Hedera Hashgraph (HBAR-USD) is an enterprise-class, energy-efficient, fast, and scalable public network. Hedera is not a typical blockchain project; It runs a completely different network architecture than a blockchain.
Blockchain networks are the most popular implementations of distributed ledgers Technology (DLT). DLT is a distributed system for storing and sharing records between network nodes without a central data source or authority in the network. Blockchain networks have been faced with the “blockchain trilemma,” which is the belief that a blockchain network can only effectively deliver two of these three benefits in terms of decentralization, security, and scalability. Layer 1 blockchains are in a race to solve the “blockchain trilemma”.
Hedera uses a DLT known as a hashgraph. A hashgraph uses a directed acyclic graph (DAG) in its architecture, as opposed to a blockchain, which stores data in an append-only linear pattern called blocks. According to Hedera, the hashgraph enables decentralization, high security and high scalability. In both a blockchain and a hashgraph, each node in the network gets an exact copy of the data, guaranteeing immutability.
Hedera’s technology and governance
Hedera uses the “gossip protocol” to transmit transactions and reach consensus. When a node on the network receives new data, it randomly selects another node on the network and shares that new data; the next node to receive the new data also randomly chooses another node. This process is repeated until all nodes in the network have the new data. When the sharing of data with peer nodes is complete and finite, an event is created and timestamped in a data structure.
Hashgraph technology solves the same problems as blockchain technology. However, hashgraphs tend to be faster in transaction processing. The Hedera network can process over 10,000 transactions per second. Transactions on Hedera are finally confirmed within three to five seconds.
There are no miners in Hedera; Therefore, transaction fees are usually very low. Network congestion also doesn’t impact transaction fees, unlike proof-of-work blockchains, where a busier network means a higher transaction fee. The very low fee for processing transactions on Hedera makes it attractive for enterprise use and for developing mission-critical applications.
Hedera Hashgraph claims that it has achieved the highest level of security that a cryptocurrency product can achieve. Transactions on the Hedera network are encrypted using TLS 1.2 and the hash graph consists of cryptographic hashes.
Hedera is energy efficient and doesn’t require the heavy mining resources that proof-of-work blockchains require. According to data from Hedera’s official website, the amount of energy consumed in processing one Hedera transaction is 0.00017 kWh.
Blockchain says it aims to achieve a truly decentralized governance model. Hedera elects a group of leading global organizations committed to supporting the development and growth of the Hedera network; This group forms the Hedera Governing Council. Some members of the Hedera Governing Council are Boeing, Google, Microsoft, IBM, LG, Ubisoft, Standard Bank and Tata Communications. The main responsibilities of the Hedera Governing Council members include hosting and maintaining the initial network nodes and ensuring the stability of the network.
The HBAR token
HBAR is the native, low-power token of the Hedera network. HBAR was pre-minted during the launch of the Hedera network. There is no retrospective need to mint tokens on the Hedera network. The unreleased supply of pre-minted tokens is held in the Hedera Hashgraph Council account. HBAR has a maximum total supply of 50,000,000,000 tokens.
HBAR serves two specific functions within the Hedera network:
Paying Network Fees: HBAR is used to pay fees for activities such as minting and broadcasting NFTs on the Hedera network. Hedera uses the fees to compensate nodes for providing storage, processing power and bandwidth on the network.
Staking: HBAR is used to build consensus and protect the network from cyber attacks. Hedera plans to allow nodes that are not part of the Governing Council to run and stake HBAR tokens in the future.
NFTs on the Hedera Network
The low minting fees of NFTs on Hedera has led to organic growth and the launch of NFTs on Hedera. Minting fees are flat rate, pegged to the dollar and paid in HBAR. Artists and collectors know exactly what to expect in terms of fees. For example, minting an NFT collection costs $1; while it costs $0.01 to transmit an NFT; These are very low fees compared to fees on blockchains like Ethereum, Solana, and Tezos.
HashAxis, Zuse Market, and Turtle Moon are some of the most popular marketplaces for exploring and buying NFTs on Hedera.
Hedera’s partners are industry giants with years of experience in software development, banking, aviation, telecommunications and other industries. Many in the broader cryptocurrency community see Hedera’s Governing Council as a centralized force. Therefore, their claim to decentralization is often questioned. Keep in mind that no single entity on the Governing Council can take control of the Hedera network. Interesting projects with real, everyday use cases are built on top of Hedera.
EWT allows us to set a price target for HBAR.
In the table above you can see my high-level count from HBAR. Following the conclusion of wave 1 in 2021, we saw an ABC correction with a B that actually took us to new highs. Now HBAR is finding support at the last possible level, the 88.7% retracement. This means that we should see a trend reversal soon and HBAR should complete five waves into our target region 3.
If we take the length of wave 1 and measure from the bottom of wave 2, which we’re not sure about yet but expect to be close, then the target price for wave 3 should be around $0.79, where the 1.618 ext would lie land. Of course, keep in mind that it may take some time to reach this level.
Hedera Hashgraph is unique and has one of the strongest supports in the cryptocurrency industry. I believe that Hedera’s plan to allow non-Governance Council nodes as part of the network in the future will quell the critics and will undoubtedly make the network more decentralized. Most of Hedera’s partners have a very large user base. Its partners such as Google (GOOGL) and IBM (IBM) are expected to launch products or integrate Hedera into their existing products. Google Cloud is the primary provider for the Hedera Consensus Service ecosystem, and IBM sits on the Hedera Council.
Once Hedera shows its true word potential, I believe it will most likely see mass acceptance.