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Beginner's Guide to Hedera Hashgraph & HBAR
Author: Catherine
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Hedera is one of these projects that would often appear in the crypto news with a high-profile partnership but is neither very popular nor insignificant. What is HBAR and how to use it in 2024? Wait no more and learn from our guide!

Key Takeaways

What is Hedera Hashgraph?

Before we dive deeper into the topic, let’s clear up the terminology. Hedera is the project and network name, while “hashgraph” is a kind of distributed ledger, like blockchain. Nevertheless, the name stuck, and it is sometimes referred to as Hedera Hashgraph.

hedera hashgraph logo
Source: Hedera Brand Assets

Hedera Hashgraph is a public distributed ledger that aims to provide a secure and efficient platform for decentralized applications (DApps) and enterprise solutions. Their proposal to solve the issues of decentralized networks is a hashgraph, which can work asynchronously and scale massively.

Key Features of Hedera Network

How Does Hedera Hashgraph Work?

Since hashgraph is not your regular blockchain, it works differently. In blockchain, a consensus on the state of the network is reached after all nodes are synchronized. Hedera Hashgraph utilizes a unique consensus algorithm that relies on more optimal protocols.

Nodes in the Hedera network communicate with each other by gossiping about the transactions they have received. This process spreads information quickly throughout the network. Nodes collect the gossip and use it to build a directed acyclic graph (DAG) structure called a hashgraph. This hashgraph records the history of transactions and the order in which they were received.

When the communication is done, it is time to reach a consensus on the state of the network. Hedera’s specification of the algorithm is called ABFT, which stands for Asynchronous Byzantine Fault Tolerance atomic broadcast protocol. Nodes in the network use virtual voting to come to a consensus on the order of transactions. This process does not rely on synchronized clocks and can tolerate a certain number of faulty nodes.

Next, the hashgraph algorithm determines the timestamp and order of transactions based on the votes received from nodes. This ensures that the network reaches a fast and fair consensus on the state of the ledger. By using gossip about gossip and virtual voting, Hedera Hashgraph aims to achieve high throughput, low latency, and fair ordering of transactions securely and efficiently.

History and Team behind Hedera

Hedera Hashgraph’s founders are Mance Harmon and Dr. Leemon Baird. They can be credited for both establishing the Hedera network and creating its hashgraph technology. Their work started in 2012 but the first tangible steps toward the current state of Hedera occurred in 2017 with the establishment of Hashgraph Consortium.

Mance Harmon is a co-founder and ex-CEO of Hedera Hashgraph LLC. He has a background in cybersecurity and served as a senior executive in the US Air Force. Dr. Leemon Baird is the other co-founder and Chief Scientist of Hedera Hashgraph. He is a computer scientist and inventor of the hashgraph algorithm circa 2014. The company is currently managed by the board of directors with Brett McDowell as the chair.

The team at Hedera Hashgraph also includes experts in various fields such as technology, business development, and finance. Committees handle various branches of the company’s development, such as government affairs, coin treasury and distribution, and corporate governance.

Since the foundation of Hedera in early 2018, the mainnet has been made public in 2019, tokenization finalized in 2021 and smart contracts arrived in 2022. The Hedera Council, which governs the network, by now has recruited 32 members of different sizes and significance.

What is HBAR Crypto?

Like many decentralized networks, to keep maintainers interested in securing the network, Hedera has a built-in cryptocurrency, HBAR (ℏ). Therefore, it is necessary to enable the proof-of-stake consensus algorithm: users pay network fees to have their transactions processed, validators collect the fees for the transactions they helped process.

HBAR is also the means of value exchange in the Hedera ecosystem. Even though the network supports tokenization, so any real-world currency or unit of exchange could work, having a single common currency is more convenient and transparent.

HBAR transactions are fast, typically settling in a few seconds. The ABFT consensus algorithm ensures security and fairness. The network aims to keep transaction fees low and predictable to encourage adoption and scalability.

Hedera uses a proof-of-stake model to achieve distributed consensus, allowing users to stake HBAR to earn rewards. HBAR holders can also participate in network governance decisions through voting based on their stake in the network.

The total supply of HBAR tokens is 50 billion but only 85% has been allocated and entered circulation. The illiquid part of the supply is locked and is yet to be given purpose by the Hedera Council.

How to Use HBAR?

Now that the purpose of HBAR coins is more or less clear, how do you actually use them?

HBAR can be used to transfer value and pay for transactions on the Hedera Hashgraph network. Developers can use HBAR to deploy and execute smart contracts on the platform. Finally, HBAR is used to pay for network fees, such as transaction fees and storage fees.

As a gas token, HBAR on its own is not exactly appealing to hold. But it is crucial to avail of the Hedera network for purposes such as:

Comparison with Similar Projects

Hedera vs. IOTA

Similarly to Hedera Hashgraph, IOTA also utilizes a DAG structure for its Tangle consensus mechanism, aiming for scalability and feeless transactions.

Although similar in technology, these two platforms are hardly competitors. Hedera provides more enterprise-focused features, governance, and regulatory compliance compared to IOTA’s focus on IoT and machine-to-machine transactions.

Hedera vs. Algorand

Hedera is far from the first project to attempt to solve the blockchain trilemma. Algorand emphasizes fast and secure transactions through its Pure Proof of Stake (PPoS) consensus mechanism. Hedera, though, as we have mentioned, abandons blockchain technology completely.

Hedera’s governance model involves a council of diverse industry players, giving more authority to professionals. Algorand takes a radical departure from this approach and focuses on decentralization through its consensus algorithm.

Is Hedera Criticized For Anything?

Let’s be honest, if Hedera Hashgraph proposed a perfect solution and made the right choices, everyone would have been on it. However, this is far from the current reality.

Firstly, some critics argue that Hedera’s governance model, which includes a council of major corporations, may lead to centralization and potential conflicts of interest.

Secondly, while Hedera claims to offer high scalability, some critics question whether it can truly handle the level of transactions needed for widespread adoption. In addition to scalability, security at scale is an even bigger challenge, and until not too long ago, Hedera struggled with it, despite modest network usage.

Thirdly, with a crowded blockchain ecosystem, some skeptics question whether Hedera can differentiate itself enough to attract significant adoption and usage. The supporters of Hedera and HBAR holders may even be a little bit too eager to find this edge over competitors. In April, HBAR experienced sharp price movements due to the news of BlackRock’s ICS U.S. Treasury money market fund tokenization being misinterpreted as a direct endorsement from the hedge fund giant.

Partnerships and the Future of Hedera

Hedera is pushing its fifth year in the market, and we have talked a lot about what it has achieved during this time. What is next for Hedera and HBAR?

For one, the Hedera Council, love it or hate it, is not even complete. Hedera intends there to be 39 positions, and quite a few slots are still open. Some of the more recent arrivals are Mondelez International, Hitachi, and BitGo.

As for future developments, Hedera plans to release a few features to improve the network. There is nothing too crazy in the public roadmap: performance adjustments, catching up to Ethereum EVM after the Dencun update, and an implementation of The Graph.

That about sums everything up about what you should know about Hedera Hashgraph and HBAR! Before we wrap up, let us give a few more words of more practical advice.

How to Store the HBAR Token?

arctic wallet crypto
Source: Arctic Wallet

Hedera (HBAR) is quite a popular altcoin, so by now, it has extensive support in most multi-currency crypto wallets. Just so you don’t have to blindly sort through apps, here are a couple of recommendations.

For multi-asset storage on a smartphone device, try Edge, Exodus, or Arctic. All three apps provide top-notch security, a user-friendly interface, and a smooth experience with crypto and blockchain.

How to Exchange HBAR?

Now that you know more about HBAR, you can easily swap it with 200+ other assets with ChangeHero!

  1. Choose the currencies on the home page, amounts, and the type of exchange. Provide your HBAR wallet address in the next step and check the details;
  2. Double-check the provided information, read and accept the Terms of Use and Privacy Policy;
  3. Send the cryptocurrency for the swap in a single transaction. In a Fixed Rate transaction, you have 15 minutes before it expires;
  4. Sit back and relax. Now we are doing all the work: checking the incoming transaction and making the exchange as soon as it arrives;
  5. As soon as the exchange has been processed, your HBAR is on its way to your wallet. And so, the transaction is finished!

The swap did not go smoothly? Our customer support will help you 24/7 in the chat on the website or through the email: [email protected].


Despite a unique value proposition, Hedera faces fierce competition in bringing blockchain to the mainstream. Nevertheless, its established position in the market proves its resilience and dedication to making this vision a reality.

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Frequently Asked Questions

What is unique about HBAR?

Hedera’s native cryptocurrency, HBAR, stands out for its use in securing the network, enabling micropayments, and facilitating decentralized applications. Its unique consensus algorithm, Hashgraph, offers high throughput, low latency, and fair ordering of transactions, making it well-suited for enterprise use cases and scalability. Additionally, HBAR’s fixed and predictable supply helps maintain stability and value within the ecosystem.

What are the issues with HBAR?

Some potential issues with HBAR include market volatility affecting its value, regulatory uncertainties impacting its adoption, and competition from other blockchain projects offering similar features. Additionally, concerns about centralization due to the involvement of certain governing council members may raise questions about the network’s decentralization.

What is Hedera used for?

Hedera Hashgraph (HBAR) is a decentralized public network designed to enable secure and fast transactions, smart contracts, and file storage. It aims to provide a platform for building decentralized applications (dApps) with high levels of security, scalability, and low transaction fees. Hedera’s use cases span various industries, including finance, supply chain management, gaming, and identity verification.

What is Hedera good for?

Hedera Hashgraph is well-suited for applications requiring high transaction throughput, low fees, and fast finality. Its secure and efficient consensus mechanism makes it ideal for use cases such as decentralized finance (DeFi), supply chain management, gaming, and identity verification. Additionally, its governance model ensures fairness and transparency, making it attractive for enterprises looking to leverage blockchain technology.


This article is not a piece of financial or investment advice and is provided for informational and educational purposes only.

When dealing with cryptocurrencies, remember that they are extremely volatile and thus, a high-risk investment. Always make sure to stay informed and be aware of those risks. Consider investing in cryptocurrencies only after careful consideration and analysis and at your own risk.