What is Hedera Hashgraph? A Guide For The Beginners | Review
Hedera Hashgraph is a decentralized public network that makes the digital world exactly as it should be. The native cryptocurrency of the Hedera public network is HBAR.
About Hedera Hashgraph
Hedera is designed for fast, fair, and secure applications to take advantage of the efficiency of Hashgraph on a decentralized, public network that everyone can trust. Unlike blockchain-based DLTs, Hashgraph has a high throughput of tens of thousands of transactions per second. It can be employed in decentralized systems that require high performance and security such as auctions, online games, and micro-payments. In fact, Hedera is a decentralized public network where anyone can carve out a piece of cyberspace to transact, play, and socialize in a secure, trusted environment.
Hedera Hashgraph is developed by Dr. Leemon Baird in 2016, who is the Co-founder, CTO and CSO (Chief Science Officer). He holds a Ph.D. in Computer Science and is an author of multiple academic junior publications. Baird is also the Founder and CEO of Swirlds, a joint-stock company designed to build fully-distributed applications that harness the power of the cloud without servers.
The other Co-founder of Hedera Hashgraph is Mance Harmon, who is currently the CEO, covering operations and management.
Both Baird and Harmon have worked together at the Trio Security, and later at BlueWave Security.
The Meanings Behind the Names
Hashgraph refers to a distributed consensus algorithm, and Hedera refers to the distributed ledger that will implement the Hashgraph technology. Overall, it is a distributed ledger platform that is similar to Ethereum, which can run DApps and support smart contracts.
What Exactly is HBAR?
HBARs are the native cryptocurrency that is used to pay for transactions on the Hedera platform and to secure the network from certain types of cyberattacks. They are the native platform coin needed to interact with and exchange value on Hedera.
The symbol for HBARs is “ℏ” so 5 ℏ means 5 HBARs.
Tinybars are smaller than HBARs. They are used to divide HBARs into smaller amounts. One HBAR is equivalent to one hundred million tinybars.
Likewise, the symbol for tinybars is “tℏ” so it is correct to say 1 ℏ = 100,000,000 tℏ
So, here are the offical HBAR denominations :
gigabar 1 Gℏ = 1,000,000,000 ℏ
megabar 1 Mℏ = 1,000,000 ℏ
kilobar 1 kℏ = 1,000 ℏ
hbar 1 ℏ = 1 ℏ
millibar 1,000 mℏ = 1 ℏ
microbar 1,000,000 μℏ = 1 ℏ
tinybar 100,000,000 tℏ = 1 ℏ
However, ℏ or h-bar is a symbol that represents the reduced Planck’s constant.
You can see https://en.wikipedia.org/wiki/Planck_constant#Value
The Planck constant is one of the smallest constants used in physics. Very fitting since HBARs will be the cryptocurrency that enables the mass adoption of micropayments.
The Accessibility of Hedera Hashgraph
The network services that build with Hedera are mentioned below:
- CRYPTOCURRENCY: Fast cryptocurrency transactions, low fee payments.
With the help of cryptocurrency, transactions can be expressed in code without costly intermediaries. The Hedera Cryptocurrency API gives people the tools to manage their accounts and enable scalable, low-latency transactions that cost a fraction of a cent by using the native network coin, HBAR.
There is, in fact, a better way to transact as well, which is again mentioned below for better understanding –
CUSTOMIZABLE — With transactions of value expressed as code, now people can create unique experiences, such as developing a service that enables them to pay for reading a blog post or enabling IoT devices to establish a data marketplace.
SCALABLE TRANSACTIONS — The efficiency of Hashgraph generates extremely fast cryptocurrency transactions with low-latency finality in seconds.
2. SMART CONTRACT: Smart Contracts make possible to build an entirely new class of application. Whether people create a decentralized bidding marketplace or tokenizing a piece of land, the Hedera Smart Contract API enables people to arrange and run Solidity Smart Contracts on the Hedera public network.
So, the network features of Smart Contract API are –
SOLIDITY SUPPORT — The Hedera Smart Contracts service fully supports the open-source solidity language, where people can drop in solidity code and take advantage of popular community tools and frameworks.
SCALABLE REALMS — Smart contracts on Hedera can be run within realms — a defined portion of the network, isolated to execute a smart contract, which will make it possible to process multiple smart contracts simultaneously.
TOKENIZED ASSETS — With smart contracts, anyone can tokenize the deed to a home, a rare in-game item, or even create their own token with defined characteristics and ownership. Likewise, Hedera supports solidity community standards, such as ERC-20 and ERC-721 tokens.
BINDING ARBITRATION — When someone creates a smart contract on Hedera, they can optionally set admin keys to enable binding arbitration that can change it.
FAIR ORDERING — Hedera does not allow any single node to influence a transaction’s ordering. People’s smart contracts are processed in the order they are received, not based on how much gas they are willing to pay.
BEST-IN-CLASS SECURITY — Hedera Smart Contract takes advantage of the Hashgraph consensus algorithm’s proven, asynchronous Byzantine fault tolerance, to keep their application running.
3. FILE SERVICE: It manages and verifies files. Hedera File Service uses to anchor external data to the transparent public ledger.
The network features of File Service are –
TRANSPARENT TRANSACTIONS — Collaborate between parties with shared data records for more efficient data reconciliation and processes by using verified signatures and consensus timestamps.
DEFINE OWNERSHIP — Manage a write access control list to define ownership of files with advanced key structures.
REVOKE CLAIMS — When granting access to someone, people often need to revoke access, too; like an employee’s access to a building. Accounts on Hedera can have livehashes to establish an instantly verifiable and revokable claim.
CONTROLLED MUTABILITY — A file can be deleted by its owner. For example, to comply with regulatory requirements, and afterward, a state proof can prove to third parties that it was deleted.
POINT OFF-LEDGER — Cost-effectively manages large documents by creating a file containing a hash that acts as a pointer to an off-ledger document stored in the cloud.
GLOBALLY DISTRIBUTED — Hedera File Service distributes anyone’s file to each node in the Hedera network, ensuring high availability and reliability.
4. CONSENSUS SERVICE: Build directly on Hashgraph.
With the Hedera Consensus Service, people can develop applications like stock markets, audit logs, stable coins, or new network services that require high throughput and decentralized trust. This is made possible by having direct access to the native speed, security, and fair ordering guarantees of the Hashgraph consensus algorithm, with the full trust of the Hedera ledger.
The network features of Consensus Service are –
TOP MANAGEMENT — Topics make it simple to organize transactions, so each application only receives the messages it needs.
CONSENSUS ORDER — Messages are put into consensus order and given a timestamp by the Hedera network, with cryptographic proofs so that they are as trustworthy as the full Hedera network.
AUDIT LOG — Messages are cryptographically tied together with a running hash to provide an auditable, tamper-proof log of history.
SCALABLE TRANSACTIONS — Message processing and storage are kept outside the Hedera network. This allows higher speed and scalability.
LOW FEES — The high speed and good scaling ensure low, micropayment fees on par with Hedera Cryptocurrency.
HISTORICAL DATA — The Hedera Consensus Service ensures speed and security that are kept on the ledger while storage is kept off-ledger, choose to keep everything, nothing, or anything in between.
For more details, you can visit the official website of Hedera Hashgraph: https://www.hedera.com
Why and How is Hedera Hashgraph Important?
Hedera Hashgraph has launched its long-awaited public network, supported by some of the world’s largest corporations and promising faster transactions and greater capacity to scale than any blockchain to date.
Since December 2018, the network had been available in a testing environment to a small group of corporations and developers.
Thus, a year and a half in the making, the Hashgraph stands out from other distributed ledger technologies (DLTs) in several ways. Its creators claim that it works more efficiently than blockchains, making it more suitable for enterprises and commerce.
Specifically, the Hedera network can support up to 10,000 transactions per second, compared to 2.8 per second for Bitcoin and 15 for Ethereum, the two largest blockchains.
When Hedera is compared to platform blockchains like Ethereum, Hedera appears to offer a compelling feature set and faster transaction times.
Actually, Hedera Hashgraph is based on a DAG (Directed Acyclic Graph). This form of DLT does not rely on a proof-of-work or proof-of-stake consensus mechanism. Instead, Hedera network participants act as nodes that validate each other’s transactions which lead to faster consensus. However, Hashgraph is not decentralized. Instead, it has a governing council with members including corporate heavyweights such as IBM and Boeing.
After years of development, Hedera came out of stealth mode and launched the public beta of its mainnet in September 2019. The Hedera team describes the Hashgraph as a 3rd generation public ledger, just like they refer to Bitcoin as 1st generation and Ethereum as 2nd generation.
It can also be claimed that the Hashgraph can process up to 10,000 transactions per second, an order of magnitude faster than current blockchains.
Check out a Tweet on Hedera:
A big Thanks to @itspublu, co-founder of @hashingsystems for joining hands with us. We are looking for a power-packed and intense session.
Registration link:- https://t.co/UjoYUVIKMv@hashgraph @HBarPrice @myEarthID @AoChain @tatacommunicat @Swirlds @IBM @Boeing @DeutscheBank pic.twitter.com/dnyqvfqKVf
— Rejolut- An Emerging Tech Company (@rejolut) November 1, 2019
Is There Any Relation Between Hashgraph and Blockchain?
It is possible to compare Blockchain and Hashgraph based on three main aspects, namely data storage, data structure, and protocols. Blockchain implies storage of transaction records in a block, including current hash, timestamp, as well as the transaction from the preceding block.
On the other hand, Hashgraph stores data in the form of an event, containing timestamps and transactions with the regular hashes. It is also possible to view the history of the transactions in a graph.
Actually, Hashgraph is not a Blockchain. So, we can differentiate both Hashgraph and Blockchain in a simple way:
- Hashgraph is a Distributed Ledger Technology (DLT), but not a blockchain.
- Architected from the ground up to be fast, fair and secure.
- Hashgraph makes no security trade-offs to achieve speed.
- Combines a gossip protocol with virtual-voting to effectively and quickly disseminate events and achieve consensus.
- The minimum amount of data transferred.
- No Trade-off between Speed, Security, and Centralization.
- Super low energy consumption DLT.
- Blockchain is designed to be slow.
- The proof-of-work puzzle adjusts to keep the system at a specific speed.
- The time needed to determine which block to add to the chain.
- If it is not slow, then it does not work.
- Efforts to speed up blockchain all make security sacrifices.
- The trade-off between Speed, Security, and Centralization.
- Very high energy consumption DLT.
For more details, you can check: https://hbarprice.com/
Check out a Tweet on Hedera:
What is #quantumsupremacy and how could this impact #DLT cryptography? Learn from Atul Luyks, our Head of Cryptography in this fascinating #podcast episode https://t.co/bhyITkOsa7#podcasts #podcasting #QuantumComputing #ThursdayThoughts #developer #programming #coding #code pic.twitter.com/GhjB3H5vFc
— Hedera Hashgraph (@hashgraph) October 31, 2019
News on Hedera
On September 16, 2019, a blog post was published by Hedera that during the Open Access (OA) period, anyone from the general public can create an account while developers can start building decentralized applications, also known as DApps, on the platform.
The post continues:
“With hundreds of developers already building on the network over the last few months during its closed beta, the Hedera mainnet launches with 26 DApps and solutions now running live. […] With Open Access, the Hedera Hashgraph network offers three services: 1) Cryptocurrency, throttled to 10,000 transactions per second, 2) Smart Contract and 3) File Service. Hedera’s smart contract and file service offerings are both currently throttled to 10 transactions per second.”
As per the announcement though, Hedera plans to increase the network’s speed methodically throughout the remainder of 2019. At the same time, the recently announced Hedera Consensus Service will be publicly available later this year.
With the start of the OA period, the Hedera treasury is also set to begin distributing the platform’s native HBAR tokens, according to the economics whitepaper.
The document explains:
“Less than 8% of the total hbar supply is expected to be circulating before the end of 2019 and less than 34% is expected to be circulating for the first five years after network launch. This release schedule is one of the mechanisms that will ensure that no attacker will be able to disrupt the network. It also will ensure the price of hbars is determined primarily through market forces, rather than by the Hedera Council.”
Hedera’s 15-year Distribution Plan
The whitepaper notes that investors who participated in Hedera’s three rounds of a $124 million crowd sale from March 2018 to August 2018 will be the first to receive HBARs — overall, more than 379 million tokens. Another 1.95 million tokens will go to advisors, vendors and other participants. The network’s governing council plans to release the total 50 billion HBARs supply over the next 15 years.
So, initially, 14 cryptocurrency exchanges and over-the-counter desks announced their plans to list Hedera’s HBAR tokens for trading: AlgoZ, BitOoda, Bering Waters, Bittrex, Carbon, Galaxy Digital, Galois, GSR, Liquid, OkCoin, OKEx, OSL, Upbit, and xFutures.
Views and Opinions about Hedera Hashgraph
There are many people out there whose different views and opinions about Hedera matters the most.
Don Oparah, Head of Technology of RedSwan, said:
“Hedera will make it easy to port our existing Solidity smart contracts and get up to speed quickly. We’re excited for the future of tokenized assets to provide greater access and liquidity for everyone.”
Oliver Bolton, CEO, and Co-founder of Almond said:
“Hedera’s asynchronous Byzantine fault tolerance gives me the peace of mind to focus on building on an amazing product.”
On the other hand, Jiro Olcott, Director of Hedera Hashgraph said:
“Hedera is the only platform we’ve seen that can cope with the volume of split-second transactions that need to take place.”
Bryan Gross, the Principal Product Manager of IBM Blockchain Platform, stated:
“There are a number of challenges in using traditional ordering services for decentralized applications. By exposing this capability, Hedera is making a meaningful contribution to furthering the capabilities of distributed networks.”
Check out a Tweet on Hedera:
The 2 roles of HBAR that #developers must know before building #decentralized #applications.
Network fuel — to run a #smartcontract, store a file or transfer cryptocurrency
Network protection — weighted votinghttps://t.co/Pk3jvqGUO2#developer #programming #coding #programmers
— Hedera Hashgraph (@hashgraph) October 30, 2019
Thus, it can be said that Hedera achieves the highest-grade of security possible, with blazing-fast transaction speeds. By combining high throughput, low fees and finality seconds, Hedera leads the way for the future of public ledgers.
Hedera Hashgraph addresses all the main obstacles for enterprises in DLT including performance, stability, security, and governance. In the near future, Hashgraph will be able to host hundreds of millions of transactions in a wide array of use cases. This will be unlike anything anyone has ever seen before.
Source: blockchain.intellectsoft.net | hbarprice.com | hedera.com