It’s finally here – the day that many of you in the community, and certainly all of us at Hedera, have been looking forward to, and working hard towards, over the last few years. Open Access is a big milestone for us. As of that moment, anyone from the general public can create a Hedera account, and any developer can now build and deploy decentralized applications (dapps) on the Hedera Hashgraph platform.
We are humbled and grateful for your support. And we know that, while in many ways Open Access is a big milestone for the Hedera network, in other ways it is just the first step in realizing our vision of being the trust layer of the internet. We are excited for everyone to use the dapps that are already live with us today at Open Access, and the many more building on us that we look forward to seeing launch in the coming weeks and months.
Beyond that, we will be rolling out the functionality we have recently described to enhance the network and improve its performance – including the Hedera Consensus Service, mirror nodes, and sharding. And the Governing Council will continue to grow – from the 10 initial members today, to 39 global blue chip organizations at capacity.
We know that many of you have questions, and will continue to have questions, on various aspects of the Hedera technology and model.
Below we address the top questions we’ve heard in recent weeks. And we will continue to address frequently asked questions as the network evolves, new dapps and Council members come on board, and the community builds things we never even imagined were possible.
Again, thank you for your support.
Mance and Leemon
FAQsMore detailed information and answers to other questions may be found on the Help section of Hedera’s website.
1. How many nodes will be on the Hedera mainnet (beta) at Open Access?
At Open Access, the Hedera mainnet beta (pre-Version 1.0) will consist of 13 geographically dispersed mainnet nodes operated by members of the Governing Council. Some Council members are running their nodes independently while, for a transition period, some members will run their nodes with assistance from Hedera’s developer operations team. In addition, mirror nodes are running at OA, and anyone can stand up a mirror node.
2. How does someone stand up a mirror node?
The Hedera mirror node source code and documentation can be found at:https://github.com/hashgraph/hedera-mirror-node
3. Who will hold the keys for Council members, and how will they be managed?
Council members will generate and manage their own keys in accordance with best practices for secure key management.
It is important to note that there are several different keys (e.g. node keys, account keys). Each Council member currently has possession of at least one node key. Council members may permit an administrator, such as a Hedera admin, to also have a key in order to assist in managing the node, but the system is designed to help ensure Council members always retain control and can revoke those access privileges at any time. Council members do not yet have account keys for Council management (treasury management). However, the only distributions at this time are those for community testing programs, and those that are contractually obligated (e.g. SAFTs and employee grants). The Hedera Board of Managers must approve any other distributions.
4. How will hbars in the Hedera Treasury be staked to nodes?
At Open Access, stake is divided equally among the nodes. When proxy payments start, the coins in treasury will be proxy staked, divided equally among the nodes. For more information on proxy-staking, please refer to the proxy-staking sections of the Hedera whitepaper and Hbar Economics whitepaper.
5. Will the Council publish which decisions require unanimous vs super majority agreement?
Yes, voting thresholds for different Council decisions are in the Hedera LLC operating agreement.
6. Is the license that Swirlds granted to Hedera Hashgraph exclusive? Is it revocable? If so, in what situations?
Swirlds owns the patents to the hashgraph technology and licenses the hashgraph technology to Hedera for the purposes of running a general-purpose public ledger, while retaining the right for Swirlds to use or license the hashgraph technology for other purposes.
When drafting the license agreement, Swirlds and Hedera sought to come up with a definition of “general-purpose public ledger” that would ensure the boundaries of exclusivity would be clear and obvious even years from now and regardless of how the industry and applications develop. We were unable to do so at that time. As a result, the license was not written to be exclusive, but Swirlds has committed that Hedera will have the only license to use hashgraph technology for a general-purpose public ledger. To help ensure that the intent is realized, the license prohibits Swirlds from directly participating in the management or governance of another general-purpose public ledger. Other contractual relationships between Swirlds and Hedera, including Swirlds’ status as the original member and sole permanent member of Hedera, further underscore Swirlds’ interest in fulfilling its promise that Hedera will be the only licensee of hashgraph for that purpose. With all that said, there is a continued willingness to be contractually bound to exclusivity, if properly defined. As the industry develops, Swirlds and Hedera have continued – and will continue – to evaluate exclusivity and a definition of “general-purpose public ledger” that both accommodates the “path to permissionless” that we have described and that would only be infringed by a potentially competitive network.
The license to Hedera is not revocable by Swirlds at will. Swirlds may only revoke the license in limited circumstances, such as if Hedera fails to launch the network or distribute coins (both of which are now moot), or where the security or decentralized nature of the platform is in jeopardy, such as upon Hedera’s fraud, illegal activity, bankruptcy, impossibility of performance (e.g. due to regulatory prohibitions) or if Hedera breaks fundamental promises made to the market by it and Swirlds, such as creating additional hbars after promising a fixed supply of 50B.
7. Is Hedera censorship resistant?
The Hedera cryptocurrency service is completely censorship resistant. The Hedera network is governed by the Hedera Council, and it is not possible for the Council nor anyone else to restrict account creation, delete accounts, freeze or otherwise prevent cryptocurrency transactions, reverse or alter cryptocurrency transactions, or amend a user’s files or smart contracts. The only ability the Council has to modify the network state is to delete hosted files, which includes hosted smart contracts. The Council retains this ability for the sole purpose of removing unambiguously illegal content from the network (more specifically, the nodes). We remind people that Hedera is a public network and unencrypted files stored on a public network are visible to all, and that users and developers are solely responsible for their activities that utilize the Hedera network. It is also important to distinguish content or specific files from activities, the latter of which Hedera has no ability to censor in any way.
8. How long will the Hedera mainnet remain in beta?
The Hedera mainnet will be considered beta until it reaches Version 1.0, which Hedera expects in 2020. However, starting at Open Access, Hedera’s mainnet and its three initial network services (cryptocurrency, smart contracts, and file service) will be available to developers for building and running decentralized applications.
9. Will the mainnet (beta) continue to have scheduled maintenance after Open Access?
During the mainnet beta period, it is expected that the network will experience very brief periods of scheduled downtime for maintenance. Anticipated maintenance activities include adding additional nodes to the network and updating the core software running on mainnet (beta) nodes. The network’s consensus state will remain unchanged in the case of any downtime or network failures, and any transactions sent to the network during periods of downtime will be rejected. Conservatively, Hedera expects up to 1 hour of downtime for maintenance per month, equating to approximately 99.86% uptime. The status of Hedera’s mainnet and testnets is publicly available at:https://status.hedera.com
10. Will the mainnet (beta) be throttled?
To ensure the availability of Hedera’s services to all participants during this initial phase, API calls for all mainnet network services will initially be throttled. Cryptocurrency transactions will be limited to 10,000 transactions per second, and both the smart contract and file services will be limited to 10 calls per second. Such throttling restrictions are expected to loosen over time.
11. Is KYC required post Open Access?
Hedera will continue to verify the identity of anyone with whom we directly transact (e.g. by providing hbars or access to technology). For example, if you participate in programs that the company runs or if you create an account through the Hedera Portal, then you will need to submit identification information for verification and KYC review. Additionally, if you are a developer that would like to create a testnet account, you will also need to go through our KYC process. However, after Open Access, users will be able to create Hedera accounts indirectly through third-party applications. It will be up to those applications, based on the type of application and its legal obligations, to determine whether users must verify their identity.
12. Will there be community testing after Open Access? Will I still be able to get the rest of my testing cap?
Although Hedera will not run a community testing / coin earning program after Open Access, we expect that third-party organizations will operate programs that incentivize users to test the network and provide insight and analytics on network performance. Our community testing program provided us important information in the period before Open Access, but we also learned that continuing to run that program ourselves would not be sustainable. Instead, Hedera has set aside more than a billion hbars to support third party testing programs so that you may continue earning hbars through similar programs run by others.
13. When will I be able to review the Hedera source code? Has the Hedera source code been audited? If so, is the audit publicly available?
The Hedera source code has been audited by multiple code audit firms. The results of these audits will be made available with Version 1.0 of the software, expected in early 2020. At that time, the source code will also made available for anyone to read, recompile, and verify that it is correct. For more information regarding open review of the Hedera source code, please read the Hedera whitepaper.
14. What support will Hedera offer after Open Access?
For a very short time after Open Access, Hedera will offer support to users who are creating a Hedera account and using the Hedera wallet app. This support will focus on assisting with KYC processing, wallet download, and wallet configuration. For all users, it is the individual account holder’s responsibility to ensure that their wallet passphrase as well as public/private key pair are safely and securely saved. Hedera has no ability to assist with issues that require a restore of an existing wallet, if the user does not have this information.
15. Are hardware wallets available to store hbars?
Hedera is in the process of integrating into Ledger hardware wallets, starting with the Ledger Nano S.
Please note that Hedera does not endorse using any specific hardware wallets or wallet providers. Using any hardware wallet or custodial service is done so at the risk of the end user.
As additional integrations with wallet providers become available, they will be listed on the HBAR resource page at:https://www.hedera.com/hbar
16. What is the schedule for coins to be released from Hedera’s Treasury?
Please refer to Hedera’s Hbar Economics whitepaper for a detailed explanation of the expected release schedule of coins from Treasury.
17. How does Hedera define circulating supply?
We define “circulating supply” as the total number of hbars that have been released from Treasury and are able to be used or sold. For example, we would consider hbars that have been distributed to a SAFT holder to be part of the circulating supply even if the SAFT holder has not yet used or sold them. At the initial release of hbars at Open Access, only 3.18% of the hbars are expected to be in the circulating supply. At the end of one week after Open Access, 3.59% of the total supply of hbars are expected to have been released and be in circulation.
18. Will regulators deem hbars to be securities?
Hedera has continued to have open discussions with regulators to keep them informed of Hedera’s progress and plans. We have neither sought nor received a no-action letter or other official relief from the Securities and Exchange Commission or any other regulatory body. The SEC Staff has emphasized to the industry that its analysis will be informed by the facts and circumstances in each case. It is possible that some of those facts and circumstances can be known only in retrospect. There is still a risk that the SEC or other securities regulators could retrospectively deem hbars and transactions in hbars to be subject to applicable securities regulation. The regulatory environment in the United States remains unclear and each user needs to assess their own risk.
Nevertheless, Hedera’s view is that, based on the facts and circumstances at the time of Open Access, the sale of hbars and transactions in hbars should not be subject to U.S. securities law. At Open Access, the network will have been live for more than a year, with more than two dozen third-party developers having deployed live applications and having generated meaningful network use, and with more applications coming live soon. Developers and users need to be able to purchase hbars in order to use the network and the third-party applications running on it. In addition, meaningful growth of the network from this point forward will not be driven primarily by Hedera’s efforts, but by whether developers and enterprises bring useful applications to market on top of it. The network also is now governed by a Council of members from diverse industries and geographies and with diverse interests, ensuring that no one company controls the network or the decisions that affect it. Its governance will become even more decentralized as additional members continue to join the Council. We are of the view that the totality of facts and circumstances that exist as of Open Access support a conclusion that hbars are not securities and that transactions in hbars are not subject to the U.S. securities laws.
Although we believe that the better view is that hbars are not securities, and that no one purchasing or using hbars would expect the protections of the securities laws, there remains a risk that regulators will take a contrary view.***Watch our worldwide virtual event replay: