Hedera (symbol: HDRA) is a third-generation cryptocurrency currently in its ICO. It is vastly different from Bitcoin and Ethereum. It consists of a suite of decentralized applications, including; smart contracts, cloud storage, communications, an App Store, and much more, all rolled into one. Hedera’s consensus mechanism [a way of reaching an agreement between nodes on the network] is called Hashgraph. Other features include fast transaction times with 60 transactions per second.
Hedera Hashgraph aims to be the next-generation public network upon which developers will create decentralized applications that have bitcoin security but can reach a far greater scale thanks to high throughput and low latency times.
Background information about Hedera Hashgraph
Hedera Hashgraph is a distributed ledger technology developed by Swirlds, a software platform designed to build fully-decentralized applications. Hedera was founded as a for-profit company to make trustless public ledgers available for developers to build decentralized apps and services. The network claims highly secure performance along with throughput times of around 50 milliseconds. By comparison, Ethereum’s current average latency time is 20 seconds.
Hedera Hashgraph provides an alternative to blockchain technology that has more capabilities than bitcoin but has faster speeds and greater computing power. This makes it an ideal solution for many use cases, including currency exchange, gaming, file storage, and many others, including Facebook, Google, and IBM. They have shown interest in this technology.
Hedera claims that its decentralized network will allow developers to build applications that are more secure than those built with traditional blockchains such as bitcoin and far greater performance capabilities, which will be a serious advantage over the likes of Ethereum.
Technical information about Hedera Hashgraph
Hashgraph is a distributed ledger technology created by Leemon Baird, co-founder and CTO of Swirlds – a software platform designed to build fully-decentralized applications – which was invented specifically for distributed consensus, data integrity, and security. It offers a new approach to the Byzantine Generals’ Problem. Other features include low transaction fees, public, permissionless, trust-less, and open source. Hashgraph is a patented technology, unlike blockchain-related technologies such as bitcoin, which are currently in the public domain (although there is active research to develop patentable improvements using similar concepts).
Hedera Hashgraph consensus algorithm
The Hedera public network will use Hashgraph, a distributed ledger technology developed by Swirlds, a software platform designed to build fully-decentralized applications. Hashgraph offers an alternative to blockchain and promises far greater performance and security than existing technologies. Other features include fast transaction times with 60 transactions per second.
Hashgraph works by using a “gossip about gossip” protocol which spreads information between nodes very quickly. It runs on top of the real-time network using geographically spread out nodes, meaning there is no dependency on a single node for any one transaction. Hashgraph will allow Hedera to scale massively and achieve high throughput times with low latency.
Hedera Hashgraph ICO
The Initial Coin Offering (ICO) will raise capital to fund development costs of the ledger’s underlying software and other associated overheads such as marketing expenses etc. The funds raised will be held in an escrow account managed by Coinfund until the technology is released, at which time the Hedera Governing Council will manage it. The ICO will be conducted in various stages, including private sales, public presale, and crowd sales. Only accredited investors may participate in the private sale, with a minimum investment level of USD 250,000.
Exchanges for trading Hedera (HBAR) Tokens
Hedera (HBAR) tokens will trade on exchange markets shortly after the end of the ICO Presale stage. Please see below for up-to-date information: https://coinmarketcap.com/currencies/hedera/.
Allocation of HBAR tokens during the crowd sale
The majority (70%) of tokens will go to early adopters to provide an incentive to purchase, promote and support the network through proof of stake. This is seen as a fair way to distribute tokens compared with other ICOs, which have up to 90% allocated to presale investors looking for large profits at the expense of long-term network stability and growth.
The remaining 30% will go towards funding the ongoing operations of the Hedera governing council, i.e., marketing and legal expenses. Plus any overheads incurred during development leading up to the release of the technology, with 5% going to a contingency fund.
Additional considerations regarding Hedera’s ICO
As part of the ACA (Accredited Crowdsale Agreement), no more than 49 million (49m) HBAR tokens are available in the public presale and 50m during the crowd sale period, the number of public presale tokens equals approximately 5% of the total supply, which is considered a reasonable ratio for such sales. Please see below:
There will be no bonus or rebate given to any persons who purchase at either stage of the ICO, and tokens purchased by both private and institutional purchasers will be credited into their accounts at identical times; i.e., whether you buy at hour one or fifty of day one, your HBARs will appear in your wallet at the same time.
The funds raised in the ICO will be deposited into escrow accounts managed by Coinfund until such time that the technology is released when Governing Council will manage it (see below). The following percentages are estimates only and may change during development:
· 70% for the initial staking period (6 months) for network partners; major stakeholders/founders, developers, marketing, PR; this percentage may decrease over time. The maximum amount of tokens allowed to be distributed after six months has elapsed 50 million (i.e., 10% of total supply) unless otherwise provided for in an amendment to the Governance Document, which would require approval by the Governing Council and/or Masternode owners);
· 5% for contingencies (e.g., unforeseen expenses or shortfalls)
· 15% for the Hedera governing council to provide ongoing funding for marketing expenses, legal expenses, etc.
· 10% for the Company to use as they see fit.
Finally, regarding the token supply, terms like ‘max’ and ‘total’ are frequently seen in ICOs. While the total number of tokens in existence is fixed, the max number in any token generation phase may not be reached for several reasons. This includes an overall cap on how much funding is required, caps on individual investments during the ICO period, or a combination of both. This means that Hedera will not accept funds beyond the total value required for the completion and launch of our platform.