Coinbase Integrated The Hedera Into Its Roadmap – Time to Buy HBAR?
By Tyshe Jiang | Crescent City Capital Market Analyst Intern
What is HBAR
HBAR is the native, carbon-negative, and energy-efficient cryptocurrency of the public Hedera network. By using proof-of-stake to deter attacks, Hbars are used to pay application transaction fees and protect the network.
History of Hedera Hashgraph
The story of Hedera Hashgraph starts with Swirlds, a software startup based in Texas that was established in 2015 by computer scientists Mance Harmon and Dr. Lehmann Baird. Hedera uses a novel consensus mechanism for distributed ledgers. After several months of testing, the consensus white paper was published in May 2016. Then, in 2017, Swirlds went on to raise millions of dollars in finance.
A Public Network For Everyone
Instead of using blockchain technology, Ethereum and Hedera Hashgraph employ a DAG, or directed acyclic graph, a different type of distributed ledger technology (DLT). This technology allows all network nodes to freely share information with one another freely and time stamps all these messages to keep them in order. This sending of messages between nodes is called gossiping. Gossiping is the basis of the Hashgraph consensus algorithm which uses asynchronous Byzantine fault tolerant or ABFT. This fancy acronym refers to the fact that there is no defined period of time at which all nodes must come to an agreement on a group of transactions. In other words, because there is no blockchain, ABFT is a proof-of-stake consensus process without block times.
In the Hashgraph consensus, nodes gossip messages to each other about transactions randomly. This information spreads quickly, much like gossip does in real life, and enables the Hedera Hashgraph network to reach a consensus over a transaction in around 3-5 seconds. From the Hedera Hashgraph whitepaper, it mentions that “The hashgraph is fast. It is limited only by bandwidth. If each network node has enough bandwidth to download and upload a given number of transactions per second, the network as a whole can handle close to that many transactions per second.” Now with this unique architecture, Hedera Hashgraph is reportedly able to process around 10,000 transactions per second. Also, Hedera is compatible with smart contracts. On the Hedera Hashgraph network, anybody may make a smart contract even if the network’s fundamental code is a closed source. As for the Economic Incentives, although Hedera Hashgraph is a proof of stake cryptocurrency, it does not have any slashing. Therefore, validators are incentivized by the network fees they earn for staking HBAR.
Recent Updates
On July 1st 2022, Coinbase published a blog titled Increasing transparency for new asset listings on Coinbase in order to “reflect our previously disclosed position here to post only those assets we have decided to list”. Coinbase integrated the Hedera network into its roadmap. As of press time, HBAR trades at $0.063. As Coinbase is the largest cryptocurrency exchange in the United States by trading volume, HBAR will be accessible by more people. Historically, this additional exposure of a cryptocurrency on Coinbase has led to an increased trading price over time. We anticipate this could happen with HBAR as well.
Summary
Based on the above reasoning, Hedera could continue to grow, with positive trends such as monthly active users rising 51% quarter over quarter, transaction fees remaining low with an average charge of less than $0.001, and NFT uses increasing. Hedera is a native and great potential network created with Hashgraph and a new consensus algorithm. With the integration to Coinbase, although Hedera is still in its early stages, its vast vision is taking shape.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. Please conduct your own due diligence before making any investment decisions.
References:
https://messari.io/asset/hedera-hashgraph
https://blog.coinbase.com/increasing-transparency-for-new-asset-listings-on-coinbase-e06f2edb095e
https://messari.io/report/state-of-hedera-q2-2022?referrer=asset:hedera-hashgraph