# # Glossary of DLT/Blockchain terms

### # Adjusted Network value

The adjusted network value is the network value adjusted for coins that have been generated but not yet entered into circulation. The largest portion of non-circulating coins are held by the creator of bitcoin, Satoshi Nakamoto.

### # Average Transaction Value (Ave Tx)

The average transaction value is the total transaction value over the period divided by the number of transactions.

### # Complexity

Network complexity or darkness identifies unusually complex spending patterns. The complexity number represents the number of attempts required to trace the direction of the intended output.

### # Cumulative Charts

The cumulative charts track Transaction Value, Number of Transactions, Generation, 1st Spend and Fees on a cumulative basis. We always view blockchain data in full weeks due to the weekday bias.

### # Difficulty

Difficulty is a parameter that proof-of-work crypto-assets use to keep the average time between blocks steady as the network's hash power changes.

### # Generated

Generated is the number of new coins minted during that period.

### # Fair Value

The fair market value describes a network value multiple with respect to on-chain transaction volume (the economic value of transactions in USD terms). The fair value is calculated on the network’s median NVT-BT ratio.

### # Fees

Fees are the cost of sending a transaction over a network. The fees are paid to miners as a reward for their work on securing the network.

### # First spend

First spend tracks the number of coins that move from the miners' wallets over that period. Coins that have been mined and not distributed are registered in inventory.

### # Hash

Hash is the unique identifier for each block or transaction.

### # Hashrate

Hashrate is the number of computing operations done in a given amount of time. This compute power (hashing power) is used by miners to add transactions to the blockchain.

### # Height

Height is the total number of blocks in the chain. The first (or genesis) block is one. The height shown is the latest block number.

### # Inflation

Inflation is the annualised growth rate of total coins in the network. In a Proof of Work (PoW) network, inflation is determined by the current hash rate and difficulty.

### # Inflation (adjusted)

Adjusted inflation is the annualised growth rate of total coins in the network with respect to the total coins in circulation – or the adjusted coin supply.

### # Inventory

Inventory is the total value of coins that were generated but never distributed. Coins that move from inventory into circulation are observed through first spend.

### # Network value

This is often called the market capitalisation or market cap; a term borrowed from equities. It is the number of coins multiplied by the price. Also see adjusted Network value.

### # Network Value to Transaction Ratio (NVT-BT)

Network Value to Transaction Ratio is a measure of valuation similar to the price to sales ratio (PSR) in equity analysis. The NVT-BT is simply the network value divided by the Transaction Value over a given period. A low reading is “cheap”, and a high reading is “dear”. Historically, for bitcoin, it has been most profitable to buy when the 5-week NVT-BT has been below 5.

Longer term measures (12 or 52 week) of Transaction Value improve the stability of the results, whereas shorter term measures (1 week) are more responsive. We would recommend twelve weeks as the sweet spot between stability and responsiveness.

### # Network Transaction Ratio

Network Transaction Ratio (NTR) is a measure of valuation. It shows the amount of network value attributable to each transaction and is measured in US dollars. If a network is worth $1bn and there are 50,000 transactions per week, the NTR would be $1 bn divided by 50,000 = $20,000.

This measure is useful for the smaller networks. For the larger networks, we recommend the NVT-BT.

### # Relative high/low

Relative high/low shows the price of X making a new high/low relative to another asset Y; or simply the price time series of X divided by the price time series of Y. In crypto, Y would normally be the price of bitcoin or a diversified index of coins. For example, if Bitcoin rises to a new high, yet Litecoin rises by more, then Litecoin is making a new relative high.

### # Supply (Adjusted)

Adjusted Supply is the total number of coins mined less those that haven't been distributed. These coins are either lost or held in miner inventories.

### # Supply (Inventory)

Inventory is the number of coins that have been generated (mined) but have not moved from their generation wallet. Coins moving from their generated wallet are tracked periodically as 1st spend.

### # Supply (Total)

Supply is the total number of coins that have been mined since the coin was launched (genesis). Also see adjusted supply. Total inventory is the number of coins held by miners over a specified time period.

### # Transaction Count

Transaction count is the number of transactions over a given period.

### # Transaction Value

Transaction value is the on-chain transaction value measured in the native currency, adjusted for change outputs. This is a complex calculation because each transaction involves a transaction amount and a change output. In order to identify the economic value of the transaction we identify and remove the change from the transaction value.

Transaction Value is to a crypto analyst what sales/revenue/turnover is to an equity analyst, and it is measured in weeks. Average Transaction Value is the transaction value over the past week divided by the number of transactions over the period. Also see weekday bias.

### # Tx

Abbreviation for transaction.

### # Velocity

Velocity is a non-price indicator, which means it is calculated from on-chain metrics alone. To calculate velocity, you take the Transaction Value (measured in coins), divide it by the Total Coin Supply, and then annualise it.

### # Volatility

Volatility is a measure of how much the price has moved over the given period, on an annualised basis. For a crypto-asset, a reading below 50% is low, and an average of 100% is to be expected. This is broadly equivalent to a speculative equity. A fiat currency pair typically experiences below 10% annualized volatility.

### # Weekday bias

Weekday bias is the basis for the default timeframe used by ByteTree. That is because a week is the minimum economic cycle in crypto networks and adjusts the data for less active weekends. Mondays to Fridays are routinely the busiest days, and the weekends see a significant drop in traffic. By measuring our statistics across the rolling week, you get the most up to date week on week comparisons. This is not dissimilar to measuring a retailer like for like over a year and not being disappointed that January’s sales are weak following a busy Christmas period.