Hedera is one of those developments in crypto where the more one learns about it, the more it seems like the next big thing. Curious newbies can go down an extensive rabbit hole, starting with the articles on Hedera’s own site and eventually graduating to the dozens of YouTube videos featuring its charismatic and cerebral inventor, Dr. Leemon Baird.
Since MoonPay now offers the purchase of Hedera’s native cryptocurrency, HBAR, we’ve put together a brief overview of the network so users can make an informed decision about whether it’s the right buy.
How is Hedera different from other blockchains?
Technically, Hedera isn’t a blockchain — it’s another form of distributed ledger technology called a hashgraph.
So what is a hashgraph? Like a blockchain, a hashgraph is a consensus algorithm whereby a community of users agree on the order of completed transactions. Unlike a blockchain, however, it works slightly differently.
With blockchain, confirmed blocks form a single chain, so if two blocks are created at the same time, one block will be discarded. Hashgraph, on the other hand, is 100% efficient in that the equivalent of a block is never tossed away—it’s always used to achieve consensus. With hashgraph, all the transaction branches are stitched together into a unified whole (see illustration), resulting in fewer wasted cycles for the network's nodes.
Computer science enthusiasts will also appreciate the fact that the hashgraph algorithm is “Asynchronous Byzantine Fault Tolerant”, a status derived from the Byzantine General’s Problem. The benefit of being ABFT is that Hedera is able to achieve finality. This means that transactions are final in seconds without the need to wait for additional block confirmations in a probabilistic consensus like blockchain. More can be read about that here, but suffice it to say that these and other major technical differences are what distinguish hashgraphs from blockchains.
Because of these unique properties, Hedera, currently the only distributed ledger technology based on the hashgraph algorithm, brands itself as a “third generation public ledger” (first and second generations are Bitcoin and Ethereum, respectively). Perhaps the network’s most standout feature is the use of what it calls the "gossip about gossip" protocol.
What is the “gossip about gossip” protocol?
The hashgraph algorithm works by spreading what Hedera’s inventor, Dr. Leemon Baird, calls “gossip about gossip”.
So what is gossip?
“Gossip just means when computers randomly call each other,” says Baird. He explains that any given node in a network can randomly communicate with another node all the information the latter doesn’t already know. The reason this method is so popular in computer science, he says, is because it’s incredibly fast and efficient.
“How fast does a juicy rumour spread through the grapevine in a typical office?” he says. “That’s the gossip protocol.”
Gossip about gossip essentially means that the information being gossiped about is the gossip itself. For example, whereas gossip is telling someone information you know, gossip about gossip is when that information is the fact that you talked to someone else — information that can extend back to the very first conversation (or in Hedera’s case, the very first transaction).
One would assume that it would take a lot of time and energy for computers to share so much information with one another, but according to Baird “gossip about gossip” is incredibly energy efficient. In his 2016 paper introducing the concept, he writes that the protocol “uses very little bandwidth overhead beyond simply gossiping the transactions alone.” Each message just has to remember two other messages using cryptographic hashes, meaning that when a message is sent, all that’s being sent is two hashes. Add to the mix a list of transactions, and there’s a working protocol to transact HBAR, Hedera’s native token.
Who created Hedera?
As mentioned, Hedera was founded by the inventor of the hashgraph, computer scientist Dr. Leemon Baird. Baird has over 20 years of experience running successful start-ups, has been a senior scientist in several labs, and spent time as a Professor of Computer Science at the Air Force Academy. He earned his PhD in Computer Science from Carnegie Mellon University, widely regarded as one of the top universities in the field, and is co-founder of Swirlds, a successful software company that has patents for the hashgraph.
While Baird remains the face of Hedera, the network is also managed by a governing council of organisations that have invested in it, including Boeing, Google, IBM, and The London School of Economics.
The more Hedera attracts the attention of such reputable institutions, the more it boosts its reputation as a trusted network. To give an idea of just how well regarded it is, England’s National Health Service recently used it to keep records of its COVID vaccines. For one of the world’s leading health services to rely on Hedera in such turbulent times as these is a major vote of confidence.
Hedera quick facts
- 50bn total supply of HBAR
- 10,000 transactions per second
- 3-5 second transaction confirmations
- $0.0001 average consensus fee
- 3,349,506 transactions per day
Where to buy and store HBAR
Hedera’s native token HBAR is used to power the network’s decentralized applications and, like other proof-of-stake currencies, to reach consensus on transactions.