How to Measure a Coin’s Value Through Active Blockchain Addresses
There are several investors that are entering the virtual currency market. However, most of the bets on these crypto assets are speculative. Investors are waiting for a future price increase that would let them have important returns. But how to analyze blockchain projects and virtual currencies?
A useful way to understand how these networks work is to study the overall project. It is possible to see the relative differences between the number of decentralized applications (dApps) and their activity on the network.
Let’s have a look at two of the most important networks in the market, Ethereum and EOS. Ethereum, the second most important blockchain network in the market with $23 billion dollars market capitalization has only 4 dApps with more than 500 daily active users. EOS, the fifth network by market capitalization ($4.75 billion dollars), has also 3 dApps with more than 500 daily active users.
Clearly, this is a solid metric to understand the degree of development and engagement of a certain blockchain network. But there are also several other ways to understand how a network works. One of these measures is the daily address activity.
According to OnchainFX just 26 blockchains have more than 400 active addresses in the last 24 hours. There are some smaller cap coins that have shown a significant better ratio between their market capitalization and daily active wallets.
There are some cryptocurrency projects such as Tron (TRX) that have a very low number of active addresses. Even when some days ago, the number of addresses increased compared to the one of EOS. There are just 663 active addresses in the last 24 hours using the Tron network. In the future, the project could focus on having more engagement from its users.
EOS, at the same time, has 58,163 active addresses, 86 times more than Tron. Nonetheless, EOS’ market capitalization is just 3,5 times higher than the one registered by Tron.
Analysing network usage through daily active addresses and users per dApp is a great strategy for understanding cryptocurrency projects. It is also possible to combine this data with other important information such as the number of transactions, the amount of funds transacted in 24 hours, and more.
The most important networks by active addresses are Bitcoin (BTC), which is used to store funds and process transactions. Ethereum (ETH), clearly used for dApps and to run smart contracts. Finally Litecoin (LTC), which is used to send and receive funds. They have 664,157, 306,686 and 88,915 active addresses respectively.