hedera's underlying hashgraph consensus algorithm, which became open-source in 2022.
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The Origins of Hedera Hashgraph
Leemon Baird, co-founder of Swirlds Inc and former computer science professor, invented Hashgraph technology in 2016. In 2018, he partnered with Mance Harmon to launch the Hedera Hashgraph project, commercializing the technology for enterprise implementation.
This new form of distributed ledger technology promised to process over 2.5 million transactions per second—a stark contrast to early blockchain systems struggling with 10-20 transactions per second.
Key Developments in Hedera's History
- 2017: Swirlds secured seed funding to bootstrap Hedera's development
- 2018: Mainnet launch with enterprise-grade partners
- 2019: HBAR token launched at $0.11 per token
The Hedera Governing Council now includes over seventeen major corporations, including Boeing, Google, IBM, Tata Communications, and LG Electronics.
How Does Hedera Work?
Hedera Hashgraph employs two primary protocols:
- Gossip Protocol: Enables rapid information spreading across nodes
- Virtual Voting: Ensures consensus without extensive communication overhead
The platform features a unique two-tier governance structure:
- Open Consensus: Controls node participation in the hashgraph
- Council: Provides centralized oversight for network stability
Developers need HBAR tokens to pay for network services when building on Hedera. Nodes can also stake HBAR to earn rewards for providing network resources.
HBAR Tokenomics
- Total Supply: 50 billion HBAR
- Circulating Supply: Approximately 7.5 billion (as of 2021 data)
Allocation:
- 20 billion reserved for founders (6-year vesting period)
- Remainder distributed through proxy staking and network operations
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Why Does HBAR Have Value?
HBAR serves three critical functions within the Hedera ecosystem:
- Network Fuel: Powers transactions and smart contract execution
- Security Mechanism: Used in staking to validate transactions
- Transaction Fees: Pays for network operations
The fixed supply of 50 billion HBAR tokens was created entirely at network launch, with no additional minting possible.
Primary Uses of HBAR
- Network Operations: Paying for transaction processing
- Staking Rewards: Earning passive income through node participation
- DApp Usage: Required for interacting with Hedera-based applications
Transaction fees remain exceptionally low, with most operations costing fractions of a cent.
Frequently Asked Questions
What makes Hedera different from traditional blockchains?
Hedera uses hashgraph technology rather than blockchain, offering superior speed (thousands of transactions per second), energy efficiency, and security through its unique consensus mechanisms.
How can I earn passive income with HBAR?
Through proxy staking—you can delegate your HBAR to approved nodes and receive a portion of their transaction rewards without running infrastructure yourself.
Is Hedera centralized because of its Governing Council?
While the council provides oversight, the network's consensus mechanism remains decentralized. The council ensures enterprise-grade reliability while preventing forks.
When was HBAR launched?
The HBAR token launched in September 2019 at an initial price of $0.11 per token.