The primary focus of the HBAR token is to sustain the Hedera Hashgraph ecosystem. In Latin, hedera means "ivy". It is a third-generation public network positioning itself as the next evolutionary step for Bitcoin and Ethereum.
Hedera – for inner circle
The initial coin offering (ICO) for the Hedera (HBAR) token took place on August 16, 2018, raising $100 million from institutional investors. These funds were used to create the Hedera Hashgraph, a public network based on distributed ledger technology (DLT) that serves as a platform for decentralized services and applications.
Hedera Hashgraph targets the corporate sector, with limited access for ordinary crypto enthusiasts. To gain full access, users must create a personal account and go through verification. Once verified, they are able to issue tokens, create smart contracts, and perform file service operations, etc.
The Hedera Hashgraph platform is based on the Hashgraph protocol developed by Leemon Baird. The Hashgraph technology is patented by Swirlds, a company owned by Baird and his business partner, Mance Harmon. The pilot project for Hedera Hashgraph was a joint corporate network for the US National Credit Union Association (CUNA) and the Mountain West Credit Union Association (MWCUA), which was implemented before the ICO even took place.
Hedera Hashgraph is now governed by the Hedera Governing Council, a board consisting of representatives from 26 companies including Boeing, IBM, Japan's largest brokerage firm Nomura Holdings, and others. They ensure the integrity of the codebase and prevent hard forks. The Council also sets the rules for onboarding new platform users, manages the project's finances, and is responsible for its technical development.
Hedera exchange rate fluctuations in 2019-2023.
Source: Coinbase
Hbar technology
The Hashgraph technology is a specific instance of the Directed Acyclic Graph (DAG). DAG serves as an alternative to the blockchain, where blocks are chained together one after the other. In contrast, DAG records transactions as a grid without a fixed sequence.
Transactions in Hashgraph are not processed sequentially, but simultaneously. According to the Hashgraph developers, this results in:
- High transaction speed (over 10,000 transactions per second, as a result of the type of node interaction);
- High protection against DDoS attacks;
- Low fees (fractions of a cent);
- High energy efficiency (Hedera consumes 0.00017 kWh, which is hundreds of thousands of times less than the energy consumption of the BTC blockchain).
Using Hedera's code by outside players in the crypto market is a surefire way to end up in a legal tussle. The project's strategy puts a stop to network cloning, setting it apart from blockchain, where anyone can use and change the code.
In addition to Hashgraph, Hedera also uses ABFT (an implementation of the Byzantine Fault Tolerance consensus algorithm), the Gossip protocol, and a special variation of Proof-of-Stake.
Hedera and the World of Investors: A Look at Tokenomics
Hedera Hashgraph counts among its investors such big names as Digital Currency Group (DCG), the oldest venture capital firm in China Fenbushi Digital (whose partner used to be Vitalik Buterin until 2018), and Multicoin Capital. The latter led the funding round for Solana Labs and had an unsuccessful investment in FTX. DCG is also an investor in the Coinbase and Kraken platforms.
The maximum supply of Hedera Hashgraph tokens is 50 billion, with more than half, or 26 billion, in circulation as of February 2023. Each subsequent wave of HBAR is unlocked on a monthly basis. Both of Hedera Hashgraph's founders, Berd and Harmon, hold 2 billion HBAR each.
Theoretically, you could trade the HBAR token like any other cryptocurrency. However, its primary purpose is to serve as the internal currency of the Hedera Hashgraph project. Business clients are not able to access the various features of the platform without having a sufficient balance of HBAR in their account. In other words, you can't enter the Hedera Hashgraph party without bringing some HBAR to the table.
In January and February 2023, the HBAR token's value increased from around $0.04 to $0.09. In the second week of February 2023, the market cap of the token was approximately $2,258,983,581. Other DAG tokens can be considered potential competitors to Hedera, but in terms of ranking, HBAR is undoubtedly the leader.
DAG tokens ranked by market cap
Source: Coinbase
