As many users started using cryptocurrency, developers have created the Bitcoin price metric to make it easier for them to track and maintain their crypto wallets. They can now check the price history, market capitalization, price tracker and even live charts for available cryptocurrencies such as Bitcoin, Ethereum, Litecoin and more.
Bitcoin has created approximately 21 million bitcoins and new coins are mined every 10 minutes. These users help regulate the network by adding transactions in the blockchain, making sure it can maintain its flow without compromising the price of one crypto coin. According to experts, the key metric fell by 60% during the first few months of 2020, following the outbreak of a worldwide pandemic.
Crypto analytics from Glassnode mentioned that Bitcoin’s market value dropped to zero on March 13 and settled at -0.18 three days after. Bitcoin also experienced a huge rejection of $10.9K and hit bottom at $10.2K on the later months of the year. Due to the latest KuCoin’s hacking incident, BitMEX’s multiple legal violations, and the United Kingdom’s decision to ban cryptocurrency derivatives exchanges, the trends have shifted immediately, creating a huge loss in the market. Curious about how it works? Learn how to understand bitcoin price metric below.
How metrics work
Usually, Bitcoin price metrics can be found in blockchain explorer sites that allows you to track them in real-time. You can see the latest blocks that have been used for recent transactions and they are divided into categories such as the height, age, transactions, total spent, relayed by, size and its weight.
The height of the block tells the origin of the block count by its first digit. Blocks with the height of 0 are the first ever created block, making it ancient in the whole crypto space. Meanwhile, the block age category allows you to track how much time has passed since it was mined. You can see it in minutes or hours depending on the movement of transactions in the market.
On the other hand, the transaction category determines the number of exchanges made using a single block. It varies depending on the size of each transaction as long as it follows the general rule of 1MB size. Meanwhile, the total spent shows the amount of Bitcoins used for exchange in each transaction and the ‘relayed by’ category specificies the mining pool it came from while the size and weight indicate these measurements for each block.
In case you want to know how huge cryptocurrency is, you can simply multiply the price of the coin by the circulating supply to get the market cap. The market capitalization is the measure of the market size while the circulating supply is the total amount of Bitcoins in the market and in the user’s hand. If the circulating supply increases, this is an indication of a growing market capitalization.
The hash rate is also an important factor you should consider if you want to delve deeper into the bitcoin price metric. It indicates the speed of completing a single transaction in the Bitcoin network. Meaning, the higher the hash rate is, the more chances for it to find the next block and receive the reward. It also has its own chart where you can see the increase and decrease of percentages within the given period.
However, finding the next block in the network is difficult. According to reports, 2016 blocks usually take two weeks to find the next block but the more it increases, the more the difficulty reduces. On the other hand, if the process takes less than two weeks, the difficulty rises. Additionally, you can see different mining pools in the metrics and how many coins they hold under their platforms. Some of them include Bitcoin Russia, BTCC Pool, Kano Pool and more.
Another term you must know is the mempool. It is where miners can pick transactions before confirming it in the blockchain. It also indicates the current size of the pool in bytes. If the size is big, it means that there are multiple transactions waiting while a small mempool indicates there are only few transactions available in the market. Additionally, you can also check the amount of transactions on mempool in the metrics.
Median Confirmation Time
Once all miners have picked their transactions, it will now proceed to the public ledger, visible to all users. In case you want to know the amount of time it took for it to be accepted in the blockchain, you can check it in the Median Confirmation Time. However, it only includes transactions with miner fees.
The ‘Median Confirmation Time’ chart indicates the average minutes it took in real-time, making it more interesting to use cryptocurrencies. Additionally, the higher the miner fees you pay, the faster your transaction will be mined in the mempool.
Total Transaction Fees
On the other hand, the total transaction fees are the fees paid to miners exclusive of coinbase value of block rewards. The total transaction fees skyrocketed to its peak in December 2017 and dropped immediately afterwards. Additionally, the bitcoin price metric also indicates the total confirmed transactions per day, averaging a total amount of 150,000 to 200,000 for the last 6 months of the year.
Aside from the total transaction fees, you can also find the number of unique addresses used in bitcoin transactions per day. The bitcoin exchange process goes from private key to public key to public hash and to the bitcoin address. Not only does the total transaction fees surged to a huge increase in 2017 but there are also several unique addresses used around that time, which can be an indicator that many users are now utilizing cryptocurrencies.
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