What is Hedera (HBAR)?
Hedera (HBAR) is an enterprise-grade public distributed ledger that uses Hashgraph consensus instead of traditional blockchain. Unlike Ethereum or other blockchain platforms, Hedera achieves high throughput, low fees, and fair transaction ordering through its patented asynchronous Byzantine Fault Tolerant (aBFT) algorithm. Hedera supports native tokenization, smart contracts, and consensus services, and is governed by a council of up to 39 global organizations including Google, IBM, and Boeing.
Key Facts
What is Hedera?
Hedera is a public distributed ledger built on the Hashgraph consensus algorithm, a patented technology that achieves asynchronous Byzantine Fault Tolerance (aBFT) — the highest category of security for distributed systems. Unlike traditional blockchains that build sequential blocks, Hashgraph uses a directed acyclic graph (DAG) structure to process transactions in parallel.
Hedera's governance model sets it apart from most public networks. The Hedera Governing Council consists of up to 39 term-limited organizations from diverse industries and geographies, each with equal voting power. Members include Google, IBM, Boeing, Deutsche Telekom, and LG Electronics. The network natively supports smart contracts, token services, and consensus services, governed by this council to ensure enterprise-grade stability.
The Hashgraph algorithm achieves consensus through two key innovations: 'gossip about gossip' (where nodes share transaction history along with metadata about who told whom) and 'virtual voting' (where nodes can mathematically determine how other nodes would vote without actually exchanging vote messages).
This makes Hedera extremely efficient — it achieves over 10,000 transactions per second with 3-5 second finality and fees typically under $0.001.
Who Created Hedera? A Brief History
Origins: Swirlds and the Hashgraph Invention
The Hashgraph consensus algorithm was invented by Dr. Leemon Baird, a computer scientist and mathematician, while working at Swirlds Inc., a company he co-founded with Mance Harmon in 2015.
Baird's insight was that a DAG-based gossip protocol combined with virtual voting could achieve aBFT consensus with high throughput and low latency, without the energy-intensive mining used by Bitcoin and other proof-of-work blockchains.
From Swirlds to Hedera
In 2018, Baird and Harmon founded the Hedera Hashgraph project to build a public network on the Hashgraph algorithm. They assembled the Governing Council of global organizations to provide decentralized governance while maintaining enterprise-grade stability. The Hedera mainnet launched in September 2019, with HBAR becoming publicly available for the first time.
Key Milestones
- • 2016: Leemon Baird and Mance Harmon co-found Swirlds Inc.; Hashgraph consensus algorithm invented.
- • 2018: Hedera Hashgraph project announced; initial council members recruited.
- • 2019: Mainnet launches in September 2019; HBAR token goes live. First Governing Council meeting held.
- • 2020: Hedera Consensus Service (HCS) and Hedera Token Service (HTS) launch, enabling enterprise-grade logging and native tokenization.
- • 2021: Smart contract service upgraded to support Solidity; Google Cloud joins the Governing Council.
- • 2022: Network processes over 3 billion transactions; staking rewards program launches.
- • 2024: Council expands; Charles Adkins appointed CEO. Network surpasses 30 billion total transactions.
The Governing Council Today
Today, the Hedera Governing Council includes organizations from technology, finance, telecommunications, and other sectors. Each council member serves a limited term and has equal voting power. The council oversees network governance, treasury management, and strategic direction — providing the accountability and stability that differentiate Hedera from community-governed networks.
How Hedera Works
Hedera's architecture is fundamentally different from traditional blockchains. Instead of miners or validators competing to build blocks, Hedera nodes share transaction information through a gossip protocol and reach consensus mathematically.
Hashgraph Consensus (aBFT)
The Hashgraph algorithm achieves asynchronous Byzantine Fault Tolerance — the strongest form of consensus security. It works through two mechanisms:
1. Gossip about gossip: Each node randomly selects another node and shares all transactions it knows about, along with the history of who shared what with whom. This creates a data structure called a 'hashgraph' that records the complete communication history.
2. Virtual voting: Using the hashgraph, every node can independently calculate what other nodes would vote on transaction ordering — without actually sending vote messages. This eliminates the communication overhead of traditional voting-based consensus.
The result is a system that achieves consensus with mathematical certainty, not probabilistic finality like proof-of-work chains.
Asynchronous Byzantine Fault Tolerance (aBFT)
Hedera achieves asynchronous Byzantine Fault Tolerance — the strongest form of consensus security. It guarantees that transactions achieve mathematical finality even if some nodes are malicious or offline, as long as fewer than one-third of the network is compromised.
Unlike probabilistic finality in proof-of-work chains, aBFT consensus is deterministic: once a transaction is confirmed, it cannot be reversed.
Hedera Token Service (HTS)
Hedera Token Service (HTS): Create and manage fungible and non-fungible tokens natively on Hedera without writing smart contracts. HTS tokens benefit from the same speed and low fees as HBAR transfers — tokenization costs fractions of a cent per operation.
Hedera Consensus Service (HCS)
Hedera Consensus Service (HCS): A decentralized, ordered timestamping service. Applications send messages to HCS and receive a consensus timestamp and ordering, providing a trust layer for any application that needs verifiable ordering of events — from supply chain logs to audit trails.
Smart Contract Service
Hedera supports Solidity-based smart contracts, making it compatible with Ethereum tooling and developer ecosystems. Smart contracts on Hedera benefit from lower gas fees and faster execution compared to Ethereum mainnet.
Hedera vs Ethereum vs Solana
Hedera competes with other smart contract platforms but takes a fundamentally different approach to consensus and governance.
| Feature | Hedera | Ethereum | Solana |
|---|---|---|---|
| Consensus | Hashgraph (aBFT) | Proof-of-Stake (Casper) | Proof-of-Stake + Proof-of-History |
| Finality | 3-5 seconds | ~12 minutes (for strong finality) | ~400ms (optimistic), ~12s (confirmed) |
| TPS | 10,000+ | ~30 (L1), more with L2s | ~4,000 (theoretical 65,000) |
| Avg. Tx Fee | ~$0.001 | $0.50-$50+ (varies) | ~$0.00025 |
| Governance | Governing Council (39 orgs) | Community / EIPs / client teams | Solana Foundation + validators |
| Security Model | aBFT (strongest guarantee) | Probabilistic (PoS Casper) | Probabilistic (PoS + PoH) |
| Energy Use | Ultra-low (no mining) | Low (PoS, no mining) | Low-moderate |
Hedera's enterprise-focused governance and Hashgraph consensus provide predictable performance and low fees, making it well-suited for enterprise and regulated use cases. Ethereum offers the largest developer ecosystem and most composable DeFi, while Solana targets high-frequency consumer and DeFi applications.
The choice depends on whether you prioritize enterprise governance, developer ecosystem, or raw speed.
Why HBAR Has Value
HBAR derives value from its utility as the native currency of the Hedera network. Every transaction, token operation, smart contract execution, and consensus service call requires HBAR for fees. As network usage grows, demand for HBAR increases proportionally.
Hedera's Governing Council of major global organizations — including Google, IBM, Boeing, Deutsche Telekom, and others — provides institutional credibility that most cryptocurrency projects lack. This governance structure is designed to attract enterprise adoption and DeFi integration, where stability and accountability are critical requirements.
HBAR has a fixed supply of 50 billion tokens with no ability to mint more. Combined with a staking mechanism that locks HBAR to secure the network, the circulating supply dynamics support long-term value accrual as adoption increases. The network's focus on real-world enterprise use cases — supply chain tracking, carbon credit markets, tokenized assets — provides demand drivers beyond speculation.
The network's energy efficiency — Hedera uses minimal energy with no mining — appeals to ESG-conscious organizations and supports carbon credit and sustainability platforms built on Hedera, including the Guardian framework for verifiable environmental assets.
How to Buy HBAR
HBAR is available on most major cryptocurrency exchanges. Here is how to purchase it.
1Compare providers
Use coinvela to compare HBAR prices and fees across exchanges. Look for platforms with competitive trading fees and your preferred deposit method.
2Create an account
Sign up with your chosen exchange and complete identity verification (KYC). Most exchanges require a government-issued ID.
3Fund your account
Deposit funds via bank transfer, credit/debit card, or cryptocurrency. Bank transfers typically have the lowest fees.
4Buy HBAR
Navigate to the HBAR trading pair (e.g., HBAR/USD or HBAR/USDT) and place your order. Use limit orders for large purchases to get better pricing.
5Withdraw to Your Wallet
For long-term holding, withdraw HBAR to a personal wallet. Consider staking your HBAR through a native wallet to earn staking rewards while securing the network.
Next step: Compare HBAR exchange rates and fees to find the best price.
How to Store HBAR
Wallet Types for HBAR
HBAR uses Hedera's native account model (not ERC-20), so you need a wallet that supports Hedera natively:
- • Software Wallets: HashPack (Hedera-native), Blade Wallet, or multi-chain wallets like Exodus that support HBAR.
- • Hardware Wallets: Ledger supports HBAR natively. Hardware wallets provide the highest security for long-term holdings.
- • Custodial Wallets: Exchange wallets are convenient for trading but you rely on the exchange's security. Not recommended for large holdings.
Hardware Wallets
For the highest security, use a hardware wallet like Ledger or Trezor. Both support HBAR natively, allowing you to manage your tokens and stake directly from the device. Hardware wallets keep your private keys offline, protecting against online threats.
Hedera-Native Wallets
Hedera has its own native wallet ecosystem. HashPack is the most popular Hedera-native wallet, offering full support for HTS tokens, NFTs, staking, and dApp connectivity. Blade Wallet is another option focused on mobile accessibility. These wallets are purpose-built for Hedera's account model and provide the best integration with the network's services.
Protect Your Keys
When setting up a self-custody wallet, you will receive a seed phrase or private key. Write it down on paper and store it in a secure location. Never share it online or enter it on any website. If you lose your keys and your device is damaged, your HBAR will be permanently inaccessible.
How to Use Hedera (HBAR)
Tokenization (HTS)
Hedera Token Service enables creating fungible and non-fungible tokens natively without smart contracts. Use cases include asset tokenization, stablecoins, loyalty points, and digital collectibles — all at a fraction of the cost of Ethereum-based tokenization.
DeFi on Hedera
The Hedera DeFi ecosystem includes decentralized exchanges (SaucerSwap), lending protocols, and liquidity platforms. Hedera's low fees and fast finality make it attractive for DeFi activities where transaction costs matter.
Enterprise Applications
Hedera's Governing Council and enterprise-grade performance make it a top choice for business applications. Organizations use Hedera for supply chain tracking, audit trails, identity verification, and inter-company settlement. The Hedera Consensus Service provides tamper-proof timestamping for compliance-critical applications.
Supply Chain and Audit Trails
Hedera's Consensus Service provides tamper-proof, ordered timestamps for supply chain events, audit logs, and compliance records. Organizations use HCS to create verifiable trails that prove when events occurred and in what order — critical for regulatory compliance, food safety tracking, and provenance verification of physical and digital assets.
Staking HBAR
HBAR staking is native to the Hedera protocol. You can stake your HBAR to any network node directly from supported wallets without locking your tokens — staked HBAR remains liquid and can be transferred at any time. Staking rewards are distributed based on network parameters set by the Governing Council.
Risks
HBAR carries risks including: competition from other smart contract platforms (Ethereum, Solana), concentration of governance power in the Governing Council, patent concerns around the Hashgraph algorithm (owned by Swirlds), and the general volatility of cryptocurrency markets. The fixed supply also means no monetary policy flexibility in response to network growth or contraction.
Notable People Behind Hedera
Hedera's development has been driven by its founders and the leadership of its Governing Council.
Dr. Leemon Baird
Co-founder of Hedera and inventor of the Hashgraph consensus algorithm. Baird is a computer scientist and mathematician who holds a PhD from Carnegie Mellon University. He previously served as a professor at the US Air Force Academy and co-founded several technology companies. His invention of Hashgraph underpins the entire Hedera network.
Mance Harmon
Co-founder and former CEO of Hedera. Harmon has over 20 years of experience in technology and security, including executive roles at a US intelligence agency and as a senior executive at Ping Identity. He led Hedera from its founding through the mainnet launch and early growth phase, stepping down as CEO in 2024.
Charles Adkins
Appointed CEO of Hedera in 2024, succeeding Mance Harmon. Adkins brings enterprise technology leadership experience to the role, focusing on driving adoption of Hedera's services across regulated industries and expanding the network's global presence.
Regulation Overview for HBAR
Regulatory Overview
HBAR is classified as a cryptocurrency and is subject to the general regulatory frameworks for digital assets in each jurisdiction. Hedera's corporate governance structure — with a council of well-known multinational organizations — positions it favorably with regulators compared to more decentralized, anonymous projects.
Regulation by Country
HBAR's regulatory treatment varies by jurisdiction:
United States: HBAR is available on major US exchanges. The SEC has not classified HBAR as a security. Hedera's governance model and the fact that HBAR is used as a utility token for network fees may support its classification as a commodity, though regulatory clarity is still evolving.
Canada: HBAR is available on Canadian exchanges regulated by the CSA and FINTRAC. It is treated as a crypto asset subject to standard reporting and compliance requirements.
European Union: Under MiCA, HBAR would likely be classified as a crypto-asset (not an asset-referenced token or e-money token). Exchanges listing HBAR must comply with MiCA's disclosure and operational requirements.
Australia: HBAR is available on Australian exchanges regulated by AUSTRAC. It is treated as a digital asset for AML/CTF purposes. The government's proposed licensing framework for crypto asset service providers would apply to platforms trading HBAR.
Hedera's governance by a council of major corporations provides a level of institutional accountability uncommon in cryptocurrency projects. However, regulations continue to evolve, and users should verify current rules in their jurisdiction.
Enterprise Compliance Advantages
Hedera's corporate governance structure — with a council of well-known multinational organizations — positions it favorably with regulators compared to more decentralized, anonymous projects.
The council provides a clear accountability structure, and Hedera's permissioned governance combined with public network transparency gives enterprises confidence in regulatory compliance when building on the platform.
FAQs About Hedera (HBAR)
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