Hedera Hashgraph has often been described as the blockchain that isn’t a blockchain. Its underlying technology — a hashgraph rather than a chain of blocks — allows the network to process transactions in parallel, achieving finality within seconds and maintaining predictable fees.
Unlike proof-of-work systems such as Bitcoin or Ethereum’s early iterations, Hedera’s consensus mechanism uses virtual voting to reach agreement efficiently. This architecture positions it as a potential backbone for enterprise-grade applications requiring speed, security, and auditability. But is it really more than a technical novelty? To answer that, it’s important to see how Hedera is being used — and how it stacks up against competitors.
1. Asset Tokenization
Hedera’s Token Service (HTS) allows organizations to mint and manage tokens that represent real-world assets. These range from real estate to carbon credits — with compliance features such as KYC, freezing, and supply control.
By comparison, Ethereum — which dominates token issuance — suffers from network congestion and volatile gas fees. While Ethereum’s average fee has ranged between $0.50 and $5 depending on traffic, Hedera’s cost per token transaction typically stays below $0.001.
Projects like DLA Piper’s TOKO platform and Archax, a regulated digital asset exchange, chose Hedera precisely for this reason: tokenization at scale without prohibitive costs.
This combination of throughput and fee predictability gives Hedera a structural advantage in institutional tokenization — an area where Ethereum remains the standard but not the most efficient.
2. Hedera’s Supply Chain and IoT Tracking
Supply-chain data typically involves thousands of transactions daily, from shipment logs to IoT sensor updates. Traditional blockchains like Ethereum or Avalanche can handle such data but at high storage costs and slower speeds.
Hedera’s Consensus Service (HCS) provides a more scalable solution. It records ordered, timestamped events without requiring every node to store the full payload. This reduces network bloat while maintaining verifiability.
For instance, Avery Dennison’s atma.io uses Hedera to authenticate product origin and monitor logistics data, while other partners test it for food traceability and sustainability reporting.
Compared to VeChain, a network built specifically for supply chain transparency, Hedera’s differentiator lies in neutrality. Specifically, it is a multipurpose platform where supply chain is one of many enterprise functions — not the only one.
3. Payments and Micropayments
Hedera’s ability to process thousands of transactions per second, and settle them in seconds, makes it competitive with Solana. Solana boasts high throughput, but has suffered from occasional outages and network instability.
In contrast, Hedera’s asynchronous Byzantine Fault Tolerance (aBFT) architecture ensures uptime and predictable finality. Hedera’s native token HBAR enables microtransactions where the economics would break on networks like Ethereum or Bitcoin.
The micropayment app Dropp, for example, uses Hedera to allow users to pay a few cents for digital content without credit card fees. It’s a niche use case — but it illustrates Hedera’s potential in what could become the “sub-cent economy.” This is something that most chains cannot handle sustainably.
4. Hedera’s Role in Decentralized Identity and Data Integrity
Identity management has become a battleground for compliance-driven applications. However, only a handful of blockchains are actively pursuing decentralized identity (DID) solutions.
Hedera’s approach, powered by the Consensus Service, supports the issuance, verification, and revocation of identity credentials aligned with W3C standards. This gives it an advantage over competitors like Polygon ID or Solana Name Service, which focus more on crypto-native identity rather than enterprise identity compliance.
Hedera’s model offers verifiable audit trails without storing sensitive data on-chain. This aligns better with data protection regulations like GDPR. It’s not flashy, but for industries such as banking and healthcare, this subtle balance between privacy and accountability is critical. It still remains unmatched by most layer-1 networks.
5. Web3, Gaming, and DeFi
In Web3 and DeFi, Hedera trails in total value locked (TVL) compared to Ethereum, Avalanche, or BNB Chain, but its architecture offers advantages for transaction-heavy applications like gaming.
The HBAR Foundation has funded projects like SaucerSwap and HeliSwap, while Ubisoft, a Hedera Governing Council member, is exploring Web3 game infrastructure on the network. These developments mirror early-stage ecosystems on Solana or Immutable, but with an enterprise backing that could provide long-term credibility.
The trade-off? Hedera’s governance model — run by a council of 39 global corporations including Google, IBM, and Boeing — ensures stability but limits decentralization. Ethereum and Solana, despite being more volatile, allow broader community participation.
