What is Hedera Hashgraph? HBAR Explained with Animations

hedera is a public network similar to the internet and all those different type of blockchains we've talked about in the past and hedera specifically runs on a hashgraph form of technology which is a relatively new type of data management that uses proof-of-stake consensus mechanism now that may sound really really technical to you but by the end of this video I promise you'll know exactly what it means welcome to whiteboard crypto the number one YouTube channel for crypto education here we explain topics of the cryptocurrency world using analogies stories and examples so that anyone can easily

understand them in this video we're going to be explaining what hedera hashgraph does how their token h-bar actually works who the team is that developed it and the tokenomics so that you can better make predictions about them so jumping right in the internet is a public network where anyone can create content and share it with anyone else most people have a basic understanding that the internet is basically just shared information but few people who use the internet actually know how it works and that's completely okay just like we don't need to understand how all the

pieces of a car work to drive it we don't need to completely understand how the internet works to use it still it wasn't always as easy to create and share content as it is today different types of Technology have been introduced to help people build on the internet more easily hedera is creating a suite of tools that will supposedly make it easier to build on a new type of decentralized network that they call hashgraphs so this brings us to the first big question what is a hashgraph before we can understand what hedera does we have

to understand something called hashgraphs the information sharing technology that hedera uses if you're familiar with blockchains you may know about something called the blockchain trilemma of decentralization security and scalability basically this trilemma means that one blockchain cannot solve all three of these problems usually it can only solve two very well and the third one is lacking hashgraph technology however supposedly can it does this because hedera isn't even a blockchain in fact it uses a special type of Technology called a dag which stands for directed a cyclic graph that orders transactions shared on the network now

it's a little complicated but if you know how Iota works hedera is quite similar also similar to a proof-of-stake blockchain hashgraph technology utilizes nodes where anyone can host a known that will help maintain the network now you might be wondering what the heck's a node well a node is usually some software that stores and updates the transactions and The Ledger on someone's computer so theoretically even you could be a node now what a hashgraph does is make sure that every event on the hashgraph shows up in The Ledger which can be a transaction it could

be a message a smart contract any other form of information sharing and it usually has these four things number one a timestamp of when the transaction reached The Ledger number two the transaction itself whatever that transaction was number three the hash of the last message created by the node and number four the hash of the last message created by the node that sent them this message as an example to make that a little easier to understand we can think about out like a phone call as an event if you call your friend over the phone

the phone keeps track of when you received that call then you tell your friend about an awesome new video game that you bought which this might be the content of the transaction you also tell your friend that you actually called your brother and told them first so now your friend knows four different things they know what time you called them they know what your message was they know who you talked to before talking to them and they also know what they did before you called them so maybe they talked to a friend about something else

this is basically what a hashgraph is doing it's keeping track of all of this information for each person or node that they send and receive okay but what about if you lie to your friend about who you spoke to before them what if you actually spoke to your sister instead of your brother but you didn't want your friend to know that because maybe they don't get along or something this is actually a really big concern when it comes to information sharing especially when it has to do with money because what if I'm trying to buy

something but someone else claims that they bought it first well the thing is my sister would know that I call called her first and whoever she spoke to after that would also have the information because remember they also get the information about who she talked to last the time stamps that are a part of every message show the event of her talking to me happened before the event of me talking to my friend or her talking to her friend so overall every single node or in our example every single person gets a copy of all

of these events so every person has exactly the same information very similar to a blockchain but in the actual hashgraph technology all the contents of the messages are actually hashed to keep private and encrypted so you can't actually tell what these messages say you just know that they're there this way your friend wouldn't know actually who you talked to or what was said just that you did indeed talk to someone at a specific time as I mentioned earlier Iota also uses a dag and the way that they make sure their notes aren't lying and that

there is one single seamless list of transactions is that they use something called a coordinator which is quite controversial but it basically means that it's quite centralized hedera does something similar except they call it the gossip protocol in fact the system of one node telling another node about even another node has been dubbed the gossip protocol by hedera and it's very much like gossip in middle school where nodes are always sharing transaction data similar to middle schoolers sharing the latest gossip so since all of this gossip is in the form of hashes and hashgraph uses

a dag which stands for directed a cyclic graph you can see where hedera came up with hash graph the messages are hashed in the form of a network is technically a graph but what about that lying I mentioned earlier what about gossip that isn't real or maybe gossip that is manipulative can hedera solve fraudulent transactions or gossip as a fun fact the way that the math works out is that with a hashgraph two-thirds of all nodes need to have the same information and agree on it for the transactions to continue with a blockchain 51 percent

of nodes need to agree on the information this 51 number is a number that gets thrown around a lot in the crypto world because people are concerned about bad people taking over control of the network so far no one has actually reached and maintained 51 control in a blockchain right now while hedera is still in development there are only 39 companies that host nodes on its hashgraph Network so honestly it wouldn't be too hard to get a group of them to agree to do something malicious they do say though that as the network grows and

becomes more robust in terms of security and performance hedera will open node operations to more companies and even eventually individuals okay so that's what a hashgraph does hashgraphs are patented which is personally something I don't like seeing in decentralized technology and it basically means that only hedera hashgraph can use this technology nobody else can well let's get into who is hedera hashgraph and what do they specifically do so hedera hashgraph is actually a company based in Dallas Texas and founded by the inventor of the hashgraph technology Lehman Baird and his business partner Mance Harmond hedera

is like I mentioned earlier technically owned by 39 entities of which you might recognize some like Google Boeing IBM LG and Ubisoft are just a few now the board of directors and management team are all doxxed basically meaning that you can find out all kinds of information about them if you want to they're not Anonymous despite all these being companies that protect their use of patents they've apparently voted to make the hashgraph algorithm open source at some point but we'll let you know when that happens basically hedera is a company that has created several services

to help developers build applications on their hashgraph mainnet and they do all this with the intent that companies and people all over the world can have easy access to this technology they believe that blockchain technology is too complicated that it's too slow and it's insecure for widespread adoption I don't know if I agree with that but they think hashgraphs solve the speed and security issues so these services that hedera offers are there to help the use of it become less complicated now they do have three main Services the first is the consensus service which this

is used to post messages on the hashgraph for time stamping and ordering the second service they have is the Smart contract Service and this helps developers create programs with a solidity code and number three they have something called a token service which allows applications to perform transactions anyone can access these Services you don't need to host a node to use hedera services and in fact currently you can't host a note anyway even if you wanted to one thing I do like about hedera is that there are already hundreds of applications running on hedera these include

D5 applications stable coins decentralized exchanges and nft marketplaces there's even some games being developed on it however since they use an evm which is short for ethereum virtual machine almost any application built on ethereum can easily be moved over to the hashgraph network speaking of evm and defy I'm actually working on a project right now that'll actually teach you how to write solidity code and eventually develop a portfolio of web3 applications if you want early access to this program I'm only letting in a certain number of people to the first group and if you've made

it this far into my video during a bear Market I know that you're serious about the technology of web3 you can head over to whiteboardcrypto.com or use the link in the description below to join the the waitlist this web 3 bootcamp that I'm calling it should be out really soon and I'm super excited to help out the first round of developers create some new daps and actually get web 3 jobs anyways back to hedera anyone can access hedera's services and the ecosystem being built on top of it by using hedera's native token h-bar let's get

into the hbar token h-bar is used for two things as fuel for transactions and to secure the network by staking to nodes so this is pretty common just like I need United States dollars to make transactions in the US or that ethereum users need eth to make transactions on the ethereum network hedera users need hbar to perform transactions on the hedera hashgraph hbar is used by developers as well as people that use the apps and services on hodera like you and me now even though you can't host your own node anyone can get some rewards

by staking their hbar and if you don't know what that means you should check out our video about staking to understand how it provides network security but basically instead of using a proof of work instances mechanism HBO uses a proof of stake consensus mechanism one note here for experienced viewers that know how the normal proof of stake mechanism works is that hbar doesn't have slashing which means if there's a bad actor and they're proven to be a bad Staker they don't get their token slashed or taken away I wonder if this is because the big

tech companies don't want that risk because the reasoning behind it is basically that slashing doesn't work this on top of hedera's documentation also mentioning that it might only take a third of the network to perform an attack is kind of alarming oh and another thing about their staking mechanism technically this is not a proof of stake consensus mechanism it is what is called a delegated proof of stake because you are giving your voting power to one of the main net nodes who votes for you one of the 39 big companies this is important because you

can't actually make your own votes you can only give your power to someone else who votes for you moving forward transactions and tokens on hedera achieve up to 10 000 transactions per second in comparison ethereum can only handle about 12 transactions per sec with their current infrastructure the cost per transaction on hedera is always point zero zero zero one dollar which is something I've never seen before this means it's paid to the United States dollar so even if hbar triples in price or the network gets super congested the transaction cost is the same transaction costs

are paid in h-bar but they're always equal to point zero zero zero one dollars the h-bar token was originally released in 2018 in a private funding round and there will only ever be 50 billion hbar tokens minted we call this a total Supply cap right now there are around 23 billion hbar tokens in circulation which is a little under half and because of this it's probably going to be inflationary for a while another interesting thing I found is that currently there are 800 000 transactions per day and over 1.1 million accounts in comparison polygon has

three million transactions per day and 175 million unique accounts so in its user base hedera is still quite small it is always a good thing to see that you can purchase them on major exchanges though like binance and kucoin and I've heard rumors of them being added to coinbase soon as I wrap this video up it's neat to see a new type of Ledger technology that claims to solve all the problems we're seeing in the blockchain but we need to note that even though they claim to be decentralized only 39 major corporations are currently hosting

nodes which is not decentralized it would also take far less for a malicious person to take over the network or cause major problems so I'm not really sure that it can live up to its claims but I guess we'll see if time tells wrapping this video up if you want to learn more about that web 3 boot camp that I plan on launching pretty soon don't forget to sign up to the wait list in the link below thanks for watching I hope you learned something and most of all I hope to see you in our

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