Hedera (HBAR) Explained: What It Is and Who Runs It

Hedera is a public network for payments, tokens and apps, and HBAR is the coin that pays its fees. Unlike Bitcoin, Hedera is governed by a named council of up to 39 organizations, and it uses a method called hashgraph instead of mining to agree on transactions.

That mix of open use and corporate governance is why Hedera draws both interest and criticism. This guide covers how hashgraph works, who sits on the Hedera Council, what HBAR does, and the risks a reader should understand. For a recent example of how a headline can be misread, see what the IBM deal with Hedera actually was.

Hedera at a glance

Question	Short answer
What it is	A public network for transfers, tokens and smart contracts
Coin	HBAR
How it agrees on transactions	Hashgraph consensus, no mining
Who runs it	The Hedera Council, up to 39 organizations
Total supply	50 billion HBAR, all created at launch
Fees	Priced in US dollars, paid in HBAR
Staking	Yes, with no lock-up period
Main criticism	Governance is concentrated in a council of named companies

How does Hedera’s hashgraph consensus work?

Hedera’s hashgraph consensus works by having computers “gossip” with each other. Each network node shares the transactions it knows about with other nodes in random order. Nodes also share who they heard from and when.

From that shared history, each node can work out how the others would vote. Hedera’s documentation calls this virtual voting. No separate vote messages are sent over the internet.

Hedera describes hashgraph as asynchronous Byzantine Fault Tolerant (aBFT). In plain English, the network can still reach agreement even if some nodes act badly or messages are delayed. According to Hedera’s documentation, no single member or small group can stop the network from reaching consensus. Once consensus is reached, each node knows the order of a transaction with certainty, not just a rising probability.

Who runs the Hedera Council?

The Hedera Council is a group of organizations that run Hedera’s network nodes and vote on how the network changes. The Council’s FAQ says its LLC agreement provides for up to 39 members.

Council members vote on software updates, network pricing and the management of Hedera’s treasury of HBAR. The Council’s FAQ says each member has one vote. Recent joiners announced on the Council’s site include FedEx and Accenture, and past members have included Google and IBM. Check the current list on the Council’s own site.

The Hedera Council uses term limits. Its FAQ says the LLC agreement provides for up to 39 members, each serving a limited term. Swirlds, the company that created hashgraph, is the exception: the FAQ says it remains a permanent member.

What is HBAR used for?

HBAR is used to pay fees on the Hedera network and to stake to network nodes.

• Fees. Hedera prices its fees in US dollars and converts them to HBAR when a transaction runs. A fee stays roughly the same in dollar terms even when the HBAR price changes.
• Staking. HBAR holders can stake their account to a network node. Hedera’s documentation says there is no lock-up period, and the staked balance stays spendable at all times. The Hedera Council sets the staking reward rate.
• Network weight. According to Hedera’s documentation, each node’s influence on consensus is proportional to the HBAR staked to it.

Low dollar-priced fees suit businesses that need predictable costs. They also mean a very large number of transactions is needed before fees add up to meaningful demand for HBAR.

How many HBAR exist?

The total supply of HBAR is fixed at 50 billion. The Hedera Council’s FAQ says Hedera created the network’s full supply of 50 billion HBAR at network launch. HBAR is not mined, so no new coins are created by block rewards.

Not all HBAR is in public hands. Part of the supply sits in Hedera’s treasury. The Council votes on how that treasury is managed. The FAQ also states that Council members have no ownership rights to the HBAR held in the treasury.

For a comparison with a mined coin’s fixed supply, see how Bitcoin’s 21 million limit works.

What are the risks of Hedera and HBAR?

The main risks of Hedera and HBAR come from governance, supply release and demand.

Risk	What it means for a holder
Concentrated governance	A council of up to 39 organizations decides upgrades, pricing and treasury use. Critics see this as more centralized than open mining or staking networks.
Treasury releases	HBAR held in the treasury can move into circulation over time, which adds supply.
Low fees	Fees are tiny in dollar terms, so demand for HBAR depends on very high usage.
Logos are not buyers	A company on the Council helps run the network. That alone does not mean it holds HBAR.
Exchange custody	HBAR left on an exchange is held by that exchange, not by you.

A quick checklist before you form a view on HBAR

1. Read the Hedera Council’s current member list on its own site, not a social media graphic.
2. Check whether a news item names Hedera itself or a separate company building on Hedera.
3. Look for real usage numbers, such as transactions and active apps, not only partnership headlines.
4. Note where your HBAR sits: an exchange account or a wallet you control. Our guide to cold wallets and hot wallets explains the difference.
5. If you stake, confirm the node you choose and the current reward rate in Hedera’s own documentation.

What to watch next

Three things say the most about Hedera’s direction. Watch which organizations join or leave the Hedera Council as terms end. Watch how the Council manages the HBAR treasury. And watch actual network usage, because dollar-priced fees mean volume, not headlines, drives demand for HBAR.

Sources

• Hedera Council: FAQs
• Hedera Docs: Staking
• Hedera: Council
• Hedera Docs: Hashgraph consensus algorithm
• Hedera Docs: Mainnet fees