Cryptocurrency metrics; how do we measure the value, or viability.

Cryptocurrency

It involves the transfer of any type of currency via a blockchain, using decentralized and cryptographic protocols.

In this circumstances, the value of the data being transferred is resistant to fraud, and is being protected from negative features of traditional fiat currency, such as counterfeiting when this protocol is applied.

The structure of cryptocurrency made it a transparent, with it’s peer to peer system and unique nature made it to be considered as one of its many benefits, and the fact that it’s not able to be controlled by government centralise system and interference, organizations inclusive is another plus.

The most valuable cryptocurrency in the world is Bitcoin. Other cryptocurrencies include Litecoin, Dash, ZCash, Monero, Nano and many others.

The most important metrics of cryptocurrency includes: liquidity, price variance, daily trade/transaction volume, and last but not least, the number of non-empty wallets!

Liquidity

What every cryptocurrency wants to achieve is to become a viable choice of currency for day to day transactions. For this to happen, the cryptocurrency needs to be stable, which in turn increases its valuation.
This way, the price doesn’t fluctuate wildly whenever coins are bought or sold in large volume.

Price Variance

Like any stock market, trust, consumer confidence, and speculation play a large role in the volatility of the cryptocurrency. From a technical standpoint, network and security issues can also affect consumer
confidence, and thus the cryptocurrency’s volatility.

Daily Volume

Higher trading volume in crypto is very important and a good thing.  It makes it easier  for you to trade as It often leads to more stability and more liquidity for the market.  Though, lower volume assets may actually be more profitable in most cases  because they are subject to larger swings in price.

Just like any FIAT currency, the trade volume is also a good indicator of  how well a currency is performing. The trend with a lot of the smaller and  less-known cryptocurrencies was an initial boom, followed by a gradual
decrease in value over time. Cryptocurrencies that show a downward trend in transactions and trade volume eventually die out.

Non-Empty Wallets

This one may seem obvious, but healthy wallets equal a healthy
cryptocurrency. This data is usually publicly accessible, and it’s a good way to gauge how well a cryptocurrency is performing. If you see the number of empty wallets growing steadily, it can mean people are cashing out and moving to a new coin.

The brilliance of Bitcoin

Cryptocurrencies such as Bitcoin have captured the public’s imagination and investors’ fancy as a new pathway to wealth. Bitcoins traded as high as $4,000 in the last week of August, but as recently as 2010 you could have purchased a Bitcoin for a few pennies.

Part of Bitcoin’s mystique is its high technology, high security, and the massive computing power required to mine (or create) another Bitcoin.. We might think of Bitcoin as a type of artificial currency, an imaginary currency, or even a counterfeit currency, but, of course, it goes by the moniker “cryptocurrency.”

The brilliance of Bitcoin is actually the block-chain technology that underlies the currency. It is among the most secure online technologies available; it is virtually impossible to hack, manipulate, or thwart. In addition to artificial currencies, block-chain technology offers great promise as an extremely secure system for online interchanges and transactions..

The technology that underlies Bitcoin and other cryptocurrencies is part of the allure, the rationale, and the story. The technology mystique tends to make cryptocurrencies seem like something completely new, something legitimate, and something we should take seriously.

Let’s suppose, however, that we didn’t have any super new technology. Could we invent a new currency similar to Bitcoin? If we should find a large hickory tree with an extraordinary, one-of-a-kind chemical signature, then we could cut off some limbs and carve out a supply of wooden coins. Let’s call them “Hickcoins.” The ultimate supply of these Hickcoins would be fixed or quite limited. As the price of our Hickcoins goes up, we might cut off more tree limbs to make more Hickcoins, but the overall supply would be quite limited (at some point we wouldn’t have any more limbs to cut, and we would have to wait on new ones to grow).

So now we have created a new currency very similar in concept to Bitcoin. Its supply is very limited. It’s very secure (remember the unique chemical signature). Only one ingredient is missing, and that ingredient is faith.

Faith is what gives a currency its value. If a large number of people begin to have faith in our Hickcoins and start buying and hoarding them, the price of Hickcoins would start to rise. We could occasionally carve a few new Hickcoins, but we must remember to limit the supply for the price to rise. As the price rises, more people would want to buy Hickcoins, so the price would continue to rise.

Of course, the price would bounce around a lot, because sometimes some people lose faith.. We have created, in this little example, an artificial or counterfeit currency just as legitimate as Bitcoin.

The creator of Bitcoin, whoever she or he is, wowed the world with dazzling new technology and used technology’s “smoke and mirrors” to overcome our doubts and boost our faith. Rising faith in Bitcoin led to its rising prices.

These rising prices created more credibility and more faith, and even higher Bitcoin prices. Faith becomes easier and easier as the price rises higher and higher. And, when we want to believe – when we want the story to be true – our faith becomes even stronger.

As our collective faith grows, the price of Bitcoins (or Hickcoins) will continue rising and vice versa.

In short, there are many ways that you can measure cryptocurrency
performance. However, it’s good to check your sources and compare them since there are many biased and unreliable sources out there.

READ MORE:

New downloadable tool final secret — including crypto keys in public code.

Cloud minning

BitMEX Makes a lot in Fees from Derivatives Trading in One Single Day

Canada’s Central Bank May Handle Bitcoin ‘Direct Threat’ Through Launching Its Own Crypto.

Blockchain Hacking.

 

Credits: Jerry W Thomas, StefanAteljevic , Wikipedia.

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