,
15 tweets,
4 min read
Read on Twitter
1/ Good report from Coin Metrics. Quantifying "usage" of a cryptocurrency is still generally undefined. It is good to see more objective analysis digging into this.
Generally agree with the data in the report but have some different interpretations.
Generally agree with the data in the report but have some different interpretations.
2/ Our view is that crypto networks are analogous to economies. There is not one unified metric to define the health of an economy. GDP is one variable, distribution of wealth is another (Gini coefficient), etc.
3/ In the early stages as these economies are just getting started, our view is that the most important metric is participation in the economy ie. how many people are transacting with the currency, not how much of the currency is being transacted.
4/ Economies have inherent network effects. The more people participating, the more value created; and the value creation is (n^2), not (n+n). So the highest leverage (and the hardest) thing is to first grow the size of the network, then increase the richness of the economy.
5/ To us, the best way to define someone actively participating in the economy is when they *spend* the currency (not exchange/trade the currency). Earning is important - and we do track it - but it's easier to give something to people than to get them to part with it.
6/ That's not to say other variables aren't important. There are many ways to evaluate crypto networks, and you cannot compare all cryptocurrencies the same, given they serve fundamentally different purposes i.e. governance tokens, work tokens, etc.
7/ However, for those that are used as money, the number one indicator at the outset is how many people are using it as money. Kin is money for the digital world, so we are focused on getting people using Kin as money, even if it is in very small amounts to start.
8/ Like the real world, many of us started with a low skill, minimum wage job. That gave us some initial purchasing power, that we could spend on small things. Then we started to move up the stack, into more specialized labor, and we could afford to buy more expensive things.
9/ This same pattern is happening with Kin. People get their first Kin through a "minimum wage job" ie. filling out a survey and then they can buy digital content. Next, users start creating content for each other and charging a premium, driving more demand for Kin.
10/ Now, with 50+ apps connected through the ecosystem, users can lean into their strengths and earn in one app where they are a "skilled laborer" and spend in another where they get the most utility. This is the connected economy. That (n^2) network effect becomes [(app*user)^2]
11/ As these crypto economies evolve, there will be more and more measures of health. We appreciate that others in the space are working through the options and validating/invalidating claims. That is the only way we can get to some standardization in evaluation.
12/ We do regular self audits and recently caught an error in double attribution of wallets to unique users. Here is a post from the team explaining/correcting: medium.com/kinblog/revisi…
13/ We encourage others to dig into the data and let us know if there are any vulnerabilities in what we are reporting - our aim is always to display the highest integrity data, that is the power of open networks.
14/ We would also love to see more uniform and generalized measurement across the space. It will be good for everyone to have a clear taxonomy, understand the strengths and weaknesses, the health of each economy, and for us all to keep each other honest.
15/ There are good teams working on this like @coinmetrics @MessariCrypto @flipsidecrypto
I'd be interested to hear of any others as well. We'd love to be collaborative.
We also publish all our data on kin.org/stats - would be good to get more validation.
I'd be interested to hear of any others as well. We'd love to be collaborative.
We also publish all our data on kin.org/stats - would be good to get more validation.
