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Taking crypto’s pulse: ‘Price’ alone is a deceptive metric

While the steep drop in crypto’s market cap has been bad news for investors, there are a significant number of positive developments in the sector which unfortunately have been overshadowed by price action.

2018 has been a bad year for digital asset investors, which came as a stark contrast to the 2017 bull market. Bitcoin has lost over 75 percent while the majority of altcoins are down by over 90 percent year-to-date.

To determine the health and the growth of the cryptographic asset market, it is prudent to consider other metrics. Using the Ethereum network as a proxy for the greater digital asset sector, we can deduce that there are other factors that provide insight into how well a blockchain network is performing.

In this article, we will discuss recent data from the Ethereum network published by ConsenSys, which suggests that although ETH has been one of the biggest losers in 2018 in terms of value – the Ethereum network is actually performing better than its token’s price suggests.

Price is important, but so are other metrics

Ethereum’s digital token, ether (ETH), has dropped from its all-time high of $1,417 in mid-January to its current value of around $92. This marks a 93 percent price decline in 2018. However, it is important to note that the price should not be the only metric to be taken into consideration when evaluating a blockchain network – both as an investor and from a business impact point of view.

According to a report compiled by ConsenSys, the number of daily ETH transactions has remained steady despite its drop in market value — with average daily transaction numbers consistently around 610,000..

Furthermore, the overall number of transactions processed on the Ethereum network increased by a significant margin. Climbing from 240 million transactions in June, the number of transactions now stands at 353 million. The increase is an almost 50 percent rise in the past six months despite falling token value.

In March 2018, the Ethereum network transacted 50 million ETH per month, falling to 20 million per month in July and 16 million per month in November. However, in an interesting twist, the average amount of ETH transferred per transaction more than doubled in the period between July and November. The average ETH per transaction went from two ETH to a little under five ETH.

Additionally, the Ethereum network saw a significant increase in wallet addresses. From the 13 million addresses recorded in December 2017, the number grew to almost 49 million unique addresses. From the period of June to present day, this figure grew by 14 million, up from 39 million.

It is also important to note that the average amount of time that these addresses were used saw an increase as well in the same time period. This suggests that users were not creating new addresses only to abandon them but were actually actively participating in the Ethereum network.

Developers on the Ethereum network

Ethereum is the market-leading blockchain platform for smart contracts and decentralized applications. Since June, the rate at which smart contracts were created and deployed has grown substantially.

The number of Ethereum smart contracts reached one million in October and continued to rise, hitting the 1.5 million mark by November. Moreover, calls to smart contracts have been consistent at 1.2 million per day since late 2017.

Applications and tools relevant to the Ethereum network have also seen an increase in downloads. For instance, the Web3 browser extension MetaMask achieved one million downloads in April, with an added 200,000 since then. The Truffle Framework, a set of tools designed to help developers successfully create and deploy smart contracts and DApps, has been accessed consistently throughout the year. Truffle is downloaded an average 100,000 times per month, while Ganache, a complementary tool necessary for running smart contracts on a trial basis, is also downloaded at a regular rate.

Interest in learning how to use Solidity – Ethereum’s coding language – has also blossomed. To demonstrate, a live app called CryptoZombies designed to teach people to code smart contracts on Ethereum, saw an increase by a factor of 1.5 since June this year. This suggests developers are working on innovating and deploying more DApps on the Ethereum network despite the fall in the price of the ETH token.

Mining metrics

Miners on the Ethereum network have stayed at the steady number of around 11,000 active nodes throughout the 2018 bear market. Fees charged per transaction have also been constant in the same time period.

A look at the Ethereum community on social media platforms, such as Reddit, demonstrates a growing interest. Reddit’s r/ethereum community more than doubled in users from 176,000 in early December 2017 to 418,000 in December 2018. Applications, such as the micro-task platform Bounties Network, which is based on the Ethereum network, also saw skyrocketing user engagement. Lastly, investment in Ethereum-based applications continues to gain steam.

Considering all the above-mentioned factors, it is obvious that the Ethereum network is far from approaching its death despite what many Ethereum bears may be saying. Perhaps more pertinent, however, is that many of these metrics can also be looked at for other blockchain networks that have experienced growth in terms of users, applications, and adoption despite this year’s bear market.


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