Hedera Hashgraph: Fundamentals, technicals, tokenomics and future outlook
What is Hedera?
Hedera is an enterprise-grade distributed public ledger built from the ground up to support applications at a web 3.0 scale. Hedera is based on the patented hashgraph algorithm, an alternative to the usual blockchains we widely see in the cryptocurrency space. This hashgraph algorithm allows Hedera to make transactions in the network that are fast, fair and secure.
The network claims itself as the third generation of blockchain — the first and second being Bitcoin and Ethereum, respectively. Hedera achieves the same results as generation 1 as well as generation 2 blockchains but is faster, fairer, stable and more energy-efficient. These features in totam makes the Hedera Network suitable for enterprises.
How Does it Work?
Hedera uses a completely different method to reach a consensus on the ledger. Traditional blockchains like Bitcoin utilise the proof of work blockchain to add blocks by letting miners compete for solutions on computational puzzles. In stark contrast, the hashgraph Consensus allows all the nodes to agree on the transactions that should be added to the ledger. The nodes are run by selected council members, which are large well-regarded organisations to ensure network stability.
Blockchains tend to let new blocks containing transaction data settle in the longest chain. For example, suppose there are multiple blocks created at the same time. The network would choose 1 and discard the others. However, hashgraph uses the gossip about gossip method. As the name suggests, gossip-about-gossip sends information across nodes like gossips and come to transaction consensus. This makes Hedera more efficient since all the transactions are incorporated into the ledger, and none are omitted.
Every transaction is added to the ledger in the case of hashgraph, and all branches seen above exist forever. On top of this network, Hedera allows users to build decentralised applications using token services and Consensus.
The Governance Council
Hedera has a global governing council of up to 39 world-leading organisations that lead the Hedera network. The council consists of organisations like Google, Boeing, Development Bank of Singapore, Chainlink Labs, IBM, LG, London School of Economics, Tata Communications and much more. The governance council is responsible for the following:
- Hosting and maintaining nodes of the network
- Establishing governance frameworks
- Oversee software run by nodes
Use Cases
Start-ups and enterprises use Hedera for payments, tokenised assets, fraud mitigation, and data compliance. Following are some of the industries actively using Hedera:
- Healthcare, Media, Agriculture, Logistics, Retail, Technology, Financial Services, Energy, Environment
Tokenomics of HBAR
HBAR is the native token of the Hedera public network and has the following use-cases:
- Transaction fees to incentivise computing resources
- Securing the network through proof of stake consensus
Growth and Future Outlook
Hedera has achieved significant success on the institutional front and is being used extensively by organisations. The governance council consists of high-value organisations, which boost the outlook and prospects for the network. Additionally, Hedera’s future roadmap also includes more updates to the network in terms of performance, scale, ecosystem, network and decentralisation, which should positively impact the network and price.
HBAR, the native token of Hedera is ranked 37th among all cryptocurrencies and has been up 634.4% over the past year.
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