This article was first published on Metal Blog
While much is written about blockchain ecosystems and how they can be used to achieve consensus across a variety of sources, alternatives to blockchain technology aren’t as widely known. One project seeking to redefine how consensus is achieved is Hedera; using their unique hashgraph consensus mechanism, Hedera is redefining how consensus algorithms can work.
Dedicated to building the world’s first mass-adopted decentralized public ledger, Hedera is the brainchild of Dr. Leemon Baird’s work from back in 2012. Far along on their journey, Hedera is creating an ecosystem that involves cryptocurrencies, smart contracts, file services, consensus services, and decentralized applications. How does it all fit together?
Hedera’s hashgraph consensus algorithm allows data to be communicated, verified, and stored on all computers (or nodes) on the network. Data goes into the ecosystem through a node and is verified against other bits of data using the hashgraph network – similar to how a blockchain works, but without the need to store the entire history of the network on every transaction. This results in a leaner, quicker, more adaptable consensus algorithm than traditional blockchains.
Hedera’s native cryptocurrency – HBAR (ℏ)
HBAR has two main functions: network fuel, and network protection. First, let’s discuss network fuel. Anyone developing in the Hedera network will use HBAR to pay for network services; this might include operating a smart contract, storing information, or moving money. HBARs are used to pay for the cost of completing any type of action on the network, much like putting gas in your car to fuel the engine.
For network protection, HBARs are staked within nodes to provide that node with voting privileges. The more HBAR is staked within a node, the more that node’s vote is worth. This is known as “weighted voting,” and is designed to keep out bad ...
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