What is Hedera (HBAR)?

The world of cryptocurrencies is diversifying with new projects every day. Sometimes we come across innovations that make us say, “Where did this come from?” Hedera is exactly one of these projects: it leaves the blockchain structure we are used to behind and emerges with a completely different architecture. The question “What is Hedera?” opens the door to understanding not only a cryptocurrency but also a different technological approach. In the rest of the article, we will examine many details, from the Hashgraph algorithm underlying Hedera to why this system is different from blockchain.

Definition and Origin of Hedera

While looking for an answer to the question “What is Hedera?” or “What is HBAR coin?”, we first need to understand the technology it is based on: Hashgraph. If you ask "what is Hashgraph technology"; Hashgraph’s main purpose is to offer higher speed, fair transactions, lower costs and security compared to traditional blockchains. Hedera emerges as a distributed ledger network that brings this technology to life. While data is chained in blocks in classic blockchain systems, Hedera prefers a different structure: Directed Acyclic Graph (DAG). This structure allows data to be processed in a much more flexible and parallel way, rather than linearly. Each transaction or “event” connects to others to form a graph. However, as the name suggests, this graph does not contain loops, meaning there are no repetitions in the past. In this way, the process constantly flows forward and efficiency increases. DAGs are defined as a method of organizing, representing and showing how a process progresses over time.

This architecture allows Hedera to be not only faster, but also to have a higher transaction volume. While transactions are processed sequentially and in a limited way in traditional chain structures, a large number of transactions can be executed simultaneously in the DAG structure. This makes Hedera a high-performance alternative. In short, in the DAG vs blockchain comparison, Hedera's Hashgraph aims to overcome some of the challenges faced by blockchains, especially in terms of speed, scalability, energy efficiency and low costs.

Hedera's founding vision is based on creating a sustainable, secure and scalable distributed ledger not only in technical terms but also in the entire ecosystem. Goals such as overcoming the bottlenecks experienced by blockchain systems in terms of speed and efficiency, and providing lower fees and energy usage are at the center of this vision.

This technological infrastructure is based on the Hashgraph algorithm developed by American computer scientist Dr. Leemon Baird. Baird is also the founder of a company called Swirlds together with Mance Harmon. Initially, this algorithm was patented by Swirlds, but in 2022, the Hedera Governance Council purchased these rights and made the algorithm open source under the Apache License. This allowed the technology to have a more transparent and community-oriented structure.

The native cryptocurrency of the Hedera network is HBAR. So what does HBAR do? The HBAR token has a very wide area of ​​use. It is used for various purposes such as running decentralized applications (DApps) on the network, paying transaction fees, staking to ensure the security of the network, and participating in governance processes. In short, HBAR acts as the fuel of the Hedera ecosystem. In terms of founders, the project is backed by Baird and Harmon, as well as Paul Madsen as technical leader. Sources such as Bittime describe Madsen as the project’s CTO and one of its founders. The overall vision is quite clear: Hedera aims to be the future “trust layer” of the internet.

Hedera’s History: Major Milestones

The Hedera story reflects the transformation of a technological innovation from an idea to a global, institutionally supported platform. It all began with the invention of the Hashgraph algorithm, and over time, with many critical developments, this innovative idea has evolved into a tangible infrastructure.

• Mid-2010s: American computer scientist Dr. Leemon Baird developed the Hashgraph algorithm, which could offer an alternative to traditional blockchain systems.
• 2015: Baird founded Swirlds Inc. with technology manager Mance Harmon. The patents for the Hashgraph algorithm were also protected by this company.
• 2016: The project took its first steps under the Hashgraph Consortium LLC umbrella. This period marked the completion of the seed investment process.
• August 2018: The Hedera Hashgraph network went live in private beta with the first Governance Council members. During the same period, the HBAR token was offered to the public, which is considered the official launch of Hedera.
• September 2019: Hedera's mainnet officially launched and the network became public.
• 2020: It was an important year in terms of technological developments. Google Cloud joined the Governance Council. At the same time, Hedera made its smart contract, consensus, file, and token services open source. The codebase was made available to the community in an "open-review" format.
• 2020–2023: During this period, the Hedera Governance Council continued to grow. Major institutions such as IBM, LG, Boeing, Deutsche Telekom, FIS Global, and Tata Communications joined the council. Hedera also introduced smart contract services compatible with the Ethereum Virtual Machine (EVM). In 2021, the Governance Council approved the establishment of the HBAR Foundation, an independent organization to support the growth of the Hedera ecosystem. Joined the EFTPOS governance council. In 2022, the Governance Council made the decision to purchase the Hashgraph Consensus Algorithm intellectual property from Swirlds, Inc. and open source the algorithm. The Hedera core codebase was made open source. Hedera's co-founder roles were reshuffled and the management team was transferred to Swirlds Labs. In addition, native staking and delegation for HBAR were gradually rolled out on the mainnet. Mainnet support for third-party EVM tools (JSON-RPC, Truffle, Hardhat, etc.) was launched. Stablecoin Studio (open source SDK) was launched for building stablecoin applications. Smart contract validation support was launched.
• 2024: Hedera Wallet Snap (MetaMask plugin) was launched. In September 2024, Hedera transferred the entire source code of Hedera Hashgraph to the Linux Foundation. These codes are now available as the open source and vendor-neutral Hiero project. This move coincides with the expansion of Web3 solutions, stablecoins, and enterprise use cases, as well as the growth of the overall ecosystem. During this period:
• Walltech signed a $3 billion luxury goods tokenization project,
• Developed a cross-border trade-focused partnership with Standard Bank Group,
• Safe Health Systems integrated Hedera technology for medical records management,
• Suku.world used Hedera in its supply chain finance applications,
• Animoca Brands partnered with Hedera to combat cheating in games.

Why Is Hedera Valuable?

Hedera is not only a technical alternative in the field of distributed ledger technologies; it draws attention with the solutions it offers in areas such as speed, efficiency, energy consumption and corporate governance. Developed against some of the fundamental limitations of blockchain technology, Hedera Hashgraph becomes a strong option for both individual and corporate users with the advantages it offers. Here are the issues that make Hedera valuable...

High Speed ​​and Efficiency: DAG Structure and Hashgraph Algorithm

Classic blockchain systems process transactions sequentially and in blocks. Although this structure provides security, it can cause serious limitations in transaction speed. Especially as the network becomes more dense, the confirmation time of transactions increases and performance decreases. Hedera, on the other hand, is switching to a completely different architecture to overcome this congestion: DAG (Directed Acyclic Graph).

The main difference of this structure is that it can process multiple transactions in parallel at the same time instead of sorting them one by one. Thanks to the Hashgraph algorithm, which works with a DAG structure, Hedera can reach a throughput of over 10,000 transactions per second (TPS). This figure is quite impressive when compared to Bitcoin’s 6–8 TPS and Ethereum’s around 12–15 TPS. Moreover, the transaction finalization time is also quite short: around 2–5 seconds. But most importantly, this finalization is not based on probability, but on mathematical certainty; once a transaction is confirmed, there is no turning back.

Category	Blockchain	Hedera Hashgraph
Programming Languages	Solidity, Vyper, Cadence, Java, JavaScript, Python, C++, C#, Go, Rust	Solidity, Vyper, Java, JavaScript, Go
Consensus Protocols	PoW, PoS, Delegated PoS, Proof-of-History, Proof-of-Authority, etc.	Hashgraph based on “Gossip about Gossip” protocol
Transaction Speed	7–50,000 transactions per second depending on platform and consensus mechanism	Up to 10,000 transactions per second
Smart Contracts	Immutable, generally non-upgradable	Immutable, optionally upgradable
Accessibility	Public, private, hybrid	Permissioned public system, plans to become fully permissionless
Security Mechanisms	Cryptographic hashing, blocks	Asynchronous Byzantine Fault Tolerance (aBFT)
Cryptocurrencies	Over 18,000 including BTC, ETH, XRP, ADA, SOL, DOGE, QTUM, DOT, TRX	HBAR

While blocks are created one by one in blockchains and added to the chain, in Hedera, all transactions are included in the ledger and none are discarded. While slowing mechanisms (such as PoW) are required against the risk of forking in Blockchain, such slowing down is not required in Hashgraph since nothing is discarded. This makes Hedera more efficient and faster in terms of Hedera network features.

Low Costs and Energy Efficiency

One of the most frequently criticized issues in the crypto world is energy consumption. Networks that use Proof of Work (PoW) mechanisms in particular can consume huge amounts of energy and threaten environmental sustainability. The Hedera consensus model is quite ambitious in this regard. Hashgraph's "gossip about gossip" protocol and virtual voting method provide secure and fast consensus without the need for miners or traditional validators. In this way, Hedera has a carbon-neutral crypto or even carbon-negative structure. This is one of the reasons why it has attracted the attention of companies that promote sustainability, such as Google.

Transaction fees are also quite low: usually under one cent, on average around $0.0001. Moreover, these fees are fixed and do not fluctuate according to network density. This predictability offers a serious advantage, especially for enterprise applications. Users know in advance how much their transactions will cost.

Enterprise-Level Governance and Security

Hedera takes an institutional approach to the concept of decentralization. Aiming to establish a system where “everyone has a say but no one has sole control,” the Hedera Governance Council consists of up to 39 globally operating companies. Giants such as Google, IBM, LG, Boeing and Tata Communications are among the members of this council. Thanks to this structure, decisions made on the network are made together on many issues, from software updates to fee structures, from treasury management to governance rules. Council members serve for fixed terms without a profit motive and have an equal say in ensuring the stability of the system. This model aims to minimize chaos that may occur due to individual interests or intra-community conflicts. With this structure, Hedera becomes an attractive platform for large enterprises and governments looking for enterprise blockchain infrastructure.

Hedera is also in a strong position in terms of security. The Hashgraph algorithm has a high level of security called Asynchronous Byzantine Fault Tolerance (aBFT). aBFT is considered one of the most mathematically secure protocols that can be achieved in distributed systems. Thanks to this structure, the risk of forking is eliminated and the network continues to operate stably. Hedera also offers ACID guarantees found in central databases, taking security and data integrity to the next level.

Wide Range of Uses and Services

Hedera is not just a crypto network; it is a platform that offers a comprehensive infrastructure for developers.

• Hedera Consensus Service (HCS): Allows applications to directly benefit from Hashgraph's speed and fair ranking advantages. It is ideal for reliable data recording, especially in sectors such as banking, healthcare and supply chain.
• Hedera Token Service (HTS): Provides enterprise-level tools for creating and managing both fungible tokens and NFTs. It appeals to large projects with its capabilities such as KYC, account freezing and supply control.
• Hedera Smart-Contract Service (HSCS): Supports smart contracts written in Ethereum’s Solidity language and is EVM compatible. This allows fast and low-cost applications to be developed in areas such as DeFi, gaming, and identity management.

These services and Hedera’s underlying technological advantages allow the platform to find wide use in various areas such as NFT, DeFi (decentralized finance), decentralized identity (DID), data verification and audit trails, payments, and supply chain management. The platform is suitable for both enterprise-level applications and individual users.

The Role of HBAR Token

The HBAR token’s usage is not limited to paying transaction fees. It is a versatile token that performs many critical functions from security to governance. Users can secure the network with HBAR staking and earn rewards in the process. This system creates a security model similar to Proof-of-Stake (PoS). In addition, token holders will have the opportunity to participate more directly in governance processes in the future.

The total supply of HBAR is limited to 50 billion tokens. This limit aims to maintain long-term value while also keeping the token economy stable. The supply in circulation increases gradually and in a planned manner. This planning prevents any individual or organization from accumulating a large amount of HBAR and affecting the network, while also allowing the price to be determined by natural market conditions. We can summarize the functions of HBAR as follows: It provides payment for low transaction fees on the Hedera network, provides network security with staking, is a payment tool for transaction fees for KCS, HTS and HCSC in the decentralized application (dApp) ecosystem, is important for governance participation, its supply is opened at certain times and the effort to transform towards a completely open and permissionless network underlines the value of the token. The HBAR price also plays an important role in the value of the network. HBAR is traded at $ 0.18 as of May 2025. It recorded its all-time high in September 2021. The record level was seen around $0.57.

Who is the Founder of Hedera?

Behind Hedera Hashgraph, there is a strong team that acts not only with technical knowledge but also with a visionary approach. The answer to the question of who is the founder of Hedera includes two main names and a CTO.

The first name that stands out is Dr. A.S. Leemon Baird, the inventor of the Hashgraph algorithm. Baird, who has a doctorate in computer science from Carnegie Mellon University, has been working on artificial intelligence, cybersecurity and distributed systems for over 20 years. He served as a professor of computer science at the US Air Force Academy and has also worked as a senior scientist in many technology companies. The Hashgraph algorithm he developed offers a much more efficient solution to the problems faced by blockchain technology such as speed, cost and security.

Next to Baird is Mance Harmon, another co-founder of Hedera. Harmon is a leader who has undertaken strategic roles in product security, cyber threat simulation and public services in the technology sector. Harmon, who founded Swirlds with Baird, also served as Hedera’s CEO for a long time. He has a vision that Hedera will not only be a short-term technology project, but also one of the foundations of trust in the digital world in the long term.

One of the names that later made technical contributions to the team was Paul Madsen. Madsen, an expert in software engineering and cybersecurity, joined the project as Hedera’s CTO. His contributions play an important role in making Hedera’s technical structure robust, scalable and developer-friendly.

These three names not only established the technological infrastructure; they also shaped the governance model that would put the project’s decentralization approach on an institutional basis. However, Hedera’s future is not only in the hands of these founders. The Hedera Governance Council, which consists of global companies from different sectors, determines the project’s course. This structure aims to implement decentralization in a more sustainable and stable manner.

Frequently Asked Questions (FAQ)

Below, you can find frequently asked questions and answers about Hedera:

• What is HBAR, how does it work?: HBAR is the native cryptocurrency of the Hedera network. It has functions such as paying transaction fees, running decentralized applications, staking, and participating in governance processes. Every transaction on the network is carried out with HBAR.
• What is the difference between Hedera Hashgraph and blockchain?: Instead of blockchain, Hedera uses the DAG (Directed Acyclic Graph) structure and the consensus algorithm called Hashgraph. In this way, transactions are carried out in parallel, much faster and more energy-efficiently. There is also no risk of fork.
• Can HBAR be staked?: Yes, HBAR tokens can be staked on the network. Users contribute to network security by assigning their tokens to certain nodes and can earn rewards in return.
• Is Hedera's energy consumption low?: Yes, it is quite low. The Hashgraph algorithm is energy efficient as it does not require mining or heavy processing power. Hedera is a carbon neutral network.
• What is the HBAR token supply?: The total HBAR supply is limited to 50 billion tokens. This supply will gradually enter circulation over time. The planned distribution model maintains the supply-demand balance and supports price stability.
• Is the Hedera network secure?: Yes. Hedera uses a highly secure algorithm such as Asynchronous Byzantine Fault Tolerance (aBFT). In addition, its governance model is overseen by globally recognized companies and provides enterprise-level decentralization.

Don’t forget to follow our JR Kripto Guide series to discover projects working with Hedera and Hashgraph technology!