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How is a cryptographic asset measured? For years, the easy answer was to look at its price.
When we launched the Bitcoin Price Index (BPI) – the world's first bitcoin index – in September 2013, we were at the forefront of creating an average price using multiple exchanges. The goal was to create a reference rate for a new form of activity that would help to be better understood in its journey towards greater adoption.
Since then, the BPI has established itself as a gold standard for journalists (our own and others), researchers and investors, while bitcoin, the oldest and most precious cryptographic resource in the world, has given rise to a new economy.
But the cryptographic resources market has expanded considerably and it is no secret that this growth has surpassed the understanding of what remains an innovative technological phenomenon.
As the market grew in complexity, there was no shortage of data providers rushing to the market. But how strong were their intuitions?
Often excluded from the tools available there are many essential elements that we know have pushed the growth of cryptographic resources – the developer's interest, social activity, even the use of the blockchain of a crypto asset.
In CoinDesk, we believe we have created a more complete way to view cryptocurrency market data, a unique product that, for the first time, allows anyone to view a complete picture of a crypto asset market .
Rather than just the price, our tool is based on the full range of data that is now being evaluated in the crypto-economics field, a word that, although perhaps not familiar, has come to describe the study of asset economies .
Since its advent, the discipline has been developed and perfected by industry leaders. Now for the first time, let's put these factors at your fingertips, for your exploration.
A measurement tool
The CoinDesk Crypto-Economics Explorer is a tool designed to offer a more complete picture of the economic activity for cryptographic resources. With our new data analysis product, you can explore to what extent exchanges support their economy and if developers are actively working to improve their code base.
The result of our work is a suite of 28 factors related to price, exchange, network effect, the developer base and social data that allows you to measure cryptographic assets one against the other. other and against bitcoins.
To normalize our data, we created the Bitcoin benchmark, which simplifies the comparison between bitcoins and other cryptographic resources.
You can read the full description of Crypto-Economics Explorer here.
The benchmark is a weighted price index based on the volume it draws from market prices in 16 different exchanges. We take these prices, as well as market capitalization, and compress this information into a single data point.
This takes the form of a percentage that can be used to compare the price activity of any resource related to bitcoins.
Beyond prices
But as we said, looking at the price is just a way to measure the health of a network, one that does not exactly tell whether a cryptographic asset is actually Used.
Our Exchange benchmark seems to expand what is currently being monitored including factors such as the total value of traded transactions and trading volumes.
However, we do a series of other questions. How many exchanges list the cryptographic asset? How many trading pairs does that activity between the stock exchanges? And what volume of legal currency is exchanged for: a good indicator of the amount of liquidity that moves in and out of encrypted exchanges.
Our network benchmark examines the specific data points of the blockchain in question such as the number of chain transactions, the mining profitability and the number of nodes running the software. The combination of these data points can show us how the network attracts miners, traders and other key economic actors.
Our developer benchmark tries to measure how active the resource base of a resource is, answering questions such as: How many developers are working on the protocol? How much code is proposed, tested and committed on GitHub?
Our social benchmark demonstrates a unique phenomenon in cryptography: discussions, debates and even governance take place mainly on social networks. This data point measures the number of followers and subscribers of a project on multiple platforms and tries to indicate how much interest there is in the network.
These five scores, if combined, provide the first rankings of Crypto-Economics Explorer with reference to bitcoins.
To be clear, a resource can have benchmark scores higher than those of bitcoins and we expect to see it fully by looking at growth and development for years to come.
Getting involved
What you see today is only the first version of what we hope will become the industry standard to visualize the health and growth of the world's major cryptographic resources.
We are already developing new ways to examine and explore the vast amount of data produced by cryptocurrency networks and send them as part of our broader development roadmap for Crypto-Economics Explorer.
In short, the tool you see today will change, evolve and grow along with the ecosystem itself and we hope that you, our users, can be part of that process.
If you work with a project that is not represented in Crypto-Economics Explorer and you want to see your data represented, we are happy to work with you to collect this data and add it to Crypto-Economics Explorer.
Send an email to our research team to share more information.
We encourage you to use the tool, compare various assets and tell us what you think.
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