What is Hedera?

The blockchain technology continues to spread by discovering an increasing number of new use cases fueled by the ideas of decentralisation and inclusion of the financial system. However, not all distributed ledger technologies (DLTs) are built the same. One example is Hedera, a public network powered by a unique consensus mechanism called Hashgraph which offers an alternative to traditional blockchains.

Hedera is a decentralised public network designed for fast, fair, and secure digital interactions. Unlike most blockchain networks, Hedera does not rely on commonly accepted proof-of-work or proof-of-stake mechanisms. Instead, it uses a consensus algorithm called Hashgraph, a form of asynchronous Byzantine Fault Tolerance (aBFT), to achieve high throughput, low fees, and ensure finality in seconds.

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As the underlying infrastructure for a growing range of enterprise and public applications, Hedera plays a significant role in the evolution of DLTs. It is governed by a rotating council of global enterprises, ensuring that decision-making remains decentralised and transparent.

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Its native cryptocurrency, HBAR, powers network services including smart contracts, file storage, and consensus. Hedera’s architecture allows for fast, secure, and low-cost transactions, characteristics that make it particularly attractive for industries ranging from finance to sustainability. Hedera whitepaper can be accessed here.

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Hashgraph: A Different Approach to Consensus

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At the heart of Hedera lies the Hashgraph consensus algorithm, developed by Dr Leemon Baird. Unlike a regular blockchain, which adds blocks of transactions sequentially, Hashgraph employs a Directed Acyclic Graph (DAG) structure. This allows multiple transactions to be processed in parallel, drastically increasing throughput and reducing latency.

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Two fundamental Hashgraph concepts are: ‘gossip about gossip’ and ‘virtual voting.’ The first one, ‘Gossip about gossip’ refers to nodes sharing not just transactions but also information about how and when those transactions were received. Over time, this forms a history that all nodes can verify. Meanwhile, ‘Virtual voting’ enables nodes to deduce consensus on transaction order without broadcasting additional messages, a method that boosts both speed and bandwidth efficiency.

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Compared with Ethereum or Bitcoin, Hedera’s architecture offers key advantages. Bitcoin processes around 7 transactions per second (TPS), Ethereum handles approximately 30 TPS (with Layer 2 scaling solutions), whereas Hedera consistently achieves over 10,000 TPS. This scalability, combined with almost instant finality, makes the Hedera network particularly well-suited to real-time enterprise applications.

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What is HBAR?

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HBAR is the native cryptocurrency of the Hedera network. Unlike some highly volatile cryptocurrencies that are used primarily for speculation, HBAR is designed with utility in mind. It underpins applications in sectors such as supply chain, carbon markets, payments, and identity.

The total supply of HBAR is capped at 50 billion, with gradual releases managed by the Hedera Council. 

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The HBAR utility token serves two primary functions:

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• Transaction Fees: Users pay a small amount of HBAR to perform operations on the network, such as transferring tokens, executing smart contracts or writing data.

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• Network Security: HBAR is used to prevent spam and secure the network, especially as Hedera moves toward a more permissionless node structure.

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When users interact with the Hedera network, whether transferring tokens, minting NFTs, or executing smart contracts, they pay small transaction fees in HBAR. These fees are predictable and low, typically costing a fraction of a cent. This makes HBAR especially useful for enterprise-grade applications that require speed, scalability and cost-efficiency.

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HBAR has also been used as a funding mechanism for ecosystem development, including grants from the Hedera Foundation to support projects building on the network.

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Key Organisations Supporting the Hedera Ecosystem

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The Hedera ecosystem is supported by a network of distinct yet interrelated entities, each contributing to the platform's development and governance:

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• Hedera Hashgraph, LLC: The original developer of the network's core technology, responsible for its initial creation and ongoing maintenance.
  
  
• The Hedera Council: A decentralised governance body composed of up to 39 leading global organizations from diverse sectors, overseeing network policies, software updates, and treasury management.
  
  
• Hedera Foundation: Formerly known as the HBAR Foundation, this independent organisation was established in 2021 with an initial allocation of 5.35 billion USD of HBAR to offer grants and strategic support to projects developing on the Hedera network.

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• Hashgraph Association: A Switzerland-based non-profit organization focused on fostering enterprise adoption and public-private partnerships, particularly in regulated markets.
  
  

Together, these organizations coordinate to ensure Hedera's sustainable, decentralised, and enterprise-ready evolution.

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What is the Hedera Foundation?

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The Hedera Foundation is an independent organisation that supports the growth of the Hedera ecosystem. Established in 2021, it was initially funded with 5.35 billion HBAR, valued at approximately $2 billion at the time of allocation, from Hedera’s treasury, which it uses to offer grants, investments, and technical support to projects building on the network.

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The foundation focuses on advancing adoption across key sectors such as finance, sustainability, gaming, identity, and tokenisation. It works with developers, start-ups, and enterprises, helping them integrate Hedera’s technology through funding, mentorship, and strategic partnerships.

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While the Hedera Council oversees the operation and governance of the network itself, the Hedera Foundation is dedicated to ecosystem enablement. It also partners with accelerators, universities, and industry groups to drive education and innovation in distributed ledger technology.

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The Foundation has launched several initiatives, including the $100 million Sustainable Impact Fund, which supports projects focusing on environmental sustainability, such as carbon offsetting. Additionally, it has established a $250 million Metaverse Fund aimed at enhancing consumer brand adoption of tokenised Web3 applications.

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Hedera’s Governance Model

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Hedera’s governance is steered by a Council composed of up to 39 organisations from diverse sectors and geographies. This council is responsible for maintaining the codebase, approving updates, and ensuring network stability. Members serve limited terms, preventing long-term control by any single entity.

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Notable council members include Google, IBM, LG, Standard Bank, Boeing, and Deutsche Telekom, covering industries such as finance, telecommunications, manufacturing, and technology. Each member operates a mainnet node, contributing to both network decentralisation and resilience.

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This council-based approach differs markedly from other DLTs, where governance can be either opaque or dominated by a small group of core developers or miners. By combining enterprise-grade oversight with rotating membership, Hedera ensures accountability without compromising decentralisation.

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‘The Governing Council was designed to bring stability and expertise to the ecosystem while avoiding the pitfalls of centralised control.’ 

Mance Harmon, Co-Founder of Hedera

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What is the The Hashgraph Association (THA)?

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The Hashgraph Association is a non-profit organization based in Switzerland, established in December 2021 with the mission to foster the adoption and development of decentralised applications (dApps) on the Hedera network. Founded by Kamal Youssefi and Stefan Deiss, the association was created in collaboration with the Hedera Council and the Swiss government, particularly the Canton of Schwyz. 

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It was officially launched in April 2022 with the introduction of the Hashgraph Innovation Program, a global initiative aimed at empowering startups, enterprises, and governments to develop and deploy enterprise-grade solutions on Hedera.

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Hedera Real-World Impact and Case Studies

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The Hashgraph Association has played a pivotal role in supporting various projects across different sectors:

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• SaucerSwap: A decentralised finance (DeFi) platform that leveraged the low fees and fair transaction ordering of the Hedera network to enhance user experience and establish itself as a leading DeFi platform.
• Circle of Games: A gaming ecosystem that utilised Hedera's technology to develop a secure, scalable, and immersive platform, aiming to onboard a global audience to Web3 .
  
  
• WISe.ART: A digital art platform that transitioned to a full Web3 version using Hedera's functionalities, strengthening its growth and expanding its reach in the digital art space.
  
  
• BankSocial: A social banking platform that received guidance, mentorship, and advisory services from the Hashgraph Association, aiding in its development and success.
  
  

Additionally, the association has partnered with Taurus, a digital asset infrastructure provider, to advance secure custody, staking, and tokenisation of Hedera's HBAR cryptocurrency globally, making the ecosystem more accessible to banks and enterprises.

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Through these initiatives, the Hashgraph Association continues to drive the adoption and development of decentralised technologies, empowering a diverse range of industries to leverage the capabilities of the Hedera network.

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Hedera Use Cases and Adoption

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Hedera supports a growing list of real-world applications, particularly in sectors demanding transparency, speed, and scalability. Hedera’s architecture makes it suitable for a broad range of decentralised use cases.

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• Supply Chain Management: Avery Dennison’s atma.io platform uses Hedera to track over 22 billion items in real-time.
• Tokenised Carbon Credits: Projects like DOVU and REGEN Network utilise Hedera’s efficiency for sustainability tracking and offset markets.
• NFT Platforms: Ecosystems like HashAxis and Calaxy offer low-cost NFT minting with high transaction finality.
• Financial Services: FIS Global leverages Hedera for cross-border remittances and settlement.

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Institutional partners have also built key infrastructure on Hedera. The United Nations has explored carbon market integrations using the network, while ServiceNow uses it to power verifiable digital credentials. To explore the growing network of projects and organisations building on Hedera, visit the Exponential Science Hedera Ecosystem Map here.

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Security and Sustainability of Hedera

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Hedera achieves asynchronous Byzantine Fault Tolerance (aBFT), a highly secure consensus model that ensures that even if some network participants are compromised, the ledger remains trustworthy. This property is mathematically proven and offers one of the strongest security guarantees among public DLTs.

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From a sustainability perspective, Hedera is one of the most energy-efficient DLTs in operation. It consumes approximately 0.00017 kWh per transaction, far below Ethereum (≈ 0.79 kWh) or Bitcoin (≈ 707 kWh pre-merge). This low carbon footprint has been independently verified by the UCL Centre for Blockchain Technologies and other institutions.

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Hedera represents a significant evolution in distributed ledger technology, offering a distinct alternative to both permissioned enterprise blockchains and fully decentralised but less efficient public ledgers. Its use of the Hashgraph consensus model delivers mathematically secure, scalable performance, while its transparent, decentralised governance structure ensures stability and trust.

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This combination of technical efficiency, institutional-grade governance, and low energy consumption positions Hedera as a future-ready infrastructure for digital innovation. Rather than replicating traditional blockchain models, Hedera offers a balanced approach, combining the reliability enterprises demand with decentralised principles that support open participation.

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Its growing adoption across sectors such as finance, sustainability, and digital identity highlights its real-world relevance. More than a network, Hedera is establishing itself as a foundation for the next generation of secure, scalable, and socially responsible digital ecosystems.

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