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How it works

Learn how hashgraph and Hedera network services work together for you to create an entirely new class of applications.

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Hashgraph consensus

Hedera is the only public ledger that uses hashgraph consensus, a faster, more secure alternative to blockchain consensus mechanisms. Hashgraph, created by Leemon Baird Hedera's co-founder and Chief Scientist, works efficiently to verify transactions while ensuring the highest standard of security to prevent malicious attacks. Hashgraph achieves high-throughput with 10,000+ transactions per second today and low-latency finality in seconds from its innovative gossip about gossip protocol and virtual voting. Once consensus is reached, the transaction is immutable and available on the public ledger for everyone to transparently see.

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Hashgraph processing of a transaction

The hashgraph processing of a transaction in the Hedera ecosystem begins when a client creates a transaction.

Once the transaction is created it is cryptographically signed at a minimum by the account paying for the fees associated with the transaction. Additional signatures may be required depending on the properties set for the account, topic, or token. The client is able to stipulate the maximum fee it is willing to pay for the processing of the transaction and, for a smart contract operation, the maximum amount of gas.

Once the required signatures are applied to the transaction the client then submits the transaction to any node on the Hedera network.

The receiving node processes (for instance, confirms the paying account has sufficient balance to pay the fee) the transaction and, if processing is successful, submits the transaction to the Hedera network for consensus by adding the transaction to an event and gossiping that event to another node.

Quickly, that event flows out to all the other nodes. The network receives this transaction exponentially fast via the gossip about gossip protocol. The consensus timestamp for an event (and so the transactions within) is calculated by each node independently calculating the median of the times that the nodes of the network received that event.

You may find more information on how the consensus timestamp is calculated here.

Public ledger

Hedera is a public ledger of transactions – a highly secure and distributed database that everyone can read from and write to.

A copy of the ledger, which only persists the latest state, is stored on each node. These core concepts of distributed consensus and decentralization make public ledgers the most trusted way to store verifiable information and assets.

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Network nodes

The public ledger is stored on the mainnet, a network comprised of consensus and mirror nodes. While currently permissioned and run by the Hedera Governing Council, consensus nodes will be permissionless – able to be run by anyone – in the future.

Consensus nodes come to consensus on the validity and order of transactions while storing the latest state of the network. Mirror nodes offer developers a flexible and cost-effective way to store and query historical data for analytics and explorers.

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Hedera network services

Hedera network services are a set of APIs that allow you to create accounts, mint tokens, write data to the ledger, call smart contracts, and other functions.

Each API call has a predictable transaction fee based on the processing and storage required. Hedera SDKs make it easy to access the API in your favorite language including JavaScript, Java, and Go.

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Token Service

Mint and manage fungible and non-fungible tokens (NFTs) for application payments, governance, or digital collectibles.

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Consensus Service

Record immutable, verifiable, and fairly ordered event logs for any application or permissioned blockchain framework.

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Smart Contract Service

Deploy Solidity smart contracts to create decentralized applications and protocols.


Decentralized applications

Applications that use a public ledger provide greater transparency and trust. This makes entirely new things possible, like a music streaming service paying artists directly or a disintermediated ad network that doesn't require audits. Collectively, these applications create network effects on Hedera to establish a more fair, secure, and decentralized future.