Hedera hashgraph is a type of distributed ledger technology that stands out from the other blockchain technologies because it has no mining, doesn’t use proof-of-work or proof-of-authorty protocols, and instead relies on an asynchronous Byzantine Fault Tolerant agreement protocol.
In this blog post, we will answer all your questions about what hedera hashgraph is. If you’ve been thinking about investing in Hedera Hashgraph, but don’t know what it is or how it works, this article will give you the information to decide if it’s right for you.
What is Hedera Hashgraph?
Hedera hashgraph is a public distributed ledger technology that boasts of high throughput, fairness in transaction order, security, and reliability. It uses an asynchronous Byzantine Fault Tolerant (aBFT) algorithm to reach consensus without proof-of-work or proof-of-stake protocols.
Hedera is different from other networks because of its amazing features, with faster processing speeds and more energy efficiency. It also has an enterprise governing body that owns and operates the network. This means that even if there are no mining fees, transactions will still be processed quickly. The public ledger stores nodes on mainnet nodes which are currently run by the Hedera Governing Council (which includes companies such as Google, IBM, Boeing, Deutsche Telekom, LG, and more.). In the future, anyone can run these nodes without informing Hedera.
Hedera also offers integrations for blockchain frameworks, such as Hyperledger Fabric and R3 Corda. This allows private applications to offer public verifiability and decentralized ordering of transactions.
Hedera is built around three main features that are important to cryptocurrency holders. They are applications & smart contracts, global governance, and network stability. As you read more about what they are, you’ll see why they might make Hedera Hashgraph a good investment for you.
- Applications and smart contracts allow developers to build trust into their applications using Hedera hashgraph’s network services.
- The global governance of Hedera ensures the highest security standard to prevent malicious attacks, as well as offering fast transaction verification.
- Network stability is maintained by the hedera hashgraph’s underlying technology and global governing body. This prevents attacks on the network and keeps it running smoothly.
- Decentralization — There is no central authority or middleman required for transactions to take place.
- Low latency — Transactions are confirmed in less than one second.
- No mining required — Unlike bitcoin and most other blockchain technologies, there is no need for mining, which greatly reduces the carbon footprint of the network.
- No fees — Transaction costs are negligible, and there is no need for gas or other tokens to pay for transactions.
Hashgraph does not have a “chain of blocks.” Hashgraph technology combines two algorithms to maximize its overall efficiency. They are as follows:
1. Gossip about Gossip
This is a protocol that allows nodes to gossip (share information) with each other in a decentralized manner. When a node receives new information, it shares it with all of its neighbors, and they share it with their neighbors, and so on. This process continues until the entire network has been informed.
It’s a tree-like structure in which the leaves are seen as being linked to other leaves. What makes Hashgraph Technology so unique and fantastic at the same time is the way each node connects with one another.
2. Virtual Voting
When compared to “Gossip about Gossip,” virtual voting works differently. To decide the sequence of the transactions, virtual voting is used to establish a consensus. Virtual voting does not begin until a particular number of transactions have been processed by nodes. Let’s imagine there are 15 events before the virtual voting begins.
When the virtual voting begins, each participant searches for the event that best matches the network. It’s referred to as a “famous witness.” To put it another way, the picked events include information about previous events that the nodes have recorded. If the new event matches the previous one, it receives a yes vote; otherwise, it receives a no vote. As a result, the incident with the most votes becomes the “famous witness” for that specific round. The transaction orders are then provided by the event.
Virtual voting can be done in 3 steps:
- Divide Rounds
- Decide Fame
- Find Order
Hedera (HBAR): The Native Coin
The Hedera network’s native cryptocurrency, HBAR, has a fixed supply of 50 billion hbars. It’s used to pay for transaction fees, in-app payments, and micropayments on the network. Because Hedera is a proof-of-stake network, it’s also utilized for network security.
HBAR can be used for the following:
- To pay for network service fees
- To make payments and micropayments
- To reward nodes for securing the network
In order to run a node that creates and validates transactions on the hashgraph network, HBAR tokens are required. This is because the hashgraph algorithm requires a lot of computing power, and nodes need to be rewarded for their services.
Hedera (HBAR) Current Price
Hashgraph vs Blockchain
Hedera Hashgraph is a public distributed ledger with an underlying consensus mechanism (Hashgraph). It is different from any other public distributed ledger blockchain as it has faster transactions and confirmation.
Consensus is the process of reaching an agreement among nodes on the validity of a transaction. Blockchain is a type of consensus algorithm, which is linear and sequential. For example, a blockchain requires several minutes of confirmation, and blocks on typical networks like Bitcoin and Ethereum only reach 7 transactions per second.
Hedera Hashgraph is a more efficient way to achieve consensus as it’s fast, fair, secure, and decentralized. It has 10x the throughput than typical blockchains. Hedera offers 3-5 second transactions with finality and can reach 10,000 transactions per second.
Hashgraph Consensus Service
Hedera Hashgraph uses the Hashgraph consensus mechanism to ensure that all computers in its distributed network agree on its transaction history.
There are two types of nodes, both of these types of nodes work together to provide a decentralized system.
- Consensus node which determines transaction ordering and history
- Mirror node which relays this information to other stakeholders throughout these networks.
Traditional blockchains achieve consensus differently in that they use users who propose blocks to add them to the chain in a market competition open to anyone. Hedera Hashgraph claims that it offers advantages over public and private blockchain networks by combining the advantages of both models.
Hedera Decentralized Governance
it is important to know that Hedera Hashgraph has a governing body in place. The Hedera Governing Council, which includes Google, IBM, and Boeing, and over 40 others that manage the software for the network and ensures funds are allocated correctly.
The council’s role is to safeguard hedera hashgraph’s legal status in various jurisdictions while also voting on changes to the platform or network decisions. Members have an equal vote until they have completed two consecutive three-year maximum terms on the council.
Hedera Token Service
The Hedera Token Service (HTS) enables applications to mint, configure and manage tokens on Hedera, without having to write and deploy smart contracts. Tokens created with the HTS can represent anything from stablecoins to in-game reward coins. It also has multi-sig capabilities and can perform native atomic swaps on the network.
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Use Cases Of Hedera Hashgraph Network
There are several use cases for the Hedera Hashgraph network. Perhaps the most well-known is its ability to handle payments. The network can settle transactions in seconds, as compared to the VISA network which can take days. This makes it an ideal option for finance and commerce. Additionally, the network is cost-effective, with transactions costing less than $1. If you’re looking for a fast, affordable, and secure way to handle payments, the Hedera Hashgraph network is a great choice. With its ability to settle transactions in seconds.
2. Fraud Prevention
As a cryptocurrency holder, you understand that fraudulent activities are always a possibility. However, with the Hedera Hashgraph platform, you can reduce those risks and costs associated with fraud. The platform provides businesses with the tools to handle credentials securely, while also giving all participants a real-time view of transactions to detect any fraudulent behavior. In addition, the Hedera network ensures trust and transparency among all stakeholders involved in digital transactions.
3. Smart Contract and Decentralized Applications (dApps)
You can use the Hedera platform to develop smart contracts with Solidity. This allows you to do atomic swaps, create assets, and deploy completely new applications.
The Hedera Hashgraph network is also perfect for developing decentralized applications. These types of applications are becoming more and more popular, as they offer a higher level of security and transparency than traditional applications. With the Hedera platform, you can build decentralized applications that are fair, secure, and efficient.
4. Permissioned blockchains
The Hedera network has been able to provide answers for those who need a blockchain for permissioned networks, various features such as immutability and verifiability present. It also provides auditability into the public ledger, the network won’t slow down your permissioned blockchains and will achieve thousands of transactions per second with finality in seconds.
5. Cross-Chain Interoperability
Another major benefit of the Hedera Hashgraph platform is its cross-chain interoperability. The decentralized ledger of the network keeps all transactions secure and transparent, while also allowing for interactions between multiple blockchains. Moreover, businesses are able to leverage the speed, scalability, and security of Hedera to their advantage.