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Hedera Hashgraph

Hedera Hashgraph is a distributed platform built on the basis of hashgraph-consensus, which is more effective than ordinary blockchain algorithm. The platform is lightning fast, secure, and fair, and, unlike some blockchain-based platforms, doesn’t require compute-heavy proof-of-work.

Rating: 3.4

Official contacts
Location: N/A
Web-resources:   Whitepaper Website
Social networks: N/A
Product source tracking: https://github.com/hashgraph
Details Description Risks Full analysis Team

Detailed review

Stage of product development
Beta version is not available. Early stages of development. Not that much information is given regarding the product development.


Token description
ICO date
TBA
Token price
N/A
Platform
Ethereum
Hard cap
200000000
Blockchain
Own blockchain
Token distribution date
N/A
Consensus method
Self-designed voting algorithm combined with the “gossip about gossip” protocol.
Escrow
N/A
ICO currencies
ETH
Bounty camping
N/A
Markets
N/A
Token functions
Utility token that grants token holders access to distributed applications on the platform. The token may also be “staked” and used to run a node (for example, adding CPU to the Hedera public network), thereby providing the network security within the public ledger.
Tokens distribution
Sold (4.0%)
Risks
MARKET

There are already several successful platforms with large customer base, such as Ethereum, Lisk, Waves, and Stratis; that is why it might be hard for Hedera Hashgraph to expand its network and attract new customers due to network effect. The development of so-called "Blockchain 3.0/4.0" projects can be a serious risk for the growth of popularity of Hedera Hashgraph.

PRODUCT

Beta version of the network is not available and the launch date is not clear. The roadmap is not given. The SDK with demo apps is provided by Swirdls, not by Hedera Hashgraph. It is worth taking into account the possible risk associated with the patent law, which can arise in the event of the growth of Hedera Hashgraph and the occurrence of claims from the Swirlds.

BUSINESS MODEL

As Hashgraph creates multiple acyclic graphs, this leads to the impossibility to reward Miners.

FINANCES

The team would like to raise 200M USD. This figure is way above the median valuation of comparable companies. The amount of total token supply is not given. The exact token distribution is not given.

TEAM

Most of the team members are still working for Swirlds, so it might slower the pace of Hedera project development.

Full analysis
Market

Hedera Hashgraph is entering the market of decentralized platforms for various industries. The market cap of cryptocurrencies went up to over $600B during 2017 and received attention from the global central banks. Main factors likely to affect the future development of cryptocurrencies are, in our opinion, interventions by the government and central banks and questions on how the sector will be regulated. Apart from Ethereum, there are other large companies creating Blockchain platforms which already gained high market cap (Lisk, Waves, Stratis). That is why the competition on the market of Blockchain platforms is stiff and it might be hard for Hedera to attract significant amount of customers. Also, now there are more projects on the market that are going to solve the existing problems of scaling and consensus of blockchain. Among such projects are SEELE, dFINITY, Metronome, Pchain, Zilliqa. Metronome and Seele have planned their tokensale for the next two months, while ZIliqa has already raised $ 22 million by January 2018. Dfinity and Pchain have not yet announced the timeframes of the tokensale. The development of these projects can be a serious risk for the growth of popularity of Hedera Hashgraph.

Product

The Hedera Hashgraph Platform is not built on a blockchain, the technology that underpins most crypto networks. It uses a different mathematical approach called a directed acyclic graph (DAG). While Bitcoin’s software is structured as a string or chain of transactions, Hedera hashgraph is a graph of transactions that “can process in parallel, as opposed to linearly. The Hedera Hashgraph Council will offer an optional identity mechanism that gives users the freedom to bind verified identities to otherwise anonymous cryptocurrency wallets. The Hedera platform and governance council will provide transparency, open innovation with platform stability, tools to enable opt-in KYC and AML, and global, cross-industry expertise to provide governance and decision making for a globally distributed network and cryptocurrency. The Hedera ledger can run smart contracts written in Solidity. Now, it is not clear when the product will be released for public. The roadmap is not given. GitHub page of the project was created in late October 2017. The copyright to the hasgraph algorithm of consensus belongs to Swirlds, the company in which most of the creators of Hedera Hashgraph work. A paper describing this algorithm was published in May 2016 by the co-founder of the project - Leemon Baird. It is worth taking into account the possible risk associated with the patent law, which can arise in the event of the growth of Hedera Hashgraph and the occurrence of claims from the Swirlds.

Business model

Users pay fees to use the platform, such as when they transfer cryptocurrency coins, or add items to the ledger. Because the Hedera network has high throughput and doesn’t require proof-of-work, we anticipate the fees to be a small fraction of other public platforms in the market today. There are several types of payments and fees: node fee(This fee is negotiated between client and node, and can be set by market forces as nodes set their fees. This is the only fee that is not set by Hedera), service fee (fee paid to Hedera), transaction fee (this fee is used to cover the cost to nodes of gossiping it, temporarily storing it in memory, and calculating the consensus on the event containing it - paid to Hedera). Hedera uses collected service and transaction fees to fund two different types of payments: incentive payment (payments made from the Hedera account to nodes, to incentivize them to serve as nodes) and dividend payment (payments to the Governing Members to reward them for their role in governance). The node first checks that the client’s account has sufficient funds to pay the payment transaction. If so, it submits the payment transaction to the network. After that payment transaction has reached consensus, if it is valid, only then will the node submit the service transaction to the network.

Finances

So far, Hedera has raised $18 million in funding from accredited investors, including cryptocurrency holding company Digital Currency Group. Both U.S and Non-U.S citizens who wish to be considered for the “pre-sale” must meet the criteria for an accredited investor, outlined by the SEC. The team would like to raise 200M USD. This figure is way above the median valuation of comparable companies. Note: They may do another $50m with $1k cap as public crowdsale later at a higher rate.

Team

The Hashgraph algorithm was invented by Leemon Baird, who is the co-founder and CTO of Swirlds, the company behind Hashgraph. Swirlds is a software development company that assists in the development of Dapps, ensuring the security, fairness, reliability, speed, reliability and cost-effectiveness of a variety of areas. They provide an SDK-Software Development Kit, which explains how developers can develop Dapp on Hedera Hashgraph's network. The other co-founder is Mance Harmon, who acts as CEO. Both Baird and Harmon have a long history in computer science and tech entrepreneurship. Most of the team members have previously worked together at Swirlds Inc. It is a good sign for the project development. However, most of the team members are still working for Swirlds, so it might slower the pace of Hedera project development. According to the project page on Linkedin, 24 people work in the project. Most of the employees represented are project ambassadors and are engaged in regional project promotion.

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