The data shows that only a small number of coins and tokens have any significant user base.
We know that bitcoin has a large and reliable user base – it’s true, people who really HODL it or use it, keep it in their own crypto wallets and make real transactions, instead of just trading on stock exchanges. You can quite easily find this information with the help of a blockchain. The same is with Ether. People keep it and carry out transactions, and also develop real applications with the help of its smart contracts.
But is it possible to say the same about almost 2,000 cryptocurrencies that exist now?
I afraid that no.
Let’s check the site https://onchainfx.com/ to compare not only prices and market capitalization (which are the only things that excite most people) but also active addresses (sent/received in the last 24 hours) and the number of daily transactions.
Then there is a sharp decline. There are only 19 cryptocurrencies with more than 1,000 active addresses. Only 21 transactions are performed more than 1,000 transactions per day.
Everything is not as bad as it seems. Onchainfx does not provide data for all cryptocurrency, so there are obvious omissions here. For example, there are no active addresses or the number of transactions for Waves, which is an incredibly active network, with an average of 40,000 transactions per day, as of the current month, which puts it before Litecoin according to this evaluation criteria.
On the other hand, there are some anomalies: Bitcoin Cash, for example, carries out twice as many transactions per day as Bitcoin Core but has less than 10% of active bitcoin addresses. Undoubtedly, some fraud is being made here, because it is clearly not pure data. Spammer or stress test or just good old fake tx volumes can distort figures.
Nevertheless, the general picture for most cryptocurrencies is not very good. There are small communities with very few real users. Of greatest interest is the small number of cryptocurrencies that have a real active user base. The network effect matters and these communities will give their detainees the greatest chance of long-term success.
And, of course, a deeper analysis of this list can show some interesting opportunities for buying initially undervalued coins.