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Did Tron only make 122 online transactions today? This fantastic tool has insights, but attention to the limits.
Evaluating and correctly comparing different cryptocurrencies can be difficult, especially if you are trying to provide information at a glance.
But there is a lot of demand for this kind of information, especially from the newcomers to the space crypt who find themselves lost in a maze of thousands of different coins, some of which are very similar but completely different.
Different entities are facing this problem from different angles, none of which is perfect. For example, Binance enlisted third parties to populate the Binary Information section with detailed reviews, but ended up with a rundown of widely varying quality reviews, some of which are seriously questionable.
Elsewhere, conflicts of financial interests create skepticism, the blatant scandal is still rampant and honest attempts to criticize coins are objectively viewed with justified cynicism.
The most probable solution could be a transparent algorithmic review system; essentially just a formula in which you can insert a cryptocurrency and get information from. This is what CoinDesk is doing with the Crypto-Economics Explorer.
How the machine works
The Cypto-Economics Explorer explores five factors: price, exchange, network, social and developer. Among all, it uses bitcoins as a reference point. Basically, each of the bitcoin metrics in these areas is set to 100% and the other coins are measured against those.
- Price: This is the simple market capitalization. Measure as market capitalization as a percentage of bitcoins. Ethereum, for example, has a price score of 19.5%, because its market capitalization is 19.5% bitcoin.
- Exchange: This is a combined measure of the volume of exchanges of a currency in trade and its prevalence in trade. This measurement is divided into weighted sub-factors. The main one is the total trading volume, which accounts for 40% of the total exchange score. The other factors are based on measures of 16 selected stock exchanges and include the number of trades on which one currency is listed (20%), total trade pairs (20%) and the cipher volume (5%).
- Network: This is mainly the volume of chain transactions, modulated by other network factors. The main factor here is the volume of chain transactions (52.5%), along with daily data mining revenue (20%), chain transaction counting (20%), node counting (5%), and commissions on miners (2.5%).
- Social: This is the social buzz around the coins. A full 70% is related to Reddit, including subscribers to subreddit of the currency (20%), to online subscribers subreddit (20%) and to the number of posts and responses of Reddit (30%). It also measures the Twitter followers of a coin (20%), the search interest of Google for a given currency as a percentage of the total searches at a given time and place (5%) and I like Facebook for an account of cryptocurrency (5%).
- Developer: This factor is entirely based on the activities of GitHub, including GitHub observers (20%), contributors (20%), GitHub stars (20%), GitHub forks (10%), pull requests united (10%).
Crypto-economic exploration
When you proceed to crypto-economic exploration, you can get results in five metrics at a glance. So:
In this example you are looking at Ethereum (blue), Bitcoin Cash (green), Zcash (yellow) and Tron (black), and a look might tell you that:
- Ethereum is prominent and comprehensive in a number of factors, but has a particularly active developer community
- Bitcoin Cash is extremely prominent on social media. Part of this is buzzing around the current fork, based on how its social size has grown over the last two days according to the explorer, but even a month ago it was still exceptionally buzzing compared to the other coins shown here.
- Zcash does not have much social presence, which perhaps suits a privacy-oriented currency, but has many ongoing developments.
- The main strength of Tron could also be his community, with a lot of talk on TRX compared to other metrics.
Some insights to have
Keeping in mind how exactly these factors are measured, this could be an interesting way to get various ideas.
For example, it becomes apparent that chattiness and hype are not necessarily related to actual use.
In the case of Bitcoin Cash related to bitcoin, for the most part its network activity score is between 5% and 10% of bitcoins. It rose to around 18% with today's BCH HashWar, but it certainly was not a typical volume. Looking back, we can see that the preparatory migration of the hashrate started about a week ago, but it has really been kicked into an overdrive in the last two days.
But it is still a giant compared to most others. Tron is exceptional in this field, being the fifth "stronger" currency, but also having the lowest network score of all the coins on the chart. His network score is a 0.07% bitcoin almost unbelievably low. Part of this could be explained by the lack of miners, nodes and taxes on its network, but the number and volume of chain transactions continue to make up the bulk of its score, suggesting that almost no one is currently sending or receiving TRX, despite his chattiness.
In fact, according to the Crypto-Economic Explorer, Tron currently has only 122 transactions in the chain. You could adapt the number of people who actually use Tron in a small auditorium. The total volume of chain transactions is around $ 40,000, making the average transaction value around $ 328.
The only currency, among those available, with a network score lower than TRON is IOTA. It's coming to perfect zero, presumably because the volumes through its Tangle network can not be automatically measured as easily as the volumes on blockchains.
Stellar is also in a similar boat compared to XRP. It has the seventh highest social score at 20% (XRP is 40%), but its network score is only 0.10% next to 6.13% of XRP. Currently it is showing only 3,000 on chain transcripts related to the 430,000 XRP.
There is a huge gap between the effective use of some of the largest and most popular cryptocurrencies and the smaller ones.
Data limitations
Trying to decrypt data in too detailed terms highlights some of the limitations of the Crypto-Economic Explorer. It is worth paying attention when comparing apples with oranges.
Furthermore, it is important to consider how exactly each factor and sub-factor are measured. The developer's business is purely based on GitHub, for example, but Litecoin has already done so he explained his lack of GitHub activity saying he uses alternative workflows. If true, this would mean that Litecoin's developer metrics are distorted against it in Explorer.
Moreover, these metrics are mainly focused on the English-speaking world and do not necessarily include the probably rather heavy cryptocurrency of social activities on Chinese, Korean and Japanese social sites. Reddit is a very heavy weight in social scores, but tends to be almost entirely English speaking. Likewise, projects such as NEO, EOS and TRON could have some development activities on regional alternatives to GitHub.
There is also the potential for most of these weights to overburden older projects over time, as Reddit's mature subscribers do not cancel the subscription and do not incorporate permanent GitHub metrics that do not reflect current activity.
In addition, the data seem incomplete and it is worth bringing them with a pinch of salt right now. ETC does not show nodes, IOTA's network activity is not currently measured, the miner's revenue does not seem to count equivalent rewards as for EOS nodes, and so on.
It is still a new tool and, despite its current limitations, it is nice to have the answers at a glance. It could be a particularly useful resource if you're trying to compare apples with apples or if you want specific information, like the number of chain transactions for a specific currency, all in one place.
Disclosure: at the time of writing the author there are ETH, IOTA, ICX, VET, XLM, BTC
Disclaimer:
This information should not be interpreted as an approval of a cryptocurrency or a specific supplier,
service or offer. It is not a recommendation for trade. Cryptocurrencies are speculative, complex and
involve significant risks: they are highly volatile and sensitive to secondary activities. Performance
it is unpredictable and past performance is no guarantee of future performance. Consider yours
circumstances, and get their advice, before relying on this information. You should also check
the nature of any product or service (including legal status and relevant regulatory requirements)
and consult the relevant regulators' websites before making any decision. Finder, or the author, can
have participations in the cryptocurrencies discussed.
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