Centralised or Decentralised? Data Analysis of Transaction Network of Hedera Hashgraph

Abstract: An important virtue of distributed ledger technologies is their acclaimed higher level of decentralisation compared to traditional financial systems. Empirical literature, however, suggests that many systems tend towards centralisation as well. This study expands the current literature by offering a first-time, data-driven analysis of the degree of decentralisation of the platform Hedera Hashgraph, a public permissioned distributed ledger technology, employing data directly fetched from a network node. The results show a considerably higher amount of released supply compared to the release schedule and a growing number of daily active accounts. Also, Hedera Hashgraph exhibits a high centralisation of wealth and a shrinking core that acts as an intermediary in transactions for the rest of the network. However, the Nakamoto index and Theil index point to recent progress towards a more decentralised network.