As we have exhaustively covered, getting accurate estimates of the actual economic throughput of public blockchains is not a trivial task. Due to the existence of mixers, self-churn, privacy enhancements, spam, and change outputs (in UTXO chains), raw estimates of transactional value are often misstated by a factor of 10 or more.
On May 6th, 2017, Bitcoin hit an all-time high in transactions processed on the network in a single day: it moved 375,000 transactions which accounted for a nominal output of about $2.5b. Average fees on the Bitcoin network had climbed over a dollar for the first time a couple days prior.
Coinmetrics was created to publish hard-to-acquire data about major public blockchains, and to promote some ratios we thought were instructive. Since the founding of this website, the field of cryptoasset valuation has matured and grown significantly. The cryptoassets in question also continue to grow and change, meriting thoughtfulness about various analytical tools. While users are more empowered than ever, uncertainty remains about a) whether ratio analysis is appropriate, b) how to interpret major ratios, and c) the shortcomings of such analyses. In this piece, we’ll discuss ratio analysis and discuss its shortcomings and some common mistakes. As always, we urge skepticism and restraint in the interpretation of our data.
We are happy to report that this site is getting quite a bit of attention these days. We never anticipated this when we first decided to put together a public repository of cryptocurrency data. With lots of attention comes lots of trouble. One thing we’ve always worried about is how to carefully present data which is very noisy by its very nature.
As new asset classes emerge, parallel information markets spring up to accomodate them. After all, financial markets are simply mechanisms to compensate the informed. Ultimately, markets are information-discovery systems, and it’s no surprise that a huge set of cryptoasset information services have appeared in the last few months to cater to investor demand. Coinmetrics.io is one such entity.