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CoinDesk unveils the “Crypto-Economics Explorer”

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Tron only did 122 on-chain transactions today? This cool tool has insights, but beware the limitations.

Update 19/11/2018: Tron is now showing 1.4 million on chain transactions. The Crypto-Economic Explorer data may still be settling, and worth taking with a grain of salt for now. It's still pretty cool though.

Fairly assessing and comparing different cryptocurrencies can be challenging, especially if you're trying to deliver the information at a glance.

But there's a lot of demand for this kind of information, especially from newcomers to the cryptocurrency space who find themselves lost in a maze of thousands of different coins, some of which are very similar but completely different.

Different entities are tackling this problem from different angles, none of which are perfect. For example, Binance enlisted third parties to populate its Binance Info section with detailed reviews, but ended up with a scattershot of reviews of widely-varying quality, some of which are seriously questionable.

Elsewhere financial conflicts of interest create scepticism, blatant shilling is still rampant and honest attempts to critique coins objectively are viewed with justified cynicism.

The most likely solution then might be a transparent algorithmic review system; essentially just a formula that you can put a cryptocurrency into and get information out of. That's what CoinDesk is going for with the Crypto-Economics Explorer.

How the machine works

The Cypto-Economics Explorer explores five factors: price, exchange, network, social and developer. Across all of them it uses bitcoin as a benchmark. Essentially, each of bitcoin's metrics in these areas is set at 100%, and other coins are measured relative to that.

  • Price: This is straightforward market cap. It measures its market cap as a percentage of bitcoin's. Ethereum, for example, is given a price score of 19.5%, because its market cap is 19.5% of bitcoin's.
  • Exchange: This is a combined measurement of a coin's trade volume on exchanges, and its prevalence on exchanges. This measurement is broken down into weighted sub-factors. The primary one is total trade volume, which counts for 40% of the total exchange score. The other factors are based on measures from 16 selected exchanges, and include the number of exchanges a coin is listed on (20%), total trade pairs (20%) and fiat to crypto volume (5%).
  • Network: This is primarily on-chain transaction volume, modulated by other network factors. The main factor here is on-chain transaction volume (52.5%), along with daily mining revenue (20%), on-chain transaction count (20%), node count (5%) and miner fees (2.5%).
  • Social: This is the social buzz around coins. A full 70% is Reddit-related, including subscribers to the coin's subreddit (20%), online subreddit subscribers (20%) and number of Reddit posts and replies (30%). It also measures Twitter followers of a coin (20%), Google search interest for a specific coin as a proportion of total searches in a given time and place (5%) and Facebook likes for a cryptocurrency's account (5%).
  • Developer: This factor is entirely based on GitHub activity, including GitHub watchers (20%), contributors (20%), GitHub stars (20%), GitHub forks (10%) and merged pull requests (10%).

Crypto-Economic Exploration

When you go crypto-economic exploring you can get results across five metrics at a glance. Like so:

In this example you're looking at Ethereum (blue), Bitcoin Cash (green), Zcash (yellow) and Tron (black), and a glance might tell you that:

  • Ethereum is prominent and well-rounded across a range of factors, but has an especially active developer community.
  • Bitcoin Cash is extremely prominent on social media. Part of this is buzz around the ongoing fork, based on how its social measure has grown over the last couple of days according to the explorer, but even a month ago it was still exceptionally buzzy compared to the other coins shown here.
  • Zcash doesn't have much social presence, which perhaps befits a privacy-oriented coin, but has a lot of ongoing development.
  • Tron's main strength might also be its community, with a lot of chatter around TRX compared to its other metrics.

Some insights to be had

By bearing in mind how exactly these factors are measured, this might be an interesting way of getting various insights.

For example, it becomes apparent that chattiness and hype doesn't necessarily correlate with actual usage.

In the case of Bitcoin Cash relative to bitcoin, for the most part its network activity score is somewhere between 5% and 10% of bitcoin's. It's spiked up to about 18% with today's BCH hash war, but that certainly hasn't been a typical volume. By looking back you can see that preparatory hash rate migration began about a week ago but really kicked into overdrive in the last couple of days.

But it's still a giant compared to most others. Tron is outstanding in this field, being the fifth "loudest" coin, but also having the lowest network score of all coins on the chart. Its network score is an almost impressively low 0.07% of bitcoin's. Part of this might be accounted for by the lack of miners, nodes and fees on its network, but the number and volume of on-chain transactions still make up the bulk of its score which suggests that almost no one is actually sending or receiving TRX, despite its chattiness.

In fact, according to the Crypto-Economic Explorer, Tron currently has only 122 on-chain transactions. You could fit the number of people actually using Tron into a small auditorium. The total on-chain transaction volume is about $40,000, making the average transaction value about $328.

The only coin, of those available, with a lower network score than TRON is IOTA. It's clocking in at a perfect zero, presumably because volumes across its Tangle network can't be automatically measured as easily as volumes on blockchains.

Stellar is also in a similar boat relative to XRP. It has the seventh highest social score at 20% (XRP is 40%), but its network score is only 0.10% next to XRP's 6.13%. It's currently showing only 3,000 on-chain transactions relative to XRP's 430,000.

There is a vast gulf between the actual usage of some of the larger and more popular cryptocurrencies, and the smaller ones.

Limitations of the data

Trying to decipher the data in too much detail highlights some of the limitations of the Crypto-Economic Explorer. It's worth exercising caution when comparing apples to oranges.

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Plus, it's important to consider how exactly each factor and sub-factor is measured. Developer activity is purely based on GitHub for example, but Litecoin has previously explained away its lack of GitHub activity by saying it uses alternative workflows. If true, that would mean Litecoin's developer metrics are skewed against it in the Explorer.

Also, these metrics are primarily focused on the English-speaking world and don't necessarily encompass the probably-quite-heavy cryptocurrency social activity on Chinese, Korean and Japanese social sites. Reddit is a very heavy weight in the social scores, but tends to be almost entirely English-speaking. Similarly, projects like NEO, EOS and TRON might have some development activity on regional alternatives to GitHub.

There's also the potential for most of these weights to give inordinate weight to older projects over time, as they accrue Reddit subscribers who don't unsubscribe and pull in permanent GitHub metrics that don't reflect current activity.

Plus, the data appears to be incomplete and worth taking with a grain of salt at this point in time. ETC is showing no nodes, IOTA's network activity is not currently measured, miner revenue doesn't appear to count equivalent rewards such as for EOS's nodes, and so on.

It's still a fresh tool though, and despite its current limitations it's nice to have answers at a glance. It might be an especially useful resource if you're looking to compare apples to apples, or want specific information, such as number of on-chain transactions for a specific coin, all in one place.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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