Altcoin Spotlight: What is Hedera?
It seems like with each and every week that passes, there is a new project asking for you to invest in their ICO. Because the turnover rate in the cryptocurrency world is high, it’s important to investigate each and every project before you fork over your hard-earned money.
Hedera is a unique blockchain protocol that combines the functionality of Ethereum with the governance that businesses need in order to get involved in the cryptocurrency world. This doesn’t mean that Hedera is a good investment for everyone, however.
If you are interested in possibly purchasing Hedera, then keep reading, as this article will teach you all about how it works, what it should be used for, and whether or not you should invest.
What is Hedera?
Hedera, also known as Hedera Hashgraph is a network that runs on a universal ledger similar to blockchain technology. This means that it has all the capabilities of Ethereum, but unlike Ethereum, which is based on proof of stake consensus mechanisms, Hedera is based on a unique proof of authority hashgraph function. Therefore only nodes granted authority are allowed to process transactions on the system.
Because of this, Hedera is not decentralized, rather it is overseen by a company that ensures everything is running smoothly. Although this may not sound ideal, for many businesses Hedera is just what they were looking for to allow them to get involved in the cryptocurrency world. This is because they can build on blockchain technology while also not having to worry that their business information is in good hands. IBM, LG, and Boeing have all already begun to act as nodes on the Hedera network. Basically, Hedera combines the idea of private and public blockchains.
Currently, Hedera is faster than Ethereum when it comes to processing transactions because of the hashgraph grouping feature in which transactions are grouped together and processed in these groupings by all the chosen nodes at once. This keeps things quick while also helping to keep transaction costs low and affordable for businesses using the blockchain.
Hedera has a fixed supply of tokens, called HBAR, at 50 billion. This is to help prevent inflation in the network. If you own HBAR, you are able to stake transactions on an approved node. Currently, only large businesses have been approved to host nodes.
Who Created Hedera?
Hedera was created in 2018 by Dr. Leeman Baird and Mance Harmon, both of which have extensive history working in computer science. Currently, Harmon serves as the CEO of the company.
The nodes which are selected to process transactions are selected by the Hedera Governing Council which is a group of 39 people/businesses that have a vested interest in the blockchain. Current council members include IBM, Google, LG, and Chainlink. To date, there are only 25 council members, with 14 seats still remaining available.
Like democracy, the make-up of the council is constantly changing as council members are only allowed to have two consecutive 3-year terms. This means many of these businesses currently on the council will not be running it in 6 years. Members of the council vote on all aspects of the blockchain, from upgrades to changes, and even security measures taken by the network.
Should You Invest in Hedera?
As mentioned above, Hedera is very similar to Ethereum. The only difference is, instead of being staked by users of the system, it is staked by various businesses. This allows it to use a different consensus function that processes transactions faster than blockchain technology.
While this sounds great in theory, Hedera is just too new of a project to jump headfirst into. It is likely a safe investment, as it is backed by companies like Google and Boeing, but it’s hard to say if it has a use case in society yet. Many businesses say they like the idea of the more proof of authority type system, but there isn’t a line of people waiting to use the software just yet.
Therefore Hedera may be a good investment, but it is difficult to say at this time. If you are a business, it could be worthwhile to see about your business investing in becoming a council member to process transactions. This way your business could earn money from running a node. Just remember that all cryptocurrency transactions carry risk, and that it is possible Hedera could go to zero tomorrow and you would lose everything.
Additionally, you should take into account that Hedera has not met the growth predictions it made at the beginning of the year. They estimated that the coin, by the end of 2021, would be worth at least $2 each. Unfortunately, the coin has barely gone higher than $0.31 to date and doesn’t seem to be headed for the moon anytime soon. This isn’t necessarily bad, but it isn’t a good sign either.
Where Can You Buy Hedera?
Have you decided to go forward with an investment in the cryptocurrency? Well first and foremost, if you are a business interested in running a node, you’ll need to contact the Hedera team using their website.
But if you aren’t a business, and just want to buy some HBAR tokens, you can find them on several different exchanges. Currently, Binance is the biggest choice when it comes to purchasing Hedera but you can also find the coin on Huobi and Bittrex. On these exchanges, you can purchase Huobi with USD, ETH, BTC, USDT, and a few other cryptocurrencies.
Currently, only part of the 50 billion intended coins are in circulation. This means that there may be some price adjustments in the future as more and more coins are released.
Overall, there are many reasons to purchase Hedera, especially if you are in the business world. But you should only invest if it is a technology that you believe your business will use, benefit from, or will surpass Ethereum. Otherwise, Hedera is just another want-to-be Ethereum that you are probably better off skipping this time around.