Something New about Bitcoin Data Analysis, Essay Sample for You

Published: 2022-04-13 21:49:59
Something New about Bitcoin Data Analysis, Essay Sample for You
Type of paper:  Article
Categories: Data analysis Money
Pages: 3
Wordcount: 584 words
5 min read

Ethereum (ETH) is a decentralized platform that runs smart contracts. The smart contracts applications that are programmed to run as expected and without experiencing downtime, censorship, fraud or third-party interference. The smart contracts run on the custom-built blockchain, which is an enormously shared global infrastructure that can move around and represent ownership of property. This characteristic aids the developers to perform various activities such as creating markets, storing registries of debts, moving funds following instructions are given along in the past, and other things that are not yet invented. All these activities are known to work without a middleman or counterparty risk. The data below is extracted from an Ethereum blockchain and used to plot a scatter graph of the txVolume against the date. The txVolume represents the sum of transaction output of Ethereum mined in a single day. Since there is difficulty and imprecision when estimating and measuring change, change is not included in the output of Ethereum.

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The graph presents the volume of Ethereum that has been transacted from 10th August 2015 until today. There was a slow, steady growth in the size of Ethereum transacted up until around 6th March 2017 where there was a sudden rise in the volume of Ethereum transacted. On 14th January 2018, the highest volume transaction was recorded with a fall too low points until the first days April 2018. The exponential trend line shows a possible rise in the volume of Ethereum in the future markets.

The problem with extracting transaction volumes is the difficulty that arises when trying to obtain this volume from the blockchains directly. This difficulty results due to the improper maintenance of the balances of users but focuses on the outputs that were spent and unspent. For example, when a user wishes to send 7 ETH to another user and possesses 9 ETH in his/her wallet, during the transaction, it is the total 9 ETH that recorded as the input, and the two ETH returned as change. Hence, if the addresses used are both new, it is improbable to know the difference the change and the recipient address. In the above transaction, only one address is known and therefore, it is hard to know the change address. Hence, the estimate of would be the sum of the entire ETH instead of the amount that was intended. The results are nervousness among the users of the cryptocurrency.

Wallet such as the has access to transaction information of its users and therefore, can extrapolate such tendencies to blockchain at large. These extrapolations are probably based on some estimations used to arrive a number that is thought to be representative of the total value of the transaction of the Ethereum in a single day. Most wallets do not release data that is complete, making this estimation a difficult task. Hence, estimating change output is impossible. Introducing the plasma system is an excellent step towards achieving the scalability of Ethereum by making use of small contracts that will stay in contact with the main blockchain. Plasma system is described as a system of small contracts use to raise computation potential of the Ethereum blockchain. The main advantage that the plasma system offers is the reduced amount of data to be processed by the clients. Finally, Ethereum provides the promise of decentralized applications and is hailed as the "next internet." This reason can be said to be the cause of the expected rise in the volume of Ethereum mining as depicted by the exponential trendline.

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