Hedera Hashgraph achieved a significant milestone this week, surpassing 10 billion transactions. However, despite this achievement, the native cryptocurrency of Hedera, $HBAR, did not experience the expected increase in excitement and activity.
HBAR Explained
$HBAR serves as the native currency of the Hedera Network and plays a crucial role as fuel for its ecosystem. It is utilized for various purposes within the network, including paying for network services such as NFT and FT creation, covering network fees, and executing smart contracts.
Hashgraph Architecture Explained
Hedera itself is a Layer 1 hashgraph DAG. Unlike traditional blockchains, hashgraph DAGs do not have a predetermined sequential ordering or direction. Instead, the architecture of the hashgraph consists of interconnected columns and vertices formed by blocks that store transaction data instead of a linear chain. This graph structure is created by signing and adding every block proposal to the hashgraph, regardless of the size or type of data stored.
This approach provides a more comprehensive and robust view of network activity than blockchain. In a hashgraph, data is uploaded to the graph randomly through communication between nodes. Each node copies and stores a record of the hashgraph, enabling the sharing of transaction data and records among nodes. This collaborative approach ensures distributed and secure data storage within the network.
Status of Hedera Network Activity
In Q1 2023, an analysis conducted by Messari unveiled remarkable growth in Hedera’s network activity. Daily active addresses experienced an impressive surge of 170%, representing the highest recorded growth in Hedera’s history. This surge served as an indicator of the network’s momentum and expansion.
The surge in network activity coincided with substantial volume increases in January and March. The influx of liquidity positively impacted Hedera’s market capitalization, underscoring the market’s recognition of its potential and value. However, an intriguing trend emerged as the peak volume in April failed to reach the market cap peak witnessed in February.
Although Hedera encountered a notable exploitation incident in its Smart Contract Services code on March 9th, it still surpassed 5 billion transactions on the same day.
Despite reaching significant transaction milestones, the price of $HBAR has been underperforming since its annual high of $0.098. In addition, technical indicators such as the 20-day and 50-day simple moving averages, relative strength index (RSI), and moving average convergence/divergence (MAC-D) hint at prevailing selling pressure and the dominance of bears in the market.
Looking at the network activity in Q1 2023, Hedera witnessed a surge in daily active addresses, transaction volume, and market capitalization. However, $HBAR’s price performance has yet to match the network’s achievements. While the cryptocurrency experienced a bullish start in January and during the first half of February, it has since maintained a downward trajectory.
In Q2 2023, Hedera’s performance has been relatively slower compared to Q1, and the cryptocurrency has struggled to overcome its short-term stagnation. $HBAR has observed accumulation, but the buying pressure has not been sufficient to facilitate a strong rally. Low investor sentiment and volumes have contributed to the challenging market conditions.
Nevertheless, despite $HBAR’s price performance, Hedera Network has demonstrated growth and expansion. In 2022, Hedera remained committed to building and expanding the network, achieving significant growth in services and milestones.
Recent Developments
In Q1 2023, the network continued to experience robust financial performance, reaching new all-time highs in activity and market cap. The network’s circulating market cap surged, revenue increased, and there was a substantial rise in transaction volume, primarily driven by the Hedera Consensus Service. In addition, Hedera’s native token, $HBAR, witnessed an increase in circulation, and the network saw a surge in account-related metrics.
Looking Ahead
Hedera’s focus on building a supportive ecosystem for developers, establishing strategic partnerships, and appointing strong leadership showcases its dedication to long-term growth. Hedera aims to expand its DeFi, NFT, and gaming ecosystems while continuing to develop the network’s services.
Despite tough competition, Hedera remains committed to innovation and delivering products and services. With its strong financial performance, increased network activity, and ongoing developments, Hedera demonstrates its potential and determination to foster growth in the blockchain space.
