What is Hedera?

Hedera (HBAR) is a public distributed ledger that uses a directed acyclic graph (DAG) data structure called a Hashgraph rather than a traditional blockchain, enabling high throughput, low fees, and finality in seconds. It is governed by the Hedera Governing Council, a body of up to 39 global enterprises — including Google, IBM, Boeing, and Deutsche Telekom — each running a consensus node and holding term-limited seats. HBAR is the network's native token, used to pay for services (transactions, smart contracts, file storage) and to stake for network security.

Hedera's Hashgraph consensus algorithm uses virtual voting and a gossip-about-gossip protocol, where nodes share information about what they have heard from other nodes in an exponentially spreading pattern. This allows the network to achieve asynchronous Byzantine Fault Tolerance (aBFT) — considered the highest provable level of security for distributed consensus — with throughput measured in thousands of transactions per second and finality under five seconds. Hedera provides dedicated services at the protocol layer: the Hedera Token Service (HTS) for minting fungible and non-fungible tokens, the Hedera Consensus Service (HCS) for ordering and timestamping messages from external applications, and smart contracts via the Ethereum Virtual Machine. Enterprises such as Coupon Bureau have used HCS to manage hundreds of millions of coupon identifiers, and Standard Bank has piloted cross-border payments on the network.

The dominant criticism of Hedera is that its governance model is structurally centralized. Only council members run consensus nodes, and while the council is term-limited and diverse, ordinary HBAR holders have no meaningful governance rights. The Hedera Governing Council — a Delaware LLC — retains control over the roadmap, fee schedules, and membership. This makes Hedera better described as a permissioned enterprise ledger with a public token than a permissionless public blockchain. Swirlds, the company that owns the Hashgraph patents, has also licensed the technology exclusively to Hedera, meaning the open-source code and the underlying algorithm patent remain separate concerns and the algorithm cannot be freely forked.

Reviewed by the 2Bitcoins Editorial Team · Updated June 2026. Not financial advice.