HBAR, is the cryptocurrency of Hedera Hashgraph, a blockchain focused on high-volume dApps, which has begun to gain ground within the crypto community and business world, thanks to its high speed, scalability, and ease of implementation.
Une of the fastest growing networks in recent years has been Hedera Hashgraph, a public distributed ledger technology (DLT) network, which allows people to interact and transact online efficiently and securely without the need for companies. from third parties, using the native HBAR token to perform these operations.
However, Hedera's primary goal is to provide a stable, high-speed, scalable, and reliable network for a wide variety of enterprise-grade and decentralized applications, not to provide cryptocurrency services as such. In other words, the existence of the HBAR token would only be a means of security and participation within the network, in order to interact with decentralized applications, build peer-to-peer (P2P) transactional models, and protect the network from malicious actors.
The main strength of this network lies in its Directed Acyclic Graph (DAG) design and its Hashgraph consensus protocol. These two elements are what allow superior levels of performance and security. In fact, transactions on Hedera are processed at speeds that are orders of magnitude faster than blockchains that use PoW or PoS. At Bit2Me Academy, we have a complete article dedicated to how Hedera Hashgraph works that can give you more information in this regard.
That said, all of the above means that developers and businesses can use Hedera's network services (from its cryptocurrency, smart contracts, archive, and Hedera Consensus Service) to build applications that run over the network. Decentralized applications (dApps) that can be massive and highly active, without the risk of the network not being able to serve their needs.
What is the HBAR token?
Hedera has HBAR as its native token, which has a total fixed supply of 50 billion HBAR, which was minted and placed in an account of Hedera Treasury, which manages the flow of tokens in the network. The Hedera Treasury is a group of people who have the ability to sign the release of tokens on the network, which they do through a group of multiple cryptographically secure, multi-signature accounts.
Thanks to this mechanism, HBAR tokens can only be transferred from a Treasury account to the network. However, this is only possible after said operation is approved by the majority of the members of the Hedera Governing Council. This ensures control over the network's cryptocurrency remains decentralized and vested in large, trusted entities.
At the beginning of the operation of HBAR, the Treasury releases 6,7 million HBAR so that the first users could test the network and all its functionalities. By September 16, 2019, the Council approves the public opening of the network so that anyone can create an account on the Hedera network, and any developer can build and deploy applications on the network. A few hours after that transition to “open access”, the Hedera Treasury began distributing HBAR tokens to SAFT (Simple Agreement for Future Tokens) holders, and in the following days some additional HBARs were distributed to employees, advisors, vendors and others. days. Also, HBARs appeared on exchanges, so developers and users could start buying them for use on the network. It was the beginning of the free commercialization of HBAR within the Hedera Hashgraph network.
Hedera's HBAR release plan provides for a slow and measured release out of the Hedera Treasury. At the time of writing, there are over 19,5 billion HBAR tokens in circulation.
HBAR Token Features
Like all tokens, HBAR has very clear functions, among which we find:
- Payment of commissions within the network. The HBAR token serves as "fuel" to pay for network services and incentivize nodes to contribute computing resources to the network. Fees in Hedera Hashgraph cost approximately $0,00001 per transaction, although the costs can be a bit higher depending on the smart contracts involved in the operation.
- Maintain network security. As Hedera moves towards permissionless nodes (decentralization), HBAR tokens will take a more important place in protecting the network against cyber attacks.
- Reward payments for the work of nodes within the network. These payments are currently controlled by Hedera. They are used for node reward payments to node hosts and proxy-staking reward payments to HBAR owners.
A curious point in the payment of commissions within Hedera Hashgraph is that it is divided into four parts:
- node commission. Every time a user or an application wishes to carry out a transaction on the network, it must send said transaction to a node, which will send the transaction to the network. By doing so, that node will spend resources and energy (albeit a small amount) and for those resources, this node will receive a small commission for its work. In this way, nodes are incentivized to take on this critical role. Node fees are paid from the end user's account directly to the account associated with the node sending the user's transaction to the network.
- network commission. Once a transaction is sent to the network, it is communicated to nodes that validate digital signatures, further communicate the transaction to other nodes and temporarily store it in their memory while the network reaches consensus. Users pay a network fee that compensates all participating nodes for calculating the consensus on the user's transaction. Computing resources consumed by this process may vary depending on the size of the transaction file and the number of digital signatures. Users pay Network Fees into an account controlled by Hedera that collects all Network Fees and Service Fees (defined below).
- Sevice commission. Service fees are paid by an end user to compensate the network for services associated with the transaction (for example, a cryptocurrency transfer, smart contract processing, file storage, or message ordering). For example, for a file service transaction, the network will charge a service fee corresponding to the amount of power and memory required to store a file based on its size and the requested duration of its storage on the network. In the case of a smart contract transaction, the service fee will be based on the processing power required by the network nodes to perform the calculation required by the smart contract. Service fees are paid by users to an account controlled by account controlled by Hedera which collects all Network Fees and Service Fees.
- Application fee (optional). Developers who build applications on top of the Hedera network may want to monetize those applications to compensate for the value they provide to end users. A wallet, for example, may choose to charge a small percentage of each deposit or withdrawal. A ride-sharing app that connects drivers with passengers without an intermediary may choose to charge a fee calculated as a small percentage of each trip made and paid for.
Uses of the HBAR token
Hedera is currently starting to take off in terms of the arrival of dApps to its network. Applications such as Carbon, Arbit or Tune.fm are just some of the dApps that you can currently use within this ecosystem. To access these uses you must first buy HBAR in an exchange like Bit2Me, where you can not only buy it but also store it and carry out operations. This way you can have your HBARs to use them in the media you want.
In this way you can access the different possibilities that Hedera offers you within its community. From payment services, stablecoin or CBDC building, tokenization, NFTs and digital identities, building custom applications on top of blockchain and global reach, healthcare, logistics and supply chain, all that and more can be built on top of Hedera.