Introducing Hedera and HBAR
| Key Takeaways: |
| — Speed and scalability are two of the limitations faced by blockchain – and this is due to how transactions are processed. — Hedera is a distributed public network capable of performing the same tasks as blockchain, and doing so more efficiently. But there’s one key difference – Hedera is not a blockchain. — Hedera network uses Hashgraph, an alternative system to blockchain that achieves autonomy and security via the innovative Hashgraph consensus algorithm. — HBAR, the native coin of Hedera network, has just been integrated within Ledger Live – the first non-blockchain coin to do so within our ecosystem. — You can now secure and manage your HBAR seamlessly from your Ledger Nano, using Ledger Live and MyHBARWallet. |
Hedera is the distributed ledger that doesn’t use a blockchain – and it’s just been supported within Ledger Live! Interested? You should be. Let’s take a deep dive into Hedera and its currency, HBAR.
You might think we’re blockchain junkies here at Ledger – and you’re not wrong. But block or no block, we always have a close eye on the wider crypto space. Today, we’re going to talk about one of the most innovative projects in that ecosystem, and it’s not a blockchain.
When you strip back all the jargon, blockchain is just a distributed, digital ledger that enables transactions. What if we could achieve that same thing – faster, and cheaper and just as securely – in another way? We have news for you – this is the core value proposition of rising crypto platform, Hedera. And we are glad to announce that Its native coin HBAR has just been integrated within Ledger Live – the first non-blockchain cryptocurrency to join our platform.
So what exactly is hashgraph consensus, why is it so special — and why should you care about it anyway? Buckle up, because today we’re taking a closer look at the Hedera network that uses as totally unique consensus mechanism, and what our recent integration of its native HBAR cryptocurrency means for you.
Understanding Blockchain
Blockchain is probably the most important technological innovation of our generation: it single-handedly disrupted the centralized financial system, not to mention bringing an entire ecosystem of new options and services to bear for people like you and me. But despite its audacious entrance, blockchain is not without its faults.
A Slow-Moving Giant
No matter which network you’re using, the mechanics of blockchain make it cumbersome, slow and often expensive to use. This is largely down to the way it processes transactions.
Blockchains operate by putting bundles of incoming data into blocks, and adding those blocks to the official “chain” when they’ve been verified. Hence the name blockchain. But this makes for slow transaction times, as each block waits to be confirmed by a majority of nodes, before being added.
Favours High Bidders
Beyond that, it also enables certain transactions to be prioritised if the user is willing to pay higher fees – this quickly pushes up the cost of the whole network, and leads to favourable treatment for those paying more.
So in short, despite performing well as a secure, distributed ledger, the structure of blockchain means it suffers from inefficiencies and flaws. This has led developers to search not just for improvements and iterations, but for entirely different systems that might offer an alternative. Enter Hedera with Hashgraph consensus.
Introducing Hedera: Blockchain is out, Hashgraph is In!
Hashgraph is an alternative system to blockchain. It takes the task of managing a distributed ledger securely, and tackles it in a completely different way: the Hashgraph system reaches consensus extremely efficiently, using something called gossip-about-gossip protocol, and virtual voting. Let’s take a look at both of those now.
How does gossip about gossip and virtual voting work?
In blockchain, nodes need to agree on the validity of incoming transactions, and they do this by checking new blocks against the networks’s transaction history – that’s no mean feat, considering the history is constantly growing.
But Hashgraph adopts a different approach. For each new transaction on Hedera, any node in the network can receive the incoming information directly — from there, it ‘gossips’ the transaction to another node, who then sends it to another, and so forth. This process goes on for every transaction — coming to consensus once ⅔ of the network nodes have received this information.
Gossip-about-Gossip
The history of how these events are related to each other through their parent hashes is called gossip about gossip. This history expresses itself as a type of directed acyclic graph (DAG), a graph of hashes, or a hashgraph. The hashgraph records the history of how members communicated. All members keep a local copy of the hashgraph which continues to update as members sync with one another.
Virtual Voting
The hashgraph algorithm does not require any votes to be sent across the network to calculate the votes of each member. Members can calculate every other member’s votes by internally looking at each of their copies of the hashgraph and applying the virtual voting algorithm.
You can learn more technical details about hashgraph by watching this presentation by Hedera Co-Founder and the inventor of hashgraph consensus, Dr. Leemon Baird.
What does Hedera offer developers and retail users?
So with all this said and done, what does this mean for you, the end user?
Hedera’s main technical differentiation for users is faster, cheaper transactions. To give an idea of scale, the Bitcoin blockchain can currently process around 7 transactions per second with finality on those transactions in 30+ minutes. Hedera, on the other hand, has a capacity of 10,000 transactions per second (throttled) and reaches finality of consensus on those transactions in 3-5 seconds. This means the network’s potential to be scaled and offer real-time application experiences is far greater than many blockchains.
In addition, its governing model is unique — the network is open source, and built by members of the developer community through core contributors implementing Hedera Improvement Proposals (HIPs) but governed by a fully decentralized body of up to 39 global organizations. These organizations are called the Hedera Governing Council and includes web3 projects, such as Chainlink Labs, enterprise organizations, such as Google, LG Electronics and Shinhan Bank, and universities, such as University College London.
Hedera’s Ecosystem & Native Cryptocurrency HBAR
Hedera serves as the layer 1 network for a powerful ecosystem of NFT, DeFi, Privacy, and Sustainability-focused applications. The network supports optimized EVM-based smart contracts, written in Solidity or Vyper, which can be built and deployed to create decentralized applications.
Hedera Network Services for Developers
Hedera also offers services native to the network: the Token and Consensus services, which are seamlessly integrated into Smart Contracts for full programmability. The Token service enables applications and users to mint fungible and non-fungible tokens that map to interoperable ERC-20, 731, & 1155 standards; it also lets you perform configuration, like royalty fees, in just a few lines of code. The Consensus Service lets you stream data quickly and inexpensively to the ledger, and includes native consensus timestamps for every transaction, to support auditing, supply chain, and IoT applications that require high-throughput use cases with fair ordering.
HBAR: Fuel of the Hedera Network
Hedera offers similar utility to Ethereum, with more advanced functionalities at a lower operational cost, with HBAR serving as the fuel that powers the ecosystem — users pay transaction fees that are low and fixed, based in USD, and paid in $HBAR. See the price of the HBAR here.
And because Hedera is a proof-of-stake network, HBAR holders can stake their HBAR to network nodes to contribute to the network’s security and earn rewards.
Ledger Integrates HBAR
If you like the sound of what Hedera is doing, and want to get your hands on some HBAR, we have great news for you – it has just been supported on Ledger Live, meaning you can buy (through MoonPay) sell and manage HBAR seamlessly with Hedera wallet, from the security of your Ledger Nano.
How do you do that? Simply create an account in MyHbarWallet and import it into Ledger Live; from there, you’ll be able to manage you HBAR with ease.
Distributed ledger technology has already disrupted the way we manage value, relationships and information, and even now, that technology is constantly evolving to bring you new options. As the space grows, Ledger is here to keep you informed about the most important new arrivals and what they’re contributing – and of course, secure your crypto assets as you use those platforms yourself.
So stay informed and keep on learning! When it comes to getting the most out of the crypto space, knowledge is power – and we’re here to keep you informed.
Knowledge is Power.
If all this talk of hashgraph has left your brain feeling fried, we have just the tonic for you – let’s take a step back and talk blockchain basics, before you continue your crypto exploration. Thanks, School of Block!