Hedera is a public distributed ledger that addresses the blockchain trilemma by offering high throughput, low fees, strong security, and decentralization through its unique Hashgraph consensus mechanism. Designed for enterprise adoption, Hedera supports various use cases—including DeFi, supply chain, and digital identity—while its native HBAR token powers transactions, staking, and governance. The network is governed by a global council of major corporations and aims to enable scalable, energy-efficient decentralized applications.
For years, blockchain networks have struggled with the trilemma: achieving decentralization, security, and scalability simultaneously. Most platforms excel at one or two, but not all three. This trade-off has made it difficult for enterprises, institutions, and governments to adopt public blockchains at scale. Developers designed Hedera to address this challenge. Built for real-world use cases, it offers high throughput, low fees, and strong security without sacrificing decentralization. In this guide, we explore the Hedera network, how it works, the role of HBAR, and its main use cases.
What Is Hedera?
Hedera is a Proof-of-Stake (PoS) public distributed ledger that supports cryptocurrency transactions, smart contracts, and decentralized applications (dApps). Unlike traditional blockchains, Hedera runs on a directed acyclic graph (DAG) called Hashgraph. Instead of processing transactions in a single linear chain of blocks, Hedera’s DAG structure verifies multiple transactions in parallel.
This design significantly improves speed, scalability, and energy efficiency compared to conventional blockchains. Hedera was built with enterprise adoption in mind and supports use cases across finance, healthcare, supply chain management, decentralized identity, payments, and tokenized assets such as stablecoins and central bank digital currencies (CBDCs).
Who Created Hedera?
Hedera was founded in 2017 by Leemon Baird and Mance Harmon, American technologists and co-founders of Swirlds Labs, the company behind the Hashgraph consensus algorithm. The Hedera Governing Council, a decentralized group of up to 39 global enterprises, governs the network. Council members include Google, Dell, and IBM. Each member operates a validator node and participates equally in governance decisions, ensuring no single entity controls the network. The HBAR Foundation supports the broader ecosystem’s development by accelerating adoption and funding applications built on Hedera.
How Does Hedera Work?
Hedera operates through three core components collectively known as Hedera Network Services.
Hedera Token Service (HTS)
HTS allows developers to create, manage, and transfer fungible tokens and NFTs directly on the Hedera network without relying on smart contracts. This results in lower fees and higher performance for tokenized applications.
Hedera Consensus Service (HCS)
HCS provides a trusted way to record and timestamp data on Hedera’s public ledger. Teams commonly use it for event logging, governance records, and supply chain tracking, where data integrity and ordering are critical.
Hedera Smart Contract Service
This service enables developers to deploy smart contracts using Solidity, making Hedera compatible with Ethereum tooling. It supports the development of decentralized applications across DeFi, gaming, and enterprise solutions. At the core of all three services is Hedera’s consensus mechanism: the Hashgraph Gossip Protocol.
Hashgraph Gossip Protocol Explained
Hedera’s consensus algorithm uses a gossip-about-gossip model, a form of distributed communication optimized for speed and fairness. Nodes in the network continuously share transaction information, a process known as gossiping. Each message includes cryptographic proofs of prior communications, allowing nodes to reconstruct the network’s transaction history independently.
This process results in:
Fast finality without mining
Fair transaction ordering based on timestamps
Strong security, resistant to malicious actors
Because the network reaches consensus virtually, Hedera avoids the energy-intensive mining used by Proof-of-Work blockchains.
Hedera Proof of Stake Model
Hedera uses a Proof of Stake (PoS) mechanism that differs from traditional staking systems.
Entire account balances are staked automatically to a chosen node
There is no token bonding or slashing
Validator nodes require a minimum stake of approximately 460 million HBAR, with a maximum cap of around 1.85 billion HBAR.
Currently, validator nodes are operated by members of the Hedera Governing Council, with the number expected to grow to 39 over time. Users can also participate through proxy staking, delegating their HBAR to a node and earning a share of network rewards without running infrastructure.
Hedera (HBAR) Use Cases
Hedera is designed for both public and permissioned applications, offering flexibility for enterprises and developers alike.
Key use cases include:
Decentralized finance (DeFi)
Payments and remittances
Supply chain tracking
Decentralized identity
Fraud prevention
Play-to-earn (P2E) gaming
Metaverse and NFT platforms
Stablecoins and CBDCs
The HBAR token powers the public network and covers transaction fees, smart contract execution, staking, and governance participation.
HBAR Tokenomics and Distribution
The network caps HBAR’s total supply at 50 billion tokens, pre-mints them, and releases them over a 15-year vesting schedule.
Token allocation includes:
23.9% for ecosystem growth and open-source development
22.26% for early investor purchase agreements
14.77% for network governance and operations
7.74% for initial development and licensing
31.33% unallocated, to be distributed based on future Hedera Council decisions
How to Use HBAR in Tangem Wallet
You can securely store and manage HBAR using Tangem Wallet. To add Hedera to your Tangem Wallet:
Open the Tangem app and scan your card
Tap Manage tokens
Search for Hedera
Tap the arrow next to the token name
Enable the desired network and tap Save changes
Scan the card again if prompted
Once added, tap HBAR on the home screen to view and copy your public address.
Frequently Asked Questions About Hedera
What Is the Purpose of the Hedera Network?
Developers designed Hedera to support decentralized applications across industries such as finance, healthcare, supply chain, payments, stablecoins, and CBDCs.
How Is Hedera Different From Traditional Blockchains?
Hedera uses a DAG-based Hashgraph consensus mechanism rather than a linear blockchain, enabling higher throughput, faster finality, and lower fees.
What Is HBAR?
HBAR is Hedera’s native cryptocurrency, used for transaction fees, smart contracts, staking, and network governance.
Can Developers Build dApps on Hedera?
Yes. Hedera fully supports decentralized application development, including Solidity-based smart contracts compatible with Ethereum tools.
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