The New Year has brought a new standing ground for Ethereum [ETH] as the markets glows green. The coin which was the third largest until recently, has taken over XRP to become the second-largest coin on the top-10 cryptocurrency list. XRP slipped to the third position while ETH continues to grow by large margins.
At the time of press, ETH was valued at $150.22, with a market cap of $15.6 billion. The coin registered a 24-hour trade volume of $2.7 billion, with a growth of 10.40% over the past 24 hours. The coin has been gradually growing over the past few days and its overall spike is noted to be 15.36% in a week. The coin is still pumping by 1.74% in an hour.
The coin is being traded in high volumes on various exchanges. The exchange to registered the highest volume for ETH is OEK. It registered $166 million trading volume on the ETH/BTC pair. OEX was followed by OKEx, which noted a volume of $114 million on the ETH/USDT pair. The third position was taken by Huobi, with a volume of $102 million on the ETH/USDT pair.
The community was losing its faith on the coin as it was appeared to be stagnated for a long time, however, as the new year began, the coin flourished and reinforced the community’s belief in the now second-largest cryptocurrency.
Ethereum was also in the news recently when its co-founder, Vitalik Buterin, was asked to help review Tron white paper by Tron’s founder and Chief Executive Officer [CEO] Justin Sun. On this, a Tron enthusiast, Misha Lederman, had said:
“A developer as gifted as @VitalikButerin should most definitely consider to start working with a visionary, entrepreneur, CEO, student of history & politics, under Jack Ma & many others, such as @JustinSunTron in order to jointly grow blockchain adoption & technology together.”
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Coin Metrics data reveals inaccuracies in Kik’s claim of being as dominant as BTC, ETH blockchains
Upon investigating Kik’s claims in response to SEC’s lawsuit filed earlier this month, CoinMetric data reported inconsistencies in the on-chain activity and adoption rate of its native token, Kin.
In a study dubbed, “An Analysis of Kin’s On-Chain Activity,” the crypto-asset elaborated on the two assertions made by Kik in its letter to the US Securities and Exchange Commission.
Kik’s first claim was regarding its blockchain activity. Its in-house token, Kin, supposedly exceeded Ether and Bitcoin to record the fifth highest daily blockchain activity. This was debunked by CoinMetric’s investigation after taking into account its “Operation Count” [the same metric used by Kik to support their claim] and “Transfer Value.”
In terms of the Operation Count, the report explained,
“According to Kik’s source for the metric, “blockchain activity” is defined as “the number of operations on the blockchain in the last 24 hours.” Operations are broadly defined as any type of action that could be recorded on chain. But operations are not standardized across blockchains which makes comparing across chains difficult.”
Besides, drawing parallel comparisons across blockchains with radically different use cases and operations is difficult.
Although Kik’s original research showed a high number of account creations, Coin Metrics data revealed that many of these accounts were empty.
Additionally, Kin’s “create account” operation has a fee of .001 Kin. The report highlighted that a metric such as “operations count” for the purpose of blockchain activity cannot be used as a measurement tool since Bitcoin and Ethereum blockchains do not track account creations on-chain.
In terms of Transfer of Value, the report elaborated,
“Theoretically, high daily transfer value should signify high activity. But transfer value is often quite noisy, especially on low fee blockchains where there are minimal costs to sending transactions. Some transfers might simply be users moving money around between addresses they own”
Instead, Coin Metrics contrived “adjusted transfer value” metric to eliminate what it called, “noise and certain artifacts like self-sends, or deliberate spammy behavior.” Coin Metric noted that this gives a clearer picture of the on-chain activity, resulting in a decreased transfer value when compared to other blockchains, even if it had a high number of daily blockchain operations.
Additionally, Kin’s average transaction value was also low, when compared to other blockchains. For the first claim, Coin Metrics concluded that the Kin platform had more micro-transactions than Bitcoin and other dominant blockchains, while highlighting the fact that the latter blockchains are not primarily used for such transactions.
Regarding Kik’s second claim that said that over 300,000 users were earning and spending Kin as a currency, Coin Metrics assessed its blockchain usage. The number of addresses is not necessarily equal to the number of users since a single user could have multiple addresses. Hence, Coin Metrics took the number of active users into account, which the report defined as “the number of unique addresses that were active in the network [either as a recipient or originator of a ledger change] during that day.” The report noted,
“Kin 2 has significantly more originating active addresses than Kin 3. Although Kin is in the process of migrating to Kin 3, it appears that Kik is using data from the Kin 2 chain to support their claims about usage.”
Further, Kin 2 and Kin 3 had more active addresses that received payments than originated payments, which meant that there were more “earners” on Kin than “spenders,” also noting that only 35,000 addresses held over 10,000 kin [nearly $0.23]. The report added that the figures are lower than other blockchains which have a minimum of 1,000,000 addresses with at least $1.
After examining multiple critical aspects, Coin Metrics concluded that Kin fell below dominant blockchains in terms of daily active addresses, despite maintaining steady growth. It said,
“A majority of Kin’s active addresses have small account balances. While this makes sense for a network built around micropayments, when viewed across multiple metrics, our data show that Kin is not more widely used than dominant chains such as Bitcoin or Ethereum.”
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