Unraveling the Potential of a Next-Generation Cryptocurrency
One of the only Cryptocurrencies with a patented technology running the underlying network, HBAR emerges as a unique digital asset tied to the Hedera Hashgraph network.
HBAR aims to address the blockchain trilemma by leveraging a blockdag structure instead of a traditional blockchain. In this article, we will delve into the key features, use cases, and potential challenges surrounding HBAR, shedding light on its journey as a generation 3 cryptocurrency.
Tackling the Trilemma and Beyond
At the core of HBAR's value proposition lies its ability to handle the blockchain trilemma, a concept popularized by Vitalik Buterin, co-founder of Ethereum. Hedera Hashgraph's blockdag architecture allows HBAR to excel in scalability, security, and decentralization.
Or so the claim goes.
Scalability is a hallmark of HBAR, with claims of reaching a transaction processing capacity of 10,000 transactions per second (TPS), although currently operating at around 1,000 TPS. While the potential for scalability is promising, it is crucial to consider the current limitations of the network and its ability to consistently achieve the stated transaction throughput.
The SEC has stated that in order for any digital asset to reach a scale to handle the financial system, a minimum of 100,000 TPS might be needed.
Decentralization and Governance:
While decentralization is a spectrum in the crypto world, HBAR's level of decentralization is a topic of discussion. Hedera Hashgraph operates with a governing council comprising 39 seats on a board, each serving for two terms of three years before being forced to take a term off. Currently, 29 seats are filled, enabling the council to oversee consensus nodes and governance activities.
This governance structure raises concerns among skeptics, as it consolidates decision-making power. However, the council's plan to open consensus node operation to the public upon filling all 39 seats signals a future shift towards greater decentralization.
A theme HBAR has been holding throughout its existence.
HBAR's initial development was spearheaded by the Texas-based company, Hedera. Founded by Leemon Baird and Mance Harmon, inventors and owners of the patented Hashgraph technology.
Hedera the company, holding exclusive licenses to the Hashgraph patents, is to ensure a focused and impactful approach to the development of HBAR. While the involvement of experienced developers is a positive aspect, maintaining a degree of skepticism is essential to assess the project objectively.
Use Cases and Potential:
HBAR's potential extends beyond being a peer-to-peer payment system. The integration of smart contract capabilities atop its robust delegated-proof-of-stake blockchain presents an opportunity for HBAR to differentiate itself from other Ethereum-compatible solutions. Leveraging the expertise and backing of various companies and institutions, HBAR is poised to deliver innovative software that caters to the specific needs of businesses and industries. However, it is important to monitor the actual implementation and adoption of smart contracts to assess their true impact.
The governing council that oversees the development and runs the consensus for HBAR is both its Achilles heel as well as the reason I am bullish. I recently purchased 6500 $HBAR in the Bag-Holder to Home-Owner portfolio challenge (about $30 worth or 8% of the portfolio).
Tokenomics and Dilution Concerns:
HBAR's tokenomics reflect a distribution model that I have criticized many times. The majority of coins were sold to investors through Simple Agreements for Future Tokens (SAFTs), or were held by insiders of the companies.
leading to significant dilution concerns.
However, with a maximum supply of 50 billion coins and 31 billion already released, there is hope that the worst of the inflationary pressures has passed, offering a more stable future for HBAR holders. Nevertheless, it is essential to approach the tokenomics of HBAR with a critical eye, considering the potential implications of initial distribution and ongoing supply dynamics.
TLDR:
HBAR is a cryptocurrency tied to the Hedera Hashgraph network, utilizing a blockdag structure to address the blockchain trilemma of scalability, security, and decentralization.
The governance structure of HBAR involves a governing council comprising 39 members, raising concerns about centralization. However, plans to open consensus node operation to the public indicate a future shift towards greater decentralization.
Developed by the company Hedera, which holds exclusive licenses to Hashgraph patents, HBAR benefits from experienced developers and innovation that aligns with specific industry needs. However, a balanced level of skepticism is crucial.
HBAR's tokenomics faced criticism for its distribution model, resulting in dilution concerns. With 31 billion coins already released out of a maximum supply of 50 billion, there is hope for greater stability in the future. However, ongoing scrutiny of the tokenomics is necessary.
Sources:
https://hedera.com/hbar
https://hedera.com/
https://hedera.com/council
Comentários