Hedera is an enterprise cryptocurrency
The Hedera network: a brief description
Hedera Hashgraph is a network for developing and hosting decentralized services and applications based on a decentralized registry. In doing so, the network relies on several innovative technologies that should give it a severe efficiency advantage.
Hedera uses a directed acyclic graph (DAG) rather than the blockchain technology familiar with cryptocurrency. Blocks with transactions are not recorded in strict chronological order in the ledger but remain mathematically connected to each other.
DAG technology allows network nodes to perform calculations in parallel, adding new blocks without waiting to complete the work of "colleagues". This significantly increases the network throughput and its energy efficiency, as nodes do not perform "empty" calculations — the duplication of calculations is minimized.
A modified Proof-of-Stake algorithm is used as a consensus algorithm. Network nodes simply vote for certain blocks in a "traditional" PoS implementation. In Hedera, nodes use mathematical algorithms to determine which block their "neighbours" should vote for. This "virtual voting" protects the network from rule breakers — the calculations of honest nodes "parry" the efforts of malicious actors. At the same time, all the advantages of Proof-of-Stake, such as the absence of the need for significant computing power and energy costs for their work, as well as stimulating demand for the currency of the network, remain in force.
Hedera's consensus algorithm also implements asynchronous resilience to the "Byzantine Generals' Fault" (ABFT), similar to that used in the Solana and Cosmos networks. Even if a third of Hedera nodes collectively act in violation of the rules, network resilience will still be ensured.
The final technology aimed at increasing network capacity is the Gossip protocol. Information is distributed in the Hedera network from one node to its neighbours (with minimal ping) instead of being simultaneously broadcast across the entire network. This, again, allows the data exchange to be distributed across multiple independent streams.
As a result, Hedera Hashgraph provides high-speed and cheap transaction processing. The blockchain is finalized on average every 3.6 seconds, and transaction processing costs $0.0001 and 0.00017 kWh of energy.
Of course, this intensity of new technology has required serious development resources. But if you look at the composition of the network's governing council, the Hedera Governing Council, it is evident that the project has no problems with resources. The council includes several Fortune 500 companies, including Boeing, Dell, IBM and Ubisoft. These companies use the network to develop and host their products and are, therefore, as keen as possible to optimize the cost of using Hedera.
But it would be naive to assume that the network is devoid of drawbacks.
Hedera is a decentralized network "not for everyone"
Hedera Hashgraph is a fully corporate network. The developers explicitly talk about limiting user access to the functionality and, most importantly, to the system's internal processes. Of course, calling it "responsible management".
For ordinary users, only extremely limited functionality is available: execution of transactions and part of the capabilities of decentralized applications in the network. But even such "simple" wallets in the system are not anonymous. Authorisation in the network occurs either through one of the intermediary exchanges or on the Hedera platform with KYC.
Full access to Hedera functionality requires user verification by the network's governing board. After that, it becomes available:
- Starting a node
- Writing and running smart contracts and applications
- Issuing tokens
- Working with the Hedera file service.
Of course, the Hedera code is completely closed, and the developers have no plans to disclose it.
However, this approach has a plus — problems with regulators are doubtful for Hedera. Firstly, the project was initially created with a priority to fulfil their requirements. Secondly, when such powerful corporations are behind a project, they enjoy specific preferences from regulators.
Is it worth buying cryptocurrency Hedera (HBAR)?
Hedera HBAR cryptocurrency is used for settlements in the Hedera Hashgraph network and payment for the services of applications deployed in it. It is also frozen in node wallets to ensure the operation of the Proof-of-Stake consensus algorithm.
The exchange rate dynamics of HBAR suggest that this coin should instead be considered a helpful asset for use within the Hedera network rather than as a promising investment.
For over a year now, the HBAR exchange rate has been hovering around $0.05 per coin, which is close to the coin's price when it was released to the market.
Yes, in the coin's history, there was also a sharp rise in the rate — up to $0.45 in autumn 2021. However, after the fall and stabilization of the rate, there are no fundamental reasons for growth in the foreseeable future.
So, it is quite possible to use HBAR in the Hedera network — the cryptocurrency still does not depreciate, but the opportunities for earning on it are limited.
