BIS Finds Sixfold Gap in Measuring Bitcoin Activity
The Bank for International Settlements (BIS) has released research highlighting significant differences in how Bitcoin's economic transaction value is measured. According to the study, various methods used to estimate Bitcoin's value can produce measurements varying by as much as a factor of six.
The researchers identified three main measurement problems: transaction aggregation, smart-contract programmability, and cross-chain comparability. They found that these issues can create an illusion of statistical precision in on-chain data.
The study also highlighted the importance of considering the methodology behind on-chain metrics when analyzing Bitcoin's activity. The authors noted that a chart labeled simply 'Bitcoin transaction volume' is not enough for market analysis, and that investors should check whether change outputs have been removed, transfers between addresses belonging to the same entity are excluded, and exchange wallet reorganizations remain in the dataset.
The BIS research compared Bitcoin's activity with that of Ethereum and Tron, highlighting the challenges of comparing networks using headline transaction volumes. The authors emphasized that raw protocol activity and economic activity are different datasets hiding inside the same ledger.