Famous Analyst Unveils Idea for New Cryptocurrency Ranking System
02 December 2019 14:13, UTC
Well-known crypto analyst Aat de KWAASTENIET presented the new cryptocurrency ranking system in his Medium blog post. Instead of taking into account their market capitalization, he focuses on the number of nodes.
He clarified that the price of a given cryptocurrency is not be the only factor that should be taken into account when evaluating these assets. De Kwaasteniet argues that the industry attaches great importance to "high market capitalization", which is not entirely true:
“Let’s say, John launches and cryptocurrency and calls it JohnDoeCoin. He sets up the blockchain in such a way that at the beginning there are 100 million JohnDoe’s (the so-called pre-mined tokens). Then, he goes to his friend William and asks if he wants to buy one JohnDoe from him for €10. According to the market cap definition, JohnDoeCoin now has a market cap of €1 billion and CoinMarketCap ranks it around the 10th place.”
The analyst believes that this method of assessment is "nonsense." Instead, he suggests crypto ranking based on nodes that are active on the network and participate in transaction verification. For example, on November 24, the top 10 cryptocurrencies by the number of nodes/peers were Horizen (ZEN), Bitcoin (BTC), Ethereum (ETH), Zcoin (XZC), PAC Global (PAC), Polis (POLIS), Dash (DASH) , Zilliqa (ZIL), DigitalNote (XDN) and Gulden (NLG). Nevertheless, these values are subject to change at any time. The analyst believes that this method of ranking cryptocurrencies is more relevant:
“It is fairer to make a comparison between [cryptocurrencies] that have made more or less the same start and that have obtained and enlarged their circulation supplement through mining as Satoshi Nakamoto intended.”
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