The whole cryptocurrency market has been bleeding since the beginning of this year, right after reaching their all-time high. However, the past few weeks were recorded to be the worse for the cryptocurrencies has the price level took a new dip, with a majority of the cryptocurrencies being traded at its mid-2017 price. This includes Bitcoin [BTC], the largest cryptocurrency by market cap, XRP, Ethereum [ETH], Litecoin [LTC], and Monero [XMR].
Ethereum [ETH], the leading smart contract platform, turned out to be the most affected by the bear’s attack, with the coin even losing its second position by market cap to XRP. Additionally, the cryptocurrency gasped the investors as it took a swing below the $100-mark, and trading below that margin for some time.
Nonetheless, earlier this week, the market showed signs of the bull’s return, with all the cryptocurrencies slightly glowing in green. This became more apparent after all the currencies started rising by double digits, including Ethereum. This upsurge has resulted in the cryptocurrency trading above the $100-margin.
According to CoinMarketCap, at press time, Ethereum was trading at $104.66 with a market cap of $10.87 billion. The coin records a trade volume of $2.51 billion and has surged by over 11% in the past 24 hours. Along with the price, the cryptocurrency’s market cap has also seen a significant rise. At the beginning of the week, the market cap of Ethereum was estimated to be approx. $8 billion, currently recording over $2 billion hike.
The highest trade volume for the cryptocurrency is pictured on OEX, with ETH/ BTC trading pairs. The second on the line is OKEx, with the coin paired with Tether [USDT]. The rest of the exchanges in the top five includes RightBTC, ZBG, and Binance.
This occurs a few days after the official update regarding Ethereum’s Constantinople hard fork. The hard fork is scheduled to take place in Q1 of next year, around January 16. The core developer of Ethereum Foundation, Peter Szilagi announced on Twitter that the hard fork will take place at block number 7080000.
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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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