- Ark Invest and Glassnode have released a proposal to redefine how to analyze data on the Bitcoin blockchain
- Dubbed Cointime Economics, the new way suggests viewing Bitcoin activities from the lens of blocks created and the number of coins
- Ark and Glassnode hope that the new analysis method will improve how activities on the blockchain are measured
Leading global asset manager Ark Invest and on-chain analytics platform Glassnode have jointly released a proposal fronting a new method of analyzing metrics on the Bitcoin network. Known as Cointime Economics, it seeks to make the chain’s outstanding supply the basis when interpreting data on the network. According to the two firms, embracing the new way will improve how activities on the blockchain are measured, a move that is easy to implement since it doesn’t require a change in the blockchain’s code.
BTC More Valuable when Not Moved
In a white paper, Ark and Glassnode disclosed that Cointime Economics intends to place a value on each BTC “based on the last time it moved,” adding that a Bitcoin that’s frequently transferred between wallets is less valuable than one that stays dormant in one wallet for years.
Is Bitcoin’s inflation rate underestimated? ARK’s @dpuellARK and @glassnode‘s @_Checkmatey_ explain why this may be the case in our new white paper, Cointime Economics. https://t.co/bdkmARE4HY
— ARK Invest (@ARKInvest) August 24, 2023
The new method introduces coinblock as the smallest measure of the Bitcoin blockchain’s state. They define coinblock as the number of blocks created when the chain is idling multiplied by the number of BTCs, calculations that would result in 144 coinblocks per 24 hours since the network creates new blocks in 10-minute intervals.
Cointime Economics Differs from UTXO
They further note that coinblocks are destroyed each time BTC is moved, an action that would accurately depict the actual network activity. The proposed method differs greatly from the current method, unspent transaction output (UTXO), which gives all BTC equal value.
The proposal comes when the Bitcoin network is experiencing a surge in activity due to the Bitcoin Ordinals project that brought NFTs and fungible tokens to the BTC-powered network.
Although the proposal is yet to be adopted by the Bitcoin community, it seems it’ll help depict the real activity on the Bitcoin blockchain.
