(Kitco News) – Bitcoin and Ethereum are “extremely inefficient,” and Hedera’s Hashgraph is much more efficient and environmentally friendly, said Mans Harmon, co-founder of Hedera and co-CEO of Swirlds Labs.
“Hedera … uses this algorithm called ‘hash,’ which is the most efficient algorithm on the market,” he explained. “When it comes to Ethereum, even Ethereum 2.0, Hedera is 14,000 times more efficient or uses much less energy than Ethereum 2.0.”
Harmon spoke with David Lin, host and producer at Kitco News, at the Collision conference in Toronto.
Hashgraph is a distributed ledger technology that is an alternative to blockchain. Hedera holds the patent for this technology, which Hedera claims is faster, cheaper and more energy efficient than blockchains like Bitcoin and Ethereum. Hashgraph is proof of stake.
“It’s impossible to know how much it will cost to use the [Ethereum] network, due to fluctuations in the token price,” Harmon said.
According to Hedera’s website, the average fee for a Bitcoin or Ethereum transaction is $22.57 and $19.55, respectively. Hedera’s HBAR cryptocurrency, on the other hand, has a transaction fee of $0.0001.
“HBAR is used both to secure the network and to make it possible for developers to use the network,” Harmon explained. “When a developer builds an application on top of HBAR to use our network for their application, they must purchase HBAR off the open market, through the exchanges. When they make API calls, they pay for those who use HBAR.”
Crypto sales and security
The recent crypto selloff has weighed on HBAR, which is down more than 50 percent year-to-date. Harmon, however, isn’t worried about market fluctuations and said HBAR is secure.
“At the end of the day, what you should care about is whether one bad actor or group of bad actors working together can buy at least a third of the total token supply,” he said. “If they can, then they can affect the network… In our case, we have this governing board, these 26 global enterprises, each of which runs a node in the network, and there are no anonymous nodes, so we’re not susceptible to those kinds of attacks today.”
These 26 businesses, which include corporations such as Boeing and Google, as well as universities such as UCL and the London School of Economics, operate so-called “consensus nodes” on the Hedera network. These nodes store the latest state of the public ledger, receive transactions, and work together to determine consensus using a hashgraph.
“We have 26 organizations,” Harmon said. “Each of them controls a node in the network. If one of them decides to be malicious, it won’t work. It is a decentralized trust. You no longer have to trust an organization. You have to trust a collection of organizations, which is a much better model.”
To understand Hedera’s Hashgraph applications and Hedera’s future plans, watch the video above.
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