The basics

Hedera is a public distributed ledger technology (DLT) network that was launched in August 2018 by Hedera Hashgraph, LLC. It uses the Hashgraph consensus algorithm, which is a unique and novel approach to achieving consensus in a distributed network. Hedera’s native cryptocurrency is called HBAR, and it is used to power the network’s services, including smart contracts, file storage, and regular transactions.

Hedera focuses on providing high throughput, low latency, and fair transaction ordering, making it suitable for enterprise-grade applications. Unlike blockchain-based systems, Hedera’s Hashgraph algorithm ensures fast, fair, and secure transactions without compromising decentralization.

Mainnet and Testnet

SettleMint supports, the Hedera Mainnet and the Hedera Testnet.

The Mainnet is the primary public Hedera production network, where actual-value transactions occur. Each transaction requires payment of a transaction fee, payable in HBAR, the native cryptocurrency. The Testnet, on the other hand, is an environment used for testing and experimentation. Testnet transactions use test HBAR, which have no real-world value, ensuring no risk of real fund loss during development and testing.

You can think of the Testnet as a sandbox for developers and the Mainnet as the official production network. This setup is similar to the concept of production versus staging servers in software development.

Consensus mechanism

Hedera uses the Hashgraph consensus algorithm, which is based on a directed acyclic graph (DAG). This algorithm provides several advantages:

• High Throughput: The network can process thousands of transactions per second. • Fairness: Transactions are timestamped, ensuring fair ordering. • Security: It achieves asynchronous Byzantine Fault Tolerance (aBFT), the highest level of security for a consensus algorithm.

In Hashgraph, each node in the network shares information (events) with other nodes, and through a process called gossip-about-gossip and virtual voting, consensus is reached efficiently and quickly. This method ensures that Hedera remains decentralized and resilient against attacks while maintaining high performance.

JSON RPC Relay

The Hedera JSON-RPC Relay is an open-source project implementing the Ethereum JSON-RPC standard. The JSON-RPC relay allows developers to interact with Hedera nodes using familiar Ethereum tools. This allows Ethereum developers and users to deploy, query, and execute contracts as they usually would.

Hedera’s JSON RPC relay is a complex software component that relies on multiple elements, including consensus nodes and the mirror node. This complexity can lead to issues such as connection timeouts, especially during smart contract deployments. One Ethereum transaction can generate more than ten Hedera transactions, which increases the likelihood of encountering these problems. However, these issues are typically limited to the initial contract deployment phase. Once a contract is successfully deployed, subsequent contract calls should not experience such problems.

More information can be found on the official Hedera website.