Hedera: A Public Hashgraph Network and Governing Council

What is Hedera

Friends, imagine the internet we use every day as a massive information superhighway. Blockchain technology is like a newly built, safer, and more transparent dedicated lane on that highway. Hedera (HBAR for short) is one such special “dedicated lane,” but it’s a bit different from the “blockchain” we often hear about—it uses a unique technology called Hashgraph.

You can think of Hedera as a “public infrastructure” that provides trust and efficiency for the digital world. It’s not a system controlled by a few people, but one maintained and managed by many well-known enterprises worldwide. Its goal is to enable everyone to quickly, securely, and fairly conduct various digital activities on this platform, such as sending digital currency, creating digital assets (like digital certificates, game items, etc.), running smart contracts (self-executing digital agreements), and storing files.

Simply put, Hedera is like a high-performance digital public ledger. It doesn’t pursue complete anonymity and anti-establishment ideals like Bitcoin, but instead aims to provide the stability, security, and high efficiency required for enterprise-level applications while maintaining decentralization.

Project Vision and Value Proposition

Hedera has an ambitious vision: “to build a trustworthy, secure, and empowering digital future for everyone.” Its mission is to create a trusted and secure online world where everyone can confidently work, play, trade, and socialize, enjoying safety and privacy within digital communities.

Hedera aims to address several core issues faced by current distributed ledger technologies (DLT, such as blockchain) in widespread adoption:

• Insufficient performance: Many traditional blockchains process transactions slowly and have high fees.
• Security challenges: Although blockchain is known for security, there are still risks in certain extreme cases.
• Governance difficulties: How can a decentralized system make effective decisions without being controlled by a few?
• Lack of stability: Some projects may face technical or legal instability.
• Compliance issues: How to meet legal and regulatory requirements in an increasingly strict global environment?

To solve these problems, Hedera stands out. It doesn’t use the traditional “chain” structure but instead adopts the unique Hashgraph technology, which gives it significant advantages in speed, fairness, and security. In addition, Hedera’s governance model is distinctive: it is jointly managed by a council of globally renowned enterprises, providing a stronger foundation of trust and stability for enterprise-level applications and making compliance easier.

Technical Features

The most striking aspect of Hedera is its core technology: instead of traditional blockchain, it uses the Hashgraph consensus algorithm.

Hashgraph Consensus Algorithm

You can imagine traditional blockchain as a train, with each carriage (block) connected in sequence, moving forward one by one. Hashgraph, on the other hand, is more like a “gossip network”:

• “Gossip about Gossip”: Every node (participant) in the network randomly shares the transaction information it knows, as well as information it has heard from others, with other random nodes. Like people chatting, information spreads rapidly throughout the network.
• “Virtual Voting”: Once information has spread sufficiently, each node can independently, without actual voting, use algorithms to “infer” how all nodes would vote, thus reaching consensus on the order of transactions.

This mechanism brings several key advantages:

• High speed and efficiency: Hedera can process tens of thousands of transactions per second (10,000+ TPS), with extremely short confirmation times—almost instant finality. This is much faster than many traditional blockchains.
• Fairness: The Hashgraph algorithm ensures that the order of transactions is fair, and no one can manipulate the sequence—like a fair queuing system.
• Security: It achieves the “gold standard” in distributed system security—asynchronous Byzantine Fault Tolerance (aBFT). This means that even if some nodes in the network are malicious or faulty, the system can still operate normally and reach consensus, without being compromised by attackers.
• Low energy consumption: Unlike blockchains like Bitcoin that require massive computational mining, Hedera’s consensus mechanism does not consume huge amounts of energy, making it more environmentally friendly.

Services Provided by Hedera

Hedera is not just a digital currency network—it offers a variety of services, like a multifunctional digital platform:

• Hedera Consensus Service (HCS): Think of it as a “decentralized message bus,” allowing any application or consortium chain to use the Hedera network to record events, messages, or data, with a trusted timestamp and fair ordering.
• Hedera Token Service (HTS): Enables users to easily create and manage their own digital tokens on the Hedera network, whether fungible tokens (like regular currency) or non-fungible tokens (NFTs, like digital art).
• Hedera Smart Contract Service (HSCS): Supports smart contracts written in Solidity, meaning developers familiar with Ethereum can more easily build applications on Hedera.
• Hedera File Service (HFS): Provides decentralized file storage, allowing files to be securely stored on a distributed network.

It’s worth noting that Hashgraph technology was originally patented, but the Hedera council has voted to purchase the patent rights and open source it, helping to promote broader adoption and ecosystem development.

Tokenomics

The “fuel” of the Hedera network is its native cryptocurrency, called HBAR.

Token Basics

• Token symbol: HBAR
• Total supply: HBAR has a fixed total supply, capped at 50 billion. This means no new HBAR will be minted indefinitely, ensuring scarcity.
• Issuance mechanism and circulation: HBAR is released according to a preset schedule, gradually unlocked rather than entering circulation all at once. Hedera regularly publishes reports detailing HBAR unlocks. As of 2024, about 42 billion HBAR are in circulation.

Token Utility

HBAR plays several important roles in the Hedera network:

• Paying network service fees: Just like you pay for internet access, any operation on the Hedera network—sending transactions, running smart contracts, storing files, or using token services—requires a small amount of HBAR as a fee. These fees are typically very low and predictable.
• Network security and staking: HBAR can also be staked, meaning you lock your HBAR in the network to help maintain its security and consensus. By staking, you contribute to network stability and may earn rewards.

Token Allocation and Unlocking

HBAR’s allocation is carefully designed: a portion is used to incentivize early contributors, including founders and core team members, whose tokens are unlocked in stages to align their interests with the project’s long-term development. Another portion is reserved for community and ecosystem funding, as well as future staking reserves.

Team, Governance, and Funding

Core Team

Hedera’s creation owes much to two key figures:

• Dr. Leemon Baird: Inventor of the Hashgraph consensus algorithm, co-founder and Chief Scientist of Hedera.
• Mance Harmon: The other co-founder of Hedera.

In addition, Hedera has a management team of experienced professionals responsible for daily operations and strategic development.

Governance Mechanism

Hedera’s governance model is unique, adopting a Hedera Governing Council approach.

• Council members: The council consists of leading global enterprises and organizations from various industries and regions, such as Google Cloud, IBM, Deutsche Telekom, etc.
• Decision-making: Each council member has equal voting rights, and their terms are limited, helping prevent any single entity from having excessive control and ensuring diversity and transparency in decision-making.
• Scope of responsibilities: The council is responsible for key decisions regarding the Hedera network, including software updates, network pricing, financial management, and ensuring compliance with evolving regulations.
• Path to decentralization: Hedera is currently a permissioned network, meaning only council members can run nodes. However, the project has a clear plan to gradually transition to permissionless participation, allowing more people to run nodes and achieve broader decentralization. This model aims to balance decentralization with the stability and compliance required for enterprise applications.

Funding

Hedera Foundation is a key driver of Hedera’s ecosystem development. It supports various projects and applications built on the Hedera network through funding, technical support, and community engagement. The foundation’s goal is to raise Hedera’s profile, accelerate innovation, and promote widespread adoption of its technology.

Roadmap

Since its mainnet launch in 2019, Hedera has been continuously evolving. Its roadmap outlines an ambitious future, aiming to enhance network functionality and expand its application scope:

Historical Milestones

• 2019: Hedera mainnet officially launched, marking the first public distributed ledger application of Hashgraph technology.
• 2020: Well-known enterprises like Google Cloud joined the Hedera council, further boosting network credibility.
• 2022: The Hedera council voted to purchase the Hashgraph algorithm patent and open source it, promoting openness and community participation.

Future Key Plans

Hedera’s future plans focus on the following areas:

• Smart Contracts 2.0 and EVM Compatibility: Plans to launch more powerful smart contract features and achieve full compatibility with the Ethereum Virtual Machine (EVM), attracting more Ethereum-savvy developers to build on Hedera.
• Advanced feature development: Including dynamic NFTs (digital assets that change based on conditions), paying gas fees with stablecoins, state proofs (for verifying off-chain data), and sharding technology (to improve network scalability).
• Developer ecosystem enhancement: Ongoing improvements to developer tools and services to make building and deploying on Hedera easier.
• AI integration: Collaborating with tech giants like Nvidia and Intel to develop “verifiable computation” solutions, combining blockchain with AI for enterprise-grade AI applications.
• Decentralized oracle integration: Working with projects like Chainlink to integrate decentralized oracle solutions, providing secure and reliable off-chain data for the Hedera network.
• Guardian 3.0 update: Launching updates aimed at enhancing enterprise application resilience and efficiency.
• Gradual permissionless node rollout: Following the established plan to open the network, allowing more non-council members to run nodes for broader decentralization.
• Transparent grant management platform: Planning to launch a platform in Q2 2025 for the community to directly participate in project funding, increasing transparency and collaboration.

Common Risk Reminders

Any emerging technology and investment comes with risks, and Hedera is no exception. When learning about this project, it’s important to stay objective and cautious. Here are some common risk reminders:

Technical and Security Risks

• Smart contract vulnerabilities: Although Hedera’s underlying technology is secure, smart contracts deployed on the network may still be exploited if the code is flawed, leading to fund losses, such as reentrancy or flash loan attacks.
• Network attacks: While the Hashgraph algorithm provides strong asynchronous Byzantine fault tolerance, any network may face various attacks, such as distributed denial-of-service (DDoS), which could affect network availability.

Economic Risks

• HBAR token price volatility: The crypto market is known for its volatility, and HBAR’s price may fluctuate sharply due to market sentiment, macroeconomic factors, regulatory changes, and project developments.
• Token unlock and circulation impact: HBAR’s unlock schedule may increase market supply at certain times. If demand doesn’t grow in sync, it could put downward pressure on the token price.
• Enterprise adoption and token demand decoupling: Hedera aims to attract enterprise applications, but enterprises using Hedera’s technical services may not need to hold large amounts of HBAR, potentially limiting demand growth and affecting long-term value.

Compliance and Operational Risks

• Regulatory uncertainty: Global regulations on cryptocurrencies and distributed ledger technology are still evolving. Any new laws or regulations could significantly impact Hedera’s operations, HBAR’s status, and the market.
• Centralization controversy in governance model: Although the Hedera council aims to balance decentralization and enterprise needs, its current permissioned nodes and council of specific enterprises may be seen by some as insufficiently decentralized, affecting acceptance in the broader crypto community.
• Market competition and adoption rate: The distributed ledger technology field is highly competitive, with many projects vying for market share. Whether Hedera can achieve large-scale adoption depends on its technical advantages, ecosystem development, and market strategy.

Remember, the above is not investment advice, but an objective reminder of potential risks. Always conduct thorough personal research and risk assessment before making any decisions.

Verification Checklist

• Block explorer: You can check HBAR token contract addresses, transaction records, account balances, etc. via Hedera’s official block explorers (such as HashScan or Hedera Explorer).
• GitHub activity: Hedera’s GitHub repositories (such as https://github.com/hashgraph/hedera-docs) show code updates and development activity. You can review commit frequency, contributor count, and issue resolution to assess project progress.

Project Summary

Hedera (HBAR) is a public distributed ledger platform based on the unique Hashgraph consensus algorithm, differing from traditional blockchains. Hedera is committed to providing a high-performance, highly secure, low-cost, and fair digital infrastructure for enterprise applications, aiming to solve challenges in performance, security, governance, stability, and compliance faced by current distributed ledger technologies.

Its core Hashgraph technology achieves asynchronous Byzantine fault tolerance (aBFT) security through “gossip about gossip” and “virtual voting” mechanisms, offering tens of thousands of transactions per second and instant finality. Hedera also provides a range of services, including consensus, token, smart contract, and file services, and supports EVM compatibility for developer convenience.

In terms of governance, Hedera is jointly managed by a council of globally renowned enterprises, aiming to balance decentralization with the stability and compliance required for enterprise applications, and plans to gradually transition to a more open permissionless model. The HBAR token serves as network fuel, used for service fees and staking to maintain network security, with a fixed total supply of 50 billion.

Hedera’s roadmap shows ongoing investment in smart contracts, AI integration, developer tools, and decentralization. However, investors should also be aware of potential risks, including token price volatility, smart contract vulnerabilities, regulatory uncertainty, and centralization controversies in governance.

Overall, Hedera offers a distributed ledger solution distinct from traditional blockchains, especially suitable for scenarios demanding high performance, security, and enterprise-grade stability. Its innovations in technology and governance are noteworthy, but like any crypto project, its future development and market performance remain uncertain.

Please note, the above information is an introduction to the Hedera project and does not constitute investment advice. Always conduct comprehensive personal research and risk assessment before making any investment decisions.