Cryptocurrency startup Hedera announced plans to launch a new virtual currency platform in the second half of this year. So far, Hedera has raised $18 million in funding from accredited investors, including cryptocurrency holding company Digital Currency Group
The Hedera Hashgraph Platform, formerly known as Hashgraph, 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). CEO Mance Harmon says it will be able to process hundreds of thousands of transactions per second. By comparison, Bitcoin typically processes less than 10 transactions per second, and Ethereum usually processes less than 25.
Hedera cofounders Mance Harmon and Leemon Baird first began working together in 1993 as part of a five-person team that built machine learning algorithms for the U.S. Air Force. Harmon went on to manage a U.S. government software program for missile-defense systems before founding two cyber security startups. In 2015, he and Baird cofounded Swirlds, which builds private blockchains for large companies, and they started working on Hedera hashgraph last fall. Baird, who completed his computer science Ph.D. at Carnegie Mellon in less than three years, invented Hedera’s algorithm.
For Bitcoin and Ethereum, slow processing speeds and high transaction fees have prevented them from being a viable option for handling everyday payments. It can take 10 minutes for a bitcoin transaction to settle, although experts argue that Bitcoin and Ethereum’s speeds will improve dramatically with new technologies that will be layered on top, such as the Lightning Network. They compare the current state of Bitcoin with the early days of the Internet, when dial-up access was slow, but additional technologies were added to make improvements