What Is Hedera (HBAR)?
HBAR is the native token of Hedera, which is a decentralized public network developed on Hashgraph. It allows users to create decentralized applications (dApps).
Make sure to check the Hedera price chart above if you want to see the live HBAR price.
Hedera is an improved alternative to outdated blockchains. It deals with the issues faced by older blockchains because it’s constructed as a more equitable and effective system that gets rid of sluggish performance and instability issues.
Besides, Hedera, unlike the majority of other crypto platforms, is not based on a traditional blockchain. Instead, it introduces Hashgraph, which is an entirely new sort of distributed ledger technology (DTL) developed by the Hedera team.
Hashgraph provides several advantages for the Hedera network, including faster transaction speeds, lower fees, and scalability. Transactions on this network usually take up to 5 seconds to be completed and their average cost is $0.0001.
In total, Hedera is able to process more than 10,000 transactions per second (TPS). The network is able to do that because it completes transactions in parallel rather than linearly.
Besides allowing developers to create dApps using its smart contract tools, Hedera also offers some other useful features. This includes a token service, a consensus service, and decentralized file storage.
Talking about token service, its users can swiftly configure and mint fungible or non-fungible tokens (NFTs) on Hedera, even if they lack programming experience. The consensus service, on the other hand, is a layer of trust for any network or dApp that requires a secure and independent record of events.
Lastly, the decentralized file storage service allows users to store various types of data. The service has such features as Proof-of-Deletion, restricted mutability, and time-based file expiry. Besides, the Mirror Node software developed by the Hedera team makes public ledger data storage resource-efficient and cost-effective.
The Founders of Hedera
The Hedera crypto project was developed by Dr. Leemon Baird and Mance Harmon.
Dr. Leemon Baird is the chief scientist of Hedera. He developed the hashgraph distributed consensus algorithm. Prior to founding Hedera, Dr. Braid was a senior research scientist at the Academy Center by Cyberspace Research.
Mance Harmon is the CEO of Hedera. He has a lot of experience in the IT security industry. For instance, before founding Hedera, Harmon worked on a software project for missile defense systems for the US government.
Besides, in 2015, both Dr. Leemon Baird and Mance Harmon founded a company called Swirlds. Essentially, it allows developers to create private blockchains for large corporations. The company contributed a lot to the creation of Hedera.
Though Swirlds is just one of 39 prominent companies, including banks, healthcare providers, law firms, and others, that contributed to the development of Hedera. Each of these companies made an equal contribution to the project. However, only 2.6% of Hedera is owned by each company.
Hashgraph Consensus Mechanism
The Hedera crypto project employs a unique Hashgraph consensus mechanism which is a variation of the Proof-of-Stake algorithm. Essentially, holders of HBAR can stake their assets to secure the network.
A rotating council of up to 39 extremely diverse organizations serves as the governing body for the Hashgraph consensus algorithm. The responsibilities that the organizations have include:
- Managing the Hedera codebase
- Casting votes in decision-making processes
- Running the initial Hedera network nodes
Hedera's security configuration assures that it achieves asynchronous byzantine fault tolerance (ABFT). ABFT is a property of Byzantine fault-tolerant consensus algorithms. Using ABFT, trustworthy network nodes can ensure that they will agree on the time and order of a set of transactions in a fair and safe manner.
Besides, based on the Hashgraph consensus mechanism, Hedera employs a patented codebase. This allows the developers to construct dApps without a license on top of the network. As a result, Hedera is both open to the public and secured by a patent. The patent prohibits other developers from using the same coding to build rival dApps.
The Purpose of HBAR Coins
HBAR coins have two main purposes – they drive the network and secure it.
In terms of driving the network, the primary source of energy for Hedera services is HBAR tokens. HBARs are used by developers to pay for network services such as token transfers, fungible and non-fungible token management, and data logging. Besides, HBAR tokens are used to pay network nodes for storage, computing, and bandwidth for each transaction that is sent to the network.
Secondly, HBAR tokens serve to strengthen network security. HBAR holders can stake their tokens to support preserving the platform's reliability and keeping the network safe from DDoS or other malicious attacks.
Besides, HBARs are staked to weigh votes on transactions when reaching consensus. It’s challenging and expensive for a malicious attacker to purposefully influence consensus when using weighted voting with HBAR coins. They would have to possess and stake more than a third of the network's entire supply of HBAR.
Don't forget to take a look at the Hedera price chart where you can find current and previous HBAR prices.
Tokenomics of HBAR Coins
The max supply of HBAR coins is 50 billion. Since it has a limited supply, HBAR coins are deflationary. However, not the whole supply is actually in circulation. Hedera regularly releases reports indicating when the subsequent wave of HBAR tokens will become available.
The pre-minted Hedera Treasury receives the majority (32.4%) of the HBAR supply. A similar percentage (24%) is earmarked for network growth. The remaining balance is divided among purchase agreements, founders and early executives, staff members and service suppliers, and Swirlds.
In 2018, an initial coin offering (ICO) of HBAR tokens was held. During the ICO, the HBAR price was $0.12. However, the crypto market is known for its volatility, thus, it tends to influence the prices of almost all crypto assets, including the Hedera price.