Hedera (HBAR) HBAR

Hedera (HBAR) is a public distributed ledger that does not use a classic blockchain. It runs on hashgraph, a consensus algorithm invented by computer scientist Leemon Baird, and is governed by a council of large companies that also operate its nodes. HBAR, the native coin, pays network fees and secures the network through staking. Fees are set in US dollars, which makes costs predictable for businesses.

What is Hedera?

Leemon Baird developed hashgraph in the mid-2010s and co-founded Swirlds, which held the patents. Hedera was built on that technology by Baird and Mance Harmon, and its public mainnet launched in 2019. From the start the project targeted enterprises: instead of anonymous miners or validators, its nodes are run by members of the Hedera Council, which the whitepaper limits to 39 organisations from different industries and regions. Members listed on the council website include Google, IBM, Accenture, FedEx and Tata Communications, and members have term limits.

How Hedera works

A traditional blockchain groups transactions into blocks and chains them. Hashgraph works differently:

• **Gossip about gossip:** each node regularly shares what it knows with a random other node, along with the history of who told what to whom.
• **Virtual voting:** from this shared history, every node can calculate how others would vote without sending votes over the network.
• **aBFT security:** the algorithm is designed to be asynchronous Byzantine fault tolerant, a strong guarantee that consensus is reached even if up to a third of the stake behaves badly.

The result is fast finality, a few seconds according to Hedera, and a fair ordering of transactions by timestamp. The network is secured by a proof-of-stake model: the whitepaper fixes the supply at 50 billion HBAR and requires agreement of nodes representing more than two-thirds of the staked coins.

Hedera offers three main services: a Consensus Service to timestamp and order messages, a Token Service to create native tokens, and a Smart Contract Service compatible with Solidity and Ethereum tools. Fees start at $0.0001 and are converted to HBAR at the moment of each transaction.

Key dates

• **Mid-2010s:** Leemon Baird invents hashgraph and co-founds Swirlds.
• **2019:** Hedera’s mainnet launches; version 1.5 of the whitepaper is published on 13 August 2019.
• **2020:** Google Cloud joins the Hedera Council.
• **19 January 2022:** the council votes to buy the hashgraph patents and open-source the algorithm under the Apache 2.0 licence.
• **16 September 2024:** Hedera’s core code is transferred to the Linux Foundation as the open-source Hiero project.
• **27 October 2025:** inception of the Canary HBAR ETF (HBR), a Nasdaq-listed fund that holds HBAR directly, according to its fund page.

What HBAR is used for

HBAR pays for every transaction, token creation, message and smart contract call on Hedera, and holders can stake it to support nodes and earn rewards. Companies use the network to timestamp data (supply chains, carbon credits, audit trails), to issue tokens and stablecoins, and to build applications that need low, stable fees. Developers familiar with Ethereum can deploy smart contracts written in Solidity.

Hedera vs traditional blockchains

Most public blockchains let anyone run a validator, and their governance is informal or token-based. Hedera chose the opposite trade-off: a known, permissioned set of node operators, a formal governance body and fees fixed in dollars. Supporters see stability that suits enterprises; critics see a system that is less decentralised than Bitcoin or Ethereum. Our guide what is a blockchain explains the classic model.

Risks and criticism

• **Centralisation:** nodes are run by council members and changes are approved by the council, not by an open set of validators.
• **Enterprise focus:** high-profile council members do not guarantee real usage or demand for HBAR.
• **Ecosystem size:** DeFi and consumer applications on Hedera remain smaller than on the most active smart-contract chains.
• **Smart-contract risk:** applications built on Hedera can contain bugs, like on any network.
• **Volatility:** HBAR can lose a large part of its value quickly.

How to store HBAR

Hedera uses its own account format (for example 0.0.12345), so you need a wallet that supports Hedera specifically, such as HashPack, or a multi-chain wallet with Hedera support. Some exchanges ask for a memo when you deposit HBAR. For long-term holdings, a cold wallet compatible with Hedera keeps your keys offline. Never share your recovery phrase.