Token of the Month

Sunday is upon us.

And we’re continuing into October with an in-depth analysis of another one of the most promising cryptocurrencies in the space. 

Hedera Hashgraph (HBAR)

Hedera Hashgraph is a third-generation, L1 blockchain infrastructure that utilises a patented consensus algorithm, hashgraph, to address issues related to scalability and interoperability, and positioning itself as a highly utilised, sustainable, enterprise-grade public network for the decentralized economy.

Hedera is not only known for its speed but also for its commitment to carbon-negative network operations, emphasizing environmental sustainability, and it's designed for quick, efficient, and secure applications, leveraging the efficiency of the hashgraph consensus algorithm.

How does Hedera work?

Imagine Hedera is like a big group of people who want to keep track of some special information.

They do this using a super safe way called hashgraph.

Now, instead of one person checking the information (like in Bitcoin), everybody in the group looks at it and agrees on what's correct.

This makes it very quick and safe. Some very important organizations, like Google and IBM, are in charge of making sure everything works properly and fairly. They make decisions together, and no one can be too bossy.

So, it's kind of like when you and your friends decide on a game to play together. You all talk and agree on the game you like, ensuring no one feels left out.

Hedera is like that but with important information on the computer.

What are some of HBAR’s Unique Features?

1. Hashgraph Consensus Service:

Hedera uses a technology called hashgraph for its consensus mechanism. Think of this as how everyone in a big group agrees on something.

Unlike traditional blockchains, which can be slow, hashgraph is super fast because everyone in the group works together to confirm what's right. This speed is precious because it means that transactions happen quickly.

For example, if you want to buy something with cryptocurrency, like you do with regular money, you don't want to wait a long time for it to go through. Hedera's speed makes it more convenient for users and more suitable for real-world applications.

Also, because everyone in the group checks and agrees on what's correct, it's very secure.

It's like having a team of security guards making sure no one messes with your stuff. In the world of cryptocurrency and other digital applications, security is vital. It means your data and transactions are less likely to be hacked or tampered with, making it trustworthy for businesses and users.

2. Hedera Governance

Now, think about who's in charge of this group. Hedera is led by a special council made up of big, well-known companies like Google and IBM. These are like the wise grown-ups who make sure everything runs smoothly and fairly.

They are committed to ensuring Hedera keeps improving and stays decentralized, which means no one person or company controls everything. This governing council is a big deal because it helps maintain Hedera's reliability and integrity and promotes fairness.

This is also encouraged through its use of uniform timestamping techniques which guarantee fairness of transactions between members.

The fact that these important members make decisions together is a good thing for investors. It means that no one can be too bossy and make unfair changes. It's kind of like having rules when you play games with your friends; everyone agrees to the rules, so the game is fun and fair for everyone.

Hedera's governance structure ensures that investors and users can trust the platform, knowing it won't be easily manipulated by a single entity. It's about keeping things fair and stable.

Investors are interested in Hedera because it combines strong security and speed with fair governance.

This makes it appealing for businesses and developers looking for a reliable and efficient platform to build their applications.

When you invest in Hedera, you're investing in a platform that values both innovation and fairness, and this could potentially lead to its long-term success.

3. Asynchronous Byzatine Fault Tolerant System (ABFTS)

Imagine you and your friends are playing with building blocks. You're all trying to build the tallest tower. But sometimes, one of your friends decides to be tricky and tries to slow things down by not playing nicely.

Byzantine fault tolerance in Hedera makes sure that even if one or more of your friends act tricky, you can still agree on how to build the tower, and your tower will be stable. In the world of Hedera, this means that even if some of the computers on its network are trying to mess things up, the network can keep working correctly and agree on what's happening.

But what makes Hedera even more special is that it's "asynchronous." This is like saying it doesn't rely on everyone moving super fast. Imagine you're having a race with your friends, but some of your friends are really slow, and you can't be sure when they'll finish. You don't have to wait forever; you keep going and know that your slow friends will catch up at some point.

Hedera, with its "asynchronous" feature, can handle delays and missing messages, just like waiting for your slow friends to catch up in your race. It can still work properly even if things aren't always super fast, just like how things work in the real world where everything doesn't happen instantly.

4. Energy Efficient

In the world of blockchain technology, energy consumption has become a big concern, especially with Bitcoin, which uses a lot of energy. But there's good news! Some newer blockchains, like Hedera Hashgraph, use a more eco-friendly method called "Proof-of-Stake" to do their work. This makes them not only better for the environment but also faster and cheaper compared to Bitcoin.

Researchers from the Centre for Blockchain Technologies at University College London (UCL CBT) did a study to see which of these newer blockchains used the least energy.

They looked at Hedera Hashgraph and five others: Algorand, Cardano, Ethereum 2.0, Polkadot, and Tezos. The study found that these Proof-of-Stake blockchains are way more energy-efficient than Bitcoin, by at least three orders of magnitude, which is a fancy way of saying a lot.

Among all these eco-friendly blockchains, Hedera Hashgraph turned out to be the greenest and the fastest.

It uses the least energy and can do the most transactions in a second, about 10,000.

To put that in perspective, Ethereum 2.0, which is also pretty quick, can do around 3,000 transactions in a second.

The Team

When we look at the potential of a company, whether that be in the Web3 space or within the traditional financial markets, the makeup of the senior core team usually plays a huge role in determining whether it can be as successful as it promises.

Founder: Leemon Baird

• Dr. Leemon Baird is a highly accomplished American computer engineer, mathematician, and scientist, well-versed in both academia and industry.

• He's best known as the co-founder and former CTO of Hedera Hashgraph, a cutting-edge public cryptocurrency network platform that's gaining recognition for its exceptional security and innovation.

• Under his leadership, Hedera Hashgraph has secured adoption by industry giants like Avery Dennison and LG for managing industrial NFTs. Additionally, he co-founded Swirlds, a leading software platform specializing in fully distributed cloud applications, further cementing his reputation as an innovative tech entrepreneur.

• Dr. Baird's illustrious journey began with a bachelor's degree from the U.S. Air Force Academy, followed by a record-setting PhD in Computer Science from Carnegie Mellon University.

• His remarkable career encompasses two decades of military service in the U.S. Air Force, during which he held diverse roles, including a research scientist, and concluded as a Lieutenant-Colonel in 2009.

  

CIO: Alex Popowycz

• Tasked with overseeing the technical operations of the network. His role involves collaborating closely with Hedera's member operators to ensure the network's sustainable development while upholding its core attributes of speed, fairness, and security.

• Prior to joining Hedera, Alex served as the CIO at Health First, a prominent multi-hospital integrated health system. He brings a wealth of experience from his previous leadership roles at Fidelity Investments, where he was responsible for cybersecurity and standards.

• Alex is a recognized figure in the industry, having chaired the technology working group of the Financial Services Roundtable and contributed significantly to the development of the NIST Cybersecurity Framework as a member of the federal government's Information Security and Privacy Advisory Board. He played a pivotal role in shaping standards frameworks like SAML 2.0 and DMARC.

• Alex's career commenced as an Air Force officer, and he is a graduate of the US Air Force Academy. He also holds an MBA from Bentley University and boasts several patents related to cybersecurity technologies.

Co-Founder: Mance Harmon

• Mance Harmon was the CEO and co-founder of Hedera. Harmon's impressive background includes serving as a scientist in the US Air Force, where he was responsible for developing simulators to predict and manage nuclear missile attacks.

• After this, he transitioned into the realm of cybersecurity, amassing over two decades of leadership experience.

• During his career, Harmon founded two startups, held a senior executive role in product security at a $1.7 billion revenue organization, and conducted research in Machine Learning at Wright Laboratory. In this interview, he delves into his remarkable journey from working on intercontinental ballistic missiles (ICBMs) to pioneering distributed ledger technologies (DLTs). He also emphasizes the importance of building something meaningful rather than focusing solely on profit.

Applications

The Hedera Hashgraph network is comprised of four main components or services, which work together to allow transfers of value, the creation and execution of smart contracts, file transfers, and more. These include:

HBAR: A cryptocurrency used for enabling low-fee, highly customizable transactions on Hedera.

• HBAR is highly energy-efficient and operates on a proof-of-stake network. This network is open to the public, making it accessible and secure.

• By staking HBARs, users can influence the network's consensus, and Hedera can process an impressive 10,000 transactions per second without sacrificing security or stability.

Smart contracts: Used for automatically executing logic and building decentralized applications targeting numerous possible use-cases.

• Hedera's smart contracts offer a new way to create mobile apps, emphasizing transparency and efficiency by relying on computer code rather than central authorities.

• They use a popular global standard for the widest reach, with lower costs and less price fluctuation compared to other blockchain solutions. Hedera ensures quick and environmentally responsible transactions, processed in the order they are received without dependence on miners' fees or priorities.

Consensus Service: For attaining fast, fair, and secure consensus in any application that requires trust.

• The Hedera Consensus Service (HCS) is software designed for creating reliable and timestamped records of events for web2 and web3 applications. It ensures transparency and auditability, as messages sent to the Hedera network are timestamped and structured fairly.

• HCS is already used in various applications like monitoring IoT devices, tracking supply chain provenance, documenting asset transfers between blockchains, and tallying votes in decentralized organizations (DAOs).

Tokenomics

HBAR plays a crucial role in the network. It's used for paying network fees, staking to secure the network, and for services like Token, Consensus, and Smart Contracts.

• While HBAR functions as the "gas" to power the network, the fees are incredibly low compared to other blockchains.

• HBAR also contributes to network security by connecting its value to network validators. While technically, retail users can become validators, it can be challenging due to resource requirements and shared rewards with major enterprises.

However, retail users can still support the network by delegating their HBAR to governing members, boosting their network influence and earning HBAR rewards in the process.

Total Supply: 50 Billion

Circulating Supply: 33.5 Billion (66.7%)

The token distribution of HBAR is as follows:

• 32.41% is allocated to Hedera Pre-Minted Treasury

• 4.44% is allocated to Employees

• 17.4% is allocated to SAFTS, Purchase Agreements

• 23.99% is allocated to Ecosystem Development

• 7.96% is allocated to Swirlds

• 7.96% is allocated to Founders

Use Cases

Kia & Hyundai

The launch of Hyundai Motor Company and Kia Corporation's Supplier CO2 Emission Monitoring System (SCEMS) on the Hedera mainnet highlights two key points:

1. It demonstrates the broad recognition of the Hedera network's value by major enterprises outside the Governing Council.

2. When it comes to the critical need for data accuracy and security, Hedera is a top choice.

SCEMS uses blockchain to calculate carbon emissions across the entire supply chain, providing reliable data for Hyundai Motor and Kia, from raw material procurement to product transportation.

It combines AI technology to set carbon reduction targets and predict emissions accurately. This combination of AI and the high-performance Hedera network ensures compliance with environmental regulations, fostering sustainable supply chains.

SCEMS offers transparency and confidence in data for regulators, stakeholders, and investors, empowering partners to establish carbon reduction targets and forecast future emissions. This initiative is a significant step in addressing climate change and aligns with a long-term institutional ESG strategy on the Hedera network.

Shinan Banking

Shinhan Bank in South Korea has partnered with a global megabank outside Korea to develop a proof-of-concept (PoC) on the Hedera Network using stablecoins for international remittances. This partnership is beneficial to Hedera for several reasons:

1. Validation of the Network: By collaborating with reputable institutions like Shinhan Bank and a global megabank, Hedera's network is validated as a suitable platform for real-world financial applications. This can attract more enterprises and developers to consider Hedera for their projects.

2. Increased Usage of HCS and HTS: The use of Hedera Token Service (HTS) and Hedera Consensus Service (HCS) in this PoC showcases the practicality and effectiveness of these Hedera services, encouraging their adoption in other applications.

3. Efficiency and Cost-Effectiveness: The PoC focuses on cost-effective and efficient international remittances, which highlights the practicality of Hedera for such use cases. This efficiency and cost-effectiveness can attract other financial institutions and businesses to consider Hedera for similar purposes.

4. Advancement in Stablecoin Usage: Demonstrating the use of stablecoins within Hedera's ecosystem can drive innovation in the world of digital currencies. It can lead to the creation of new financial products and services, further enriching Hedera's ecosystem.

In summary, this partnership with Shinhan Bank strengthens Hedera's position in the blockchain and financial technology space, showcasing the platform's capabilities and real-world utility. It's a significant step toward expanding the adoption of the Hedera network.

FedNow

The partnership between Hedera Hashgraph and FedNow's instant payments platform, featuring Dropp, has proven highly fruitful for several reasons:

1. Innovative Payment Solution: 

   Dropp, based on Hedera, provides an innovative pay-by-bank alternative to credit card payments. It empowers merchants to accept small-value digital purchases with minimal transaction fees. This solution supports micropayments in HBAR, the U.S. dollar, and Circle's USDC, making it attractive for both consumers and businesses.

2. Unique Blockchain Structure: 

   Hedera Hashgraph is distinct from other blockchains due to its utilization of hashgraph consensus. It's the only public distributed ledger that employs this technology, enabling impressive performance with 10,000+ transactions per second and ultra-fast transaction finality in seconds.

3. Substantial Growth: 

   Hedera's blockchain network has witnessed significant growth in terms of daily active accounts and new account creation. Year-to-date, daily active accounts have surged by 288%, reaching 13,500 by Q2 2023. The growth is driven by various applications, including NFTs and DeFi, making it a dynamic ecosystem.

4. Notable Integrations: 

   Hedera has made strategic integrations, such as with FreshSupplyCo (FSCO) for asset tokenization in the agrifood supply chain and South Korean bank Shinhan Bank for stablecoin remittances. These integrations expand the use cases and adoption of Hedera's public network.

   Further…

   • See the link below from @PlechCustoms: https://x.com/PlechCustoms/status/1686825066737111040?s=20

Summary:

Hedera has become a notable presence in the ever-evolving blockchain space, standing out for its exceptional efficiency and security, driven by the hashgraph consensus algorithm.

It offers impressive transaction throughput and speedy finality, all underpinned by a decentralized governance model that ensures reliability.

Notably, Hedera's ecosystem differentiates itself from around 99% of Layer 1 (L1) projects.

Instead of the traditional path of community decentralization, Hedera has fully embraced the enterprise route, similar to that of CSPR - which we mentioned a few weeks ago.

This strategic decision aligns with the demands of large enterprises that seek decentralized trust networks mediated through global corporations, rather than relying on the general public.

This unique approach is evident in the robust applications and utilities thriving on the Hedera network.

From its hashgraph structure to the business-oriented applications running on Hedera and its choice of governing members, Hedera is making waves as a dynamic force driving the future of public ledgers and Web3 applications and is a strong contender in our eyes for a top 15 spot in the next upcoming bull run (whenever it may come).

Recommended Crypto Accounts to Check Out

That’s all from us this week, before we let you go here are some of our favourite Twitter pages for great content and deep dives on specific Crypto projects.

Shout us out if you find them valuable (we’re sure you will):

Just remember if you’re reading this, we’re so early in this journey of technology.

Zoom out, stick to your intuition and have patience - all great things come with time.