Is Hedera Hashgraph (HBAR) A Good Investment?

Research 13 September 2022
Is Hedera Hashgraph (HBAR) A Good Investment?

Hedera, also known as Hedera Hashgraph, is the most used, sustainable, enterprise-grade public network developed for supporting a decentralized economy. Hedera is a completely open-source, proof-of-stake, public distributed ledger that, unlike the rest, doesn’t use blockchain technology. Instead, it uses the unique hashgraph consensus, patented by Hedera, meaning no one else can use it.

The project was founded by Dr. Leemon Baird and Mance Harmon, and it was funded through an ICO that took place in August 2018. After that, it launched open access to its mainnet in September 2019, and ever since then, it has been running quite successfully. As part of its ICO, investors were allowed to buy the platform’s native utility token, $HBAR at the lowest possible pricing.

The token itself plays two roles in the Hedera ecosystem, one of which is to fuel the network’s services, like file storage, regular transactions, smart contracts, and alike. The second use case is to help secure the network through staking, which basically means that users can lock up their tokens and receive regular rewards, while at the same time, they are contributing to the platform’s security and helping it maintain its integrity.

How Does Hedera Work?

1. Hashgraph Consensus Service

To ensure all the computers in its distributed network agree on its transaction history, Hedera Hashgraph uses the Hashgraph consensus mechanism, powered by two types of nodes. Consensus nodes determine transaction ordering and history, while mirror nodes relay this information to other stakeholders throughout the network. This differs from how most traditional blockchains achieve consensus, in which the state of the blockchain is determined by users who propose blocks to be added to the chain in a market competition open to anyone.

2. Hedera Governance

Hedera Hashgraph is governed by a body known as the Hedera Governing Council, which is charged with running the consensus nodes that determine transaction ordering. As of 2020, a total of 39 members sit on the council, including Google, IBM and Boeing. The council’s role is to manage the software, voting on changes, ensuring funds are allocated correctly and safeguarding the network’s legal status in various jurisdictions.

hedera governing council
Source : CoinLive

$HBAR’s Value

The supply of $HBAR tokens is fixed at 50 billion which was created when the network launched in 2018. Some HBAR tokens will be distributed through a process called “proxy staking”, in which any $HBAR holder will be able to lock their cryptocurrency in special contracts, allocating those funds to one of the approved nodes on the network.

By staking $HBAR with another node, users would gain the ability to earn a slice of the rewards and fees these computers receive from processing transactions on Hedera Hashgraph.

1. High Throughput

The Hedera network achieves 10,000 $HBAR cryptocurrency transactions per second, in a single shard and on-ledger, without compromising on network security or stability, while blockchains like Bitcoin and Ethereum can only do 7 and 15 TPS, respectively.

2. Low Fees

Hashgraph consensus is incredibly lightweight, allowing for the cost per $HBAR transaction to be very small, around $0.0001 which is practically zero-fee.

Hedera as A Third Generation Public Ledger

Bitcoin pioneered decentralized infrastructure and Ethereum brought programmability. But earlier proof-of-work blockchains consume massive amounts of energy and process transactions slowly in order to achieve acceptable levels of security. Heavy bandwidth consumption by these technologies leads to expensive fees, even for a simple cryptocurrency transaction.

The Hedera proof-of-stake public network, powered by hashgraph consensus, achieves the highest-grade of security possible (ABFT), with blazing-fast transaction speeds and incredibly low bandwidth consumption. By combining high-throughput, low fees, and finality in seconds, Hedera leads the way for the future of public ledgers.

hedera as a 3rd generation public ledger
Source : Hedera

Hedera’s Use Cases

1. Payments on Hedera

$HBAR offers organization an opportunity to embrace disruptive public distributive ledgers for payments in a secure and compliant manner. This would include settlement efficiency and creating liquidity for new and growing markets.

2. Fraud Mitigation

Hedera enables high-throughput, verifiable logging of business transactions, as well as decentralized identifiers that adhere to the W3C Decentralized Identifier (DID) standards, for any new or existing application. This ensures all participants are trusted and associated systems have a real-time view of transactions used for predictive analysis and detection of fraudulent activities.

3. Permissioned Blockchain

Permissioned blockchains offer a means to control the logic and sharing of information within a set of known and authorized parties. Popular blockchain frameworks, such as Corda, Hyperledger Fabric, and Quorum can connect to Hedera to achieve decentralized trust without exposing its contents. Using Hedera Consensus Service, for each update of the permissioned blockchain, a transaction hash is sent to the Hedera public ledger. This now immutable transaction hash ensures transaction information remains private while being fully auditable by authorized parties.

4. Identity

Credentials capture identity attributes, skills, and qualifications and so determine authorization to software and systems. Key moments in a credential’s lifecycle can be recorded using Hedera Consensus Service to add transparency and certainty for each stage.

5. Data Compliance

Hedera aims to amplify trust around data compliance by providing a publicly auditable log of actions taken and to provide tools to consumers to audit their own data. This would simplify auditing while removing 3rd party intermediaries.

6. Tokenized Assets

The Hedera Token Service enables the configuration, minting, and management of fungible and non-fungible tokens on Hedera with ease, without needing to deploy a smart contract. Custom tokens are as fast, fair, and secure as HBAR and cost less than $0.01 to transfer.

hedera ecossyystem
Source : Hedera


Taking all of the above into consideration, it would appear that $HBAR is a very promising investment and does have a lot of potential. Hedera will definitely keep growing and expanding its adoption. Even if the general public does not take better notice of Hedera anytime soon, huge companies are already working hand in hand with Hedera to better their operations. We will keep an eye on the development of Hedera and how it performs.

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