Traditional cryptocurrencies have been around since 2009 when Bitcoin first launched. Innovative and original, it sparked a trend among investors and other interested parties to see how the financial system could change. But, as with many technologies with first-mover advantage, it remains popular but isn’t necessarily the most advanced technology behind the alternative currencies. That’s where newer technologies, such as Hedera, enter the picture.
Most popular cryptocurrencies, Bitcoin included, rely on blockchain technology. Hedera works on similar distributed ledger technology, but not the blockchain itself. Instead, it uses Hedera Hashgraph to fill similar roles.
Coins on the platform rely on more efficient and secure technology that benefits from blockchain’s experience for a new form of digital currency. While the number of Hedera Hashgraph coins remains limited at this time – HBAR is the native and currently most popular currency – more options for investors and those looking to avoid the traditional finance system are on the way.
What is Hedera?
Hashgraph itself is a publicly distributed ledger that relies on a proof-of-stake model in order to verify transactions. It was designed, as mentioned, to take the concepts behind existing cryptocurrencies to a new, more energy-efficient level while overcoming many of the challenges and limitations of blockchain.
Hedera Hashgraph does power cryptocurrencies indeed, as we will come to in a moment, but it is designed to create a decentralised digital solution to all manner of technical challenges.
For clarity, Hashgraph is the network, while Hedera Hashgraph is the ledger itself and the only publicly distributed version of the technology on the Hashgraph algorithm.
What About Hedera Coins?
Hedera is a privately owned company, and Hashgraph is proprietary technology. As such, it has taken time for the technology to become available to third parties – although the process is now well underway. This is why HBAR is the crypto coin most commonly associated with the platform. It is the native Hedera coin and was created to power the overall decentralised economy associated with the platform.
The third-party rollout continues at pace, and various companies and individuals have elected to use the more advanced Hashgraph technology to power new cryptocurrencies.
There are Too Many Altcoins. What Does Hedera Do Differently?
There’s absolutely no shortage of altcoins on the market. There are more than 6,000 in existence as of 2021, spurred on by the fact that anyone can create their own cryptocurrency on a range of available blockchain platforms.
The critical difference of Hedera is that it doesn’t rely on a conventional blockchain setup to succeed in the way the likes of Bitcoin and Ethereum do. Instead, the underlying Hashgraph technology can process many times more transactions each second and doesn’t use mining to verify them. As such, it is more efficient and requires far less energy – one of the primary considerations of blockchain detractors.
Hedera’s technology also operates on a consensus voting system instead of the proof-of-work and proof-of-stake methods utilised by popular cryptocurrencies. This is one way in which it keeps energy requirements low, as computing requirements are significantly lower than with other crypto coins.
As patented technology owned by Swirlds, Hashgraph owns and operates the underlying technology and can therefore authorise or deny third party usage. Work is already well underway to launch numerous additional cryptocurrencies on the same platform, but each must be independently approved. This means that it is highly unlikely that there will ever be as many altcoins on Hashgraph as the number prevalent on more conventional blockchain technologies.
Does Hedera Need Special Wallets?
While the underlying technology is vastly improved, Hedera does not require owners to use different wallets from their existing crypto investments. Hedera publishes a list of preferred wallets, spanning conventional custodial, hardware and software options. There are verified support for renowned choices such as BitGo and Fireblocks, while HBAR owners can store their coins in the ever-popular Ledger Nano S and X hardware wallets.
It’s also popular to store HBAR coins in popular desktop and mobile wallets, including Atomic Wallet and Edge. The growing popularity of Hedera also means that several dedicated wallet solutions have reached the market or are expected soon, such as MyHbarWallet and the Hbar Price mobile wallet.
Hedera technology also integrates closely with third-party projects and ecosystems. While HBAR is the native currency that can be used in the same way as Bitcoin and other established names, other companies that use Hedera Hashgraph to underpin their own currencies can do so in ways that make full use of additional wallets and coin management functionality.
Are There Any New Hedera-Based Coin Projects?
While the number of crypto coins based on the Hedera project is unlikely ever to rival the numbers on more established blockchains, the technology is available to developers looking for a more efficient distributed ledger technology on which to launch their coins.
The company has already taken steps to encourage usage of the platform among coin creators and traditional financial services alike, illustrated by the addition of Chainlink Labs to the Hedera Governing Council. This body oversees the governance of the Hedera network. It plays a significant role in establishing which external brands will access the platform to serve as the backbone for their modern financial services.
One such company is Automata ICO Ltd, which will launch its AKTIO coin on the Hedera Token Service (HTS) protocol. This coin is accessible on the akt.io platform, an app that aims to transform the world of finance enabling direct payments with invested capital, automated investing with intelligent algorithms, and earn generation with digital assets. The AKTIO coin will serve as the asset of choice for services provided through the platform.
Image by Sophie Janotta from Pixabay
