Is Transaction Volume The New User Metric
How do we identify which project is worthy of investing in? Do we follow a new framework or adopt the existing framework?
A typical VC investor will want details of revenue, usage, and user acquisition. There are certain benchmarks they want a piece of software to exceed before they put money into it. They need to know what they're investing in truly has a market. But we have none of those metrics in cryptocurrency.
We have usage, but it isn't accurate. Usage depicts the number of direct participants who run a node on the network. But real usage goes far beyond that. Many people don't have their own nodes but very frequently use a network. Take Bitcoin itself for example. There are roughly 9500 nodes on the network. But the number of people transacting over the network is much higher.
For this reason, I believe the new "user acquisition" is transaction volume on the network. The amount of transactions shows real usage. It includes node and non-node transactions. This is likely to be the key indicator for network growth going forward.
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