Hedera Hashgraph is a public network based on distributed ledger technology (DLT), designed for businesses and companies as a platform for decentralized services and applications. How does it work? How to use it? Let’s see together!
Hedera bills itself as a third-generation public network, following in the footsteps of bitcoin and Ethereum. High scalability, security, smart contracts, energy efficiency, and low usage fees are among its advantages.
Hedera Hashgraph is governed by a board of trusted companies in charge of software development and determining the overall platform’s development path. Boeing, Swirlds, IBM, Nomura Holdings, and Ubisoft are among the board members.
Hedera Hashgraph is based on ABFT’s Proof-of-Stake (PoS) consensus algorithm. According to the developers, this approach ensured a high level of network security while keeping transactions fast and cheap.
Who created the Hedera Hashgraph and when?
The Hedera Hashgraph platform is based on the Hashgraph protocol patented in 2016 by Swirlds. The solutions were developed by the organization’s CTO, Leemon Baird.
The first hands-on implementation of Hedera Hashgraph took place in 2017 as a shared enterprise network for the National Credit Union Association (CUNA) and Mountain West Credit Union Association (MWCUA).
Hedera Hashgraph’s public platform was co-founded by Swirlds co-founder Mance Harmon and Leemon Baird.
In 2018, startup Hedera Hashgraph raised $100 million in development funding. In 2019, the developers launched a public beta version of the network.
Hedera Hashgraph Investors
The Hedera Hashgraph platform has secured the support of a number of major investors:
- Digital Currency Group (DCG)Parent company of digital asset manager Grayscale Investments. DCG has invested in many well-known industry players, including Coinbase, Kraken, Coinlist, Zcash, Ripple, Ledger and Decentraland;
- Fenbushi DigitalIt is one of the oldest and most famous Chinese venture capital companies. Until 2018, Ethereum co-founder Vitalik Buterin was its general partner. The firm has participated in the funding rounds of The Graph, 1inch Network, and Nym Technologies;
- Multicoin CapitalIt is a cryptocurrency investment company founded in 2017. Multicoin Capital led one of the first funding rounds of Solana Labs and also invested in the FTX exchange. In July 2022, the company announced a $430 million crypto venture capital fund.
Who manages Hedera Hashgraph?
The platform is governed by the Hedera Governing Council, which was formed in 2019 from several Fortune 500 representatives.
Members of the structure as of the end of July 2022 include Boeing, Swirlds, IBM, Nomura Holdings, and Ubisoft. The number of governors is limited to 39. Their terms are for three years, with the option of being renewed for another two.
The board must protect the code base’s integrity and address the risks of a hardfork. It also establishes network rules, sets membership policies, manages the platform’s treasury, and approves technical changes.
Because Hashgraph’s technology is patented, unauthorized use of the Hedera code is subject to prosecution. According to the project team, this approach means that the network cannot be copied and run by other participants in the crypto market.
This significantly distinguishes the project from bitcoin — anyone can use the blockchain code of the first cryptocurrency and change it as they see fit.
How is Hedera Hashgraph used?
The developers position the project as a platform for business, so the network has a number of characteristic features. For example, unlike Ethereum and BNB Chain, an ordinary user cannot launch a smart contract or a decentralized application.
To get full access to Hedera services, it is necessary to create a personal account and be verified. Once verified, the following features will open:
- Issuing and managing tokens, including NFTs;
- Creating and running smart contracts in the Solidity and Vyper programming languages;
- File service operations — storage, verification, browsing, and management of credentials and other information on the network.
This approach helps protect the platform from fraudsters and ensures compliance for individual participants in specific jurisdictions.
Through intermediaries like exchanges and authorized wallets, Hedera Hashgraph allows the creation of “regular” accounts without verification. The current list is available on the project website.
Hedera Hashgraph features
The source code of Hedera is closed and protected by a Swirlds patent. The members of the Hedera Governing Council are responsible for the management and development of the platform.
According to the developers, Hedera Hashgraph is an enterprise-level platform with limited user access to the network and its development capabilities. It is one of the few crypto-industry projects initially focused on regulatory compliance.
Despite its limitations, Hedera Hashgraph has a number of competitive advantages highlighted by the project team:
- Speed and scalabilityAs of July 2022, the platform is capable of processing more than 10,000 transactions per second with the ability to scale further with the implementation of sharding technology.
- Low commissionsTransaction fees are a fraction of a cent, which sets Hedera apart from competitors like Ethereum and BNB Chain.
- Low power consumptionThe network does not require energy-intensive calculations that occur in Proof-of-Work networks. According to the project, Hedera consumes only 0.00017 kWh, which is hundreds of thousands of times less than the bitcoin blockchain.
- Legal ComplianceHedera is focused on compliance with laws in various jurisdictions through restrictions on users and individual locations. According to Hedera’s FAQ, users from nine regions will not be able to fully access the platform: Belarus, Crimea, Cuba, Iran, Japan, North Korea, Syria, Sudan, and Ukraine.
All Comments