What Is Hedera & How Does It Work? Who Created HBAR?

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Hedera Hashgraph stands out in the fast-evolving world of decentralized technologies as a high-performance alternative to traditional blockchain networks. Unlike Bitcoin or Ethereum, which rely on blockchain architecture, Hedera is built on a revolutionary technology called hashgraph—a distributed ledger system that offers superior speed, security, and sustainability. This guide explores what Hedera is, how it functions, who created it, and why it's gaining attention from major global enterprises.

Understanding Hedera Hashgraph (HBAR)

Hedera Hashgraph is a decentralized public network that performs the same core functions as blockchain—recording transactions, supporting smart contracts, and enabling digital assets—but does so using a fundamentally different architecture. Instead of chaining blocks together, Hedera uses hashgraph, a data structure based on directed acyclic graphs (DAGs).

This design allows for faster consensus, lower fees, and dramatically reduced energy consumption compared to proof-of-work blockchains like Bitcoin. At the heart of this ecosystem is HBAR, the native cryptocurrency that powers the network by paying for transaction fees and enabling staking for consensus participation.

👉 Discover how next-gen distributed ledgers are reshaping digital trust and efficiency.

How Does Hedera Hashgraph Work?

Hedera achieves consensus through an asynchronous Byzantine fault-tolerant (aBFT) algorithm—a mathematically proven method that ensures security even if some nodes act maliciously or fail. This is a significant upgrade over traditional blockchain consensus mechanisms, which often sacrifice speed or decentralization for security.

Rather than mining or block validation, Hedera uses a unique protocol known as “gossip about gossip.” In this model, nodes share transaction information with random peers, who then pass it on—creating a rapid, self-organizing propagation of data across the network. Each node records not just the transaction but also the history of how it was received, allowing the network to determine the exact order of events without needing a centralized clock.

This enables:

HBAR operates similarly to Ether on Ethereum—it fuels smart contracts, decentralized applications (dApps), and file storage services on the Hedera network.

Key Features That Set Hedera Apart

Who Created Hedera Hashgraph?

The foundation of Hedera traces back to Dr. Leemon Baird, an American computer scientist and former professor at the U.S. Air Force Academy. In 2015, Baird co-founded Swirlds, a company that holds the patents for hashgraph technology. His research led to the invention of the hashgraph consensus algorithm—an innovative approach to distributed systems that avoids the inefficiencies of blockchain.

In 2017, Baird launched Hedera Hashgraph Ltd., introducing the public network in March 2018 with a live event in New York City. Since then, Hedera has grown into one of the most enterprise-backed distributed ledger platforms.

The Hedera Governing Council

To ensure decentralized governance and long-term stability, Hedera operates under a Governing Council composed of globally recognized institutions, including:

Each member has equal voting rights, preventing any single entity from controlling the network’s direction.

What Makes Hedera Unique?

While many distributed ledgers claim scalability and speed, few combine all three pillars of the blockchain trilemma—decentralization, security, and scalability—as effectively as Hedera.

Unlike public blockchains that struggle with congestion and high fees during peak usage, Hedera maintains consistent performance regardless of load. Its patented technology prevents forks and double-spends inherently, thanks to mathematical finality.

Additionally, Hedera supports four core services:

  1. Cryptocurrency (HBAR)
  2. Smart Contracts
  3. File Storage
  4. Consensus Service

These tools empower developers to build dApps for payments, identity verification, supply chain tracking, healthcare data management, and more—all with enterprise-grade reliability.

👉 See how developers are building scalable dApps without sacrificing security or speed.

What Gives HBAR Its Value?

HBAR derives value from both utility and demand:

As adoption grows—especially in sectors sensitive to energy use and regulatory compliance—HBAR becomes increasingly valuable. With governments scrutinizing proof-of-work cryptocurrencies due to environmental concerns, energy-efficient networks like Hedera gain a strategic advantage.

How Many HBAR Tokens Are in Circulation?

Hedera launched with a fixed total supply of 50 billion HBAR tokens. Unlike mined cryptocurrencies, all tokens were minted at genesis and are being released gradually over a 15-year schedule managed by the Governing Council.

As of now, approximately 34–36 billion HBAR are in circulation, with the remainder held in treasury for ecosystem development, grants, and incentives.

This predictable release model helps stabilize price volatility and supports sustainable growth.

How Is the Network Secured?

Security in Hedera comes from its aBFT consensus mechanism, which guarantees:

Because hashgraph reaches consensus mathematically—rather than probabilistically like blockchains—it offers stronger cryptographic assurances. This makes Hedera particularly attractive for mission-critical applications in finance, healthcare, and government.

How to Use Hedera Hashgraph

Developers can leverage Hedera to build fast, low-cost dApps using familiar tools like Solidity (for smart contracts) and SDKs in JavaScript, Java, and Go. Use cases include:

Enterprise partners are already deploying solutions on Hedera for cross-border payments, carbon credit tracking, and secure document verification.

Choosing a Wallet for HBAR

Since hashgraph differs structurally from blockchain, standard crypto wallets may not support HBAR natively. However, several reputable options are available:

For maximum security, use a non-custodial wallet where you control the private keys. Avoid storing large amounts on exchanges unless actively trading.

👉 Learn how to securely manage digital assets on high-performance networks.

Frequently Asked Questions (FAQ)

What is the difference between blockchain and hashgraph?

Blockchain adds transactions in sequential blocks, requiring mining or staking for consensus. Hashgraph uses a gossip protocol and DAG structure to achieve faster, fairer consensus without mining—offering higher throughput and lower latency.

Is HBAR a good investment?

HBAR offers utility within a scalable, enterprise-grade network backed by major corporations. Its energy efficiency and governance model make it a compelling option amid increasing regulatory scrutiny of energy-intensive cryptos.

Can I stake HBAR?

Yes. You can stake HBAR directly or delegate it to a validator node and earn rewards from transaction fees. Staking also strengthens network security.

Is Hedera decentralized?

Hedera balances decentralization with governance. While nodes are run globally by various entities—including universities and cloud providers—the Governing Council oversees protocol upgrades. The goal is gradual decentralization over time.

How fast are Hedera transactions?

Transactions achieve finality in 3–5 seconds, with near-instant user experience and no need for confirmations like on blockchain networks.

Where can I buy HBAR?

HBAR is listed on major exchanges such as OKX, Binance, Kraken, and others. Always choose platforms with strong security practices and regulatory compliance.

By combining cutting-edge consensus mechanics with real-world enterprise integration, Hedera Hashgraph represents a bold step forward in distributed ledger technology. As demand grows for sustainable, scalable infrastructure, HBAR is positioned to play a pivotal role in the future of digital economies.