Altcoins Talks - Cryptocurrency Forum
Archive => Sorting Box => Topic started by: NewspaperD2 on September 13, 2023, 03:28:24 AM
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1. Onchain Metrics:
*Transaction Count: The number of transactions is a good measure of activity on the network. By charting the number of transactions over predefined time intervals (or using moving averages), you can observe how activity changes over time. Note that this metric should be researched and handled with caution, as it's possible for one party to transfer funds between wallets to inflate the transaction count.
*Transaction Value: Transaction value tells you the total value transacted over a specific time period. For example, if ten Ethereum transactions, each valued at $50, occur in a single day, the daily transaction volume would be $500. This can be measured in a stable currency like USD or in the protocol's native token (e.g., ETH).
*Active Addresses: Active addresses are blockchain addresses that have been active during a specified time frame. There are various methods for calculating this metric, such as counting the senders and receivers of transactions within defined periods (e.g., daily, weekly, or monthly). Some methods track the total number of unique addresses over time.
*Fees Paid: Transaction fees can provide insights into network congestion. Think of these fees as bids in an auction: users compete to have their transactions confirmed quickly. Higher bidders will get their transactions mined sooner, while lower bidders may experience delays.
*Hash Rate and Staking: Hash rate is often used as a measure of a network's health in Proof of Work blockchains. An increasing hash rate may indicate growing interest in mining due to low input costs and high potential profits. Contrary, a declining hash rate may suggest miners are going offline because network security is no longer profitable. Factors affecting mining costs include current asset prices, transaction volume, and fees, as well as direct mining costs like electricity and computational power.
2. Project Metrics:
Whitepaper:
Technology Used (e.g., open-source)
Use Cases
Upgrade Roadmap and New Features
Token Supply and Distribution Plan
#DevelopmentTeam :
Experience and Track Record
Past Successful Projects
Technical Expertise
Involvement in Suspicious Projects
*Competing Projects: Identify competitors and assess the infrastructure the project is trying to replace. While an asset may seem attractive on its own, comparing similar metrics to other similar assets can reveal its relative strength.
*Tokenomics and Initial Distribution: How were tokens distributed, whether through ICOs, IEOs, or mining? In the first case, the whitepaper should detail how many tokens the founders and #DevelopmentTeam hold and how many are available for investors. In the second case, evidence of early mining can provide important clues.
3. Financial Metrics:
*Market Capitalization: Calculated by multiplying the circulating supply by the current price, market capitalization represents the hypothetical cost to acquire all available units of a cryptocurrency at its current market price.
*Liquidity and Volume: Liquidity is the ease with which an asset can be bought or sold without affecting its price. High liquidity means you can sell your asset at or near its current market price. Trading volume measures how much of an asset is traded over a specific time period, reflecting market activity.
*Supply Mechanisms: Total supply, circulating supply, and inflation rate can influence investment decisions. Some cryptocurrencies decrease the rate of new units produced over time, making them appealing to investors who believe demand for new units will outstrip their availability.
Remember, cryptocurrency investments carry risks, and it's essential to conduct thorough research and exercise caution before investing in any asset.
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Hi,
I want to share some valuable insights about the key indicators every investor should consider before diving into the world of crypto assets. These indicators have been my compass in navigating the exciting yet often unpredictable crypto market.
Market Cap: Check the cryptocurrency's market capitalization. It reflects the total value of the coin and its relative size in the market.
Trading Volume: Higher trading volume indicates liquidity and strong market interest, reducing the risk of price manipulation.
Team and Development: Research the team behind the project and the ongoing development. A strong, experienced team is often a good sign.
Use Case: Understand the purpose of the cryptocurrency. Does it solve a real-world problem? A clear use case can indicate long-term viability.
Community and Social Media: Gauge the community's engagement and activity on social media. A vibrant community can drive adoption.
Partnerships and Adoption: Look for partnerships with established companies and signs of adoption by businesses or institutions.
Security: Assess the security measures in place, especially if you plan to hold the asset long-term.
Regulatory Compliance: Ensure the project complies with relevant regulations in its operating jurisdictions.
Roadmap: Review the project's roadmap to see its future plans and milestones.
Price History and Trends: Analyze the asset's price history and current trends. Technical analysis can provide insights.
Remember, crypto investment comes with risk, and thorough research is your best friend. These indicators can help you make more informed decisions, but always consider your risk tolerance.