Hedera: the alternative to classic blockchain

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Hedera is often perceived as an innovative alternative to traditional blockchains. However, it is not a blockchain strictly speaking, which raises questions regarding its functioning, its advantages, its disadvantages, and its positioning in the ecosystem of decentralized technologies. In this article, we will in depth the specificities of Hedera, its unique consensus mechanisms and the challenges it faces.

Table of contents

Hedera is not a blockchain: advantages and disadvantages

Hedera is based on technology called hashgraph , an acyclic oriented graph (DAG) which does not follow the classic blockchain model. Unlike a traditional blockchain, where transactions are grouped into blocks and then added to a linear chain, Hedera treats transactions individually and validates them in a asynchronous way.

Benefits :

  1. Speed : the absence of blocks makes it possible to treat transactions much faster. Hedera can manage up to 10,000 transactions per second, compared to approximately 30 TPS for Ethereum .
  2. Energy efficiency : Hedera does not need the Proof of Work (POW), which consumes a lot of energy. The network is therefore more ecological.
  3. Quasi-instantaneous purpose : thanks to its consensus mechanism, transactions are finalized in a few seconds, which is a major asset for applications such as real-time payments.

Disadvantages :

  1. Reduced decentralization : The nodes of the network are controlled by recognized entities, which raises questions about decentralization. Unlike Bitcoin where anyone can perform a node, Hedera limits this role to well -established companies.
  2. Centralized governance : decisions on the evolution of the network are taken by a governance council made up of 39 large companies, which compromises theoretical decentralization.
  3. Complexity : the structure of Hashgraph can be more difficult to understand and implement for certain developers, compared to a more classic blockchain.

Validation of transactions: who validates and how?

The transactions on Hedera are validated by the nodes operated by the members of the Governance Council , made up of companies such as Google, IBM, and Boeing. These nodes participate in a distributed consensus which is based on the ABFT algorithm (Byzantine asynchronous Fault Tolerance) , ensuring that even in the presence of malicious or failing nodes, the network can reach a valid consensus.

Unlike a traditional blockchain where minors (or validators in the case of the Proof of Stake ) add the blocks and are rewarded in cryptocurrency, the nodes of Hedera are not directly remunerated by high transaction costs. Rather, they receive minimal costs, often less than $ 0.001 per transaction, which is made possible by the governance structure and the involvement of companies operating the nodes. Their main motivation lies in the development of strategic use cases, rather than in immediate profit.

ABFT consensus: operation and safety

One of the key elements of Hedera lies in its ABFT consensus mechanism (Byzantine asynchronous Fault Tolerance) . This consensus is designed to withstand the attacks and failures of network members, while ensuring a rapid purpose of transactions.

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How does ABFT work?

ABFT allows the network to reach a consensus even in the presence of malicious nodes, without it being necessary to obtain an absolute majority. Gossip system (or gossip), where each node shares all the information it holds with another randomly chosen node. This includes recent transactions and discussion history. This exponential distribution process allows all honest nodes to have a clear and synchronized vision of the network state.

What distinguishes ABFT is its ability to operate asynchroning , that is to say that it does not need to follow a strict timing to reach a consensus on transactions. When we talk about "votes" in this context, these are the decisions that each node takes to determine whether a transaction is valid or not.

Usually, in consensus systems, nodes must send explicit votes to the other nodes to confirm a transaction. In ABFT, instead of directly exchangeing these votes, each node uses the information he received by the Gossip to deduce how the other nodes would have voted.

In other words, a node can "calculate" the votes of other nodes based on the transactions and messages he has already received. This means that even if some nodes are malicious, failing or slowed down, the network still reaches an agreement in an effective and secure manner, because it does not need to wait until all the votes are explicitly exchanged.

Why does ABFT not require a majority?

ABFT makes it possible to reach a consensus without it being necessary that a majority of nodes simultaneously validates a transaction. Indeed, the process is based on the fact that honest nodes are rapidly synchronizing via Gossip. Even if some nodes are compromised, their influence is reduced as long as the majority of nodes are honest, because they do not need to exchange directly from votes. This makes the network faster and safer, compared to systems like the Proof of Work or the Proof of Stake , where the majority is crucial.

Security and equity: Is Hedera really safer?

Hedera is not only rapid, but also safer and more equitable than traditional blockchains. Security is reinforced thanks to ABFT, which prevents attacks of 51% common in blockchains based on the Proof of Work .

In terms of equity, Hedera stands out by preventing the front-ringing , a practice where minors or validators can manipulate the order of transactions to take advantage of it. With its timestamp system, Hedera ensures that transactions are validated in the exact order in which they have been submitted, which reduces manipulation opportunities and guarantees greater equity.

Decentralization: a challenge for Hedera

Although Hedera has undeniable advantages in terms of speed and security, decentralization remains a major challenge . The fact that only selected members can operate nodes limits the participation of the community, which calls into question the fundamental principle of decentralization that we generally expect from blockchain networks.

Strategic opportunities for companies

Despite a centralized structure, Hedera offers important strategic opportunities for businesses. These can use the network to create decentralized applications ( DApp S ) or manage large -scale transactions, without worrying about high costs or processing times. By operating nodes, these companies do not need to generate immediate income because they benefit from the strategic position they acquire in the field of Blockchain technology. They can develop innovative solutions for sectors such as finance, health or logistics, while benefiting from network safety and efficiency.

The Hbar token within Hedera 

Hbar token plays a central role within the Hedera network. Hbar serves as fuel for decentralized transactions and applications ( dApp S) on the network, guaranteeing fast and secure payments. In addition to being used for transaction costs, Hbar contributes to network safety by allowing tokens holders to participate in the consensus mechanism, based on the unique hashgraph of Hedera.

A viable economic model: how Hedera keeps low transaction costs

The transaction costs on Hedera are exceptionally low, often less than $ 0.001 per transaction. This model is made possible by the involvement of recognized companies that see in the management of nodes a strategic opportunity rather than a source of direct income. Their motivations include the possibility of experimenting and implementing large -scale use cases, with the advantage of participating in emerging technology without having to count on high transaction costs to make the exploitation of nodes profitable.

The advantages and disadvantages of timestamps

The timestamp plays an essential role in Hedera's architecture. It allows you to record each transaction with millimeter precision at the exact moment when it is subject to the network.

Benefits :

  1. Equity : transactions are treated in a transparent manner, in the order in which they are subject, which prevents any manipulation of their order of execution.
  2. Speed : the purpose is reached more quickly, because it is not necessary to wait for the creation of blocks, as is the case in traditional blockchains.

Disadvantages :

  1. Dependence on the synchronization of nodes : to guarantee the accuracy of the horodatages, it is crucial that the nodes are correctly synchronized. A gap could cause timestamp errors.
  2. Technical complexity : Managing precise timestamps requires more sophisticated infrastructure, which can add costs and complexity.

Concrete case: Hedera and the Supply Chain

Hedera has found concrete applications in areas such as the Supply Chain . For example, it is used to follow goods in real time, ensuring that each stage of the logistics chain is precision thanks to timestamps and intelligent contracts. Companies can thus guarantee complete and unchanging traceability of products, from manufacturing to delivery.

Hedera: a still limited traction

Despite its impressive technological potential, Hedera has not yet managed to attract a significant traction. In October 2024, the total locked value ( TVL ) on the network was relatively low, with only $ 49 million , well below competitors like Solana , Aptos , or Su. This lack of traction underlines that, despite its advantages, Hedera must still prove its large -scale adoption. This lack of adoption is probably due to a low popularity due to its lack of decentralization.

Conclusion: A potential awaiting adoption

Hedera has a certain potential on the world of technologies distributed with its hashgraph and its ABFT consensus. But without a broader adoption, this technology may remain on the fringes of the crypto ecosystem. The future of Hedera will depend on its ability to attract users and developers, and to prove that its innovations can surpass traditional blockchains in terms of performance, security and equity.

Faq

1. What differentiates Hedera from traditional blockchains?
Hedera is not a classic blockchain. It uses the hashgraph, which allows a purpose of transactions in a few seconds without using blocks.

2. How does ABFT ensure network safety?
ABFT makes it possible to achieve consensus even in the presence of malicious or failing nodes, thanks to a virtual voting process which does not depend on the majority to function.

3. What are the main challenges of Hedera?
The main challenge remains adoption. In 2024, TVL was still low compared to competitors like Solana or Aptos, despite its technological advance.

4. Hedera is really decentralized?
The decentralization of Hedera is limited, because the nodes are operated by selected companies, questioning the fundamental principle of decentralization.

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