Deaaaar Uptrenndians, in this first paper I’d like to focus on a recurrent “Crypto Loch Ness Monster” – i.e. an intuition or a knowledge that many of us share, without being able to materialize it in our daily behavior. That intuition is the following one: “Is Coinmarketcap a reliable mirror of a cryptoproject’s worth, or is it a platform that made institutional the cryptoranking parameters that best suit its business model, and that discards others sources of data, like the use cases for each existing blockchain?”
Trying not to tire you with a 10 pages article, I decided to process this topic under a 3 steps approach, of which I’m going to deliver today the first one:
a) Coinmarketcap… or Coinmarketkidnapped?
The next two ones will be:
b) Existing alternatives to determine a blockchain worth
c) Building an Uptrennd-based CoinmarketUSE platform
a) Coinmarketcap… or Coinmarketkidnapped?
Most of us already know the main function of www.coinmarketcap.com (and of its many equivalent websites): to be an aggregator of cryptocurrencies market data, primarily provided by crypto exchanges.
This means that that website should behave exactly like a data mirror, among other 20 similar sites that we, the users, also consult to verify the information congruency. It should be a strict equivalent of the Bitcoin or the Ethereum decentralized nodes network: any transaction being processed through the validation activity of thousands of interdependent but equally effective and autonomous computer links. In short, both for tampering-proof reasons and for avoiding such a website to convert into a new kind of market intermediary, it seems obvious that CMC should be blockchain-based.
Is it? Not quite.
We can even measure the almost incongruity of this thought, by Duckduckgoing: “Is CoinMarketCap built on a blockchain?”, or by Googling it (for the ones of us ready to deliver all their private info). How many results do we get?
CMC also likes to handle a touch of irony: they offer their users a “Blockchain Explorer” page, adding: “Get our free block explorer guide! Learn how cryptocurrency works with blockchain technology. Our guide helps you to understand data, so you can confidently browse the blockchain and read transaction instantly“ (3). Read transaction instantly, yes. But not CMC’s transactions.
The “Wikipedia effect”: an almost monopolistic minds position
Quite surprisingly, while the cryptosphere is a highly diverse ecosystem – with more than 4.7k cryptocurrencies being alive and traded on a daily basis (2) – and one of the blockchain-oriented culture core principles is the decentralization (or, much better, the distribution) not only for central banks but for any human activity where shifting to an atomicity of actors is a relevant and efficient move, CMC is the perfect example of an anti-blockchain platform.
In spite of this hostile nature to decentralization and diversity, CMC has acquired in our space an almost inescapable status. No groundbreaking revelation has been able to debunk CMC’s practices, or to lower its influence on the market behavior: nor a recent “Coindesk” article about how easy it is to fake an exchange volume and hence list a coin or token on CMC (4), nor the concordant analysis of different cryptoactors around an actual BTC dominance ranging from 80% to 90% (instead of the average 60% that CMC constantly asserts on its front page) (5), neither CMC’s early 2018 move to delist South Korea exchanges from the prices calculations (6) As the coinsutra.com author Harsh Agrawal underlines: “(…) almost all currencies on Korean exchanges were trading at a premium and removing it from calculation sent a false impression that coins were crashing, leading to huge buy/sell chaos in the market. (This was especially true in case of XRP).” (7)
I’ve personally seen at least one very strong blockchain project being expelled from CMC after two of the exchanges where their coin was traded delisted it for unpredictable motives (one of those exchanges was victim of an internal fight and sank, the other stopped quoting the coin for no explainable reason). That blockchain project goes on flourishing, developing new dApps, and its coin is one with the most use cases I can think of in the cryptospace. But because of the “CoinMarketCop” decision, it has now lost a big part of its visibility, and many potential investors could be discouraged to trust it, for not finding its ticker on the website “to be listed in”.
I tend to call this quasi-monopoly the “Wikipedia effect”. As a teacher, and because I know that 95% of nowadays’ students and citizens´ scientific Internet searches will make them fall like stones under the Wikipedia dominion, I explicitely forbid them to use information met through a Wikipedia page, and I expect them to gather data coming from at least 3 different origins (better if minimum one of them is printed material, without any online version, and if a part of those documents is written in another idiom than the student’s mother tongue). Otherwise, I know I’d harvest, in a 25 students group, a ridiculously narrow and shallow interpretations diversity.
Reflecting to some extent my classroom’s practices, I’d like to ask you all two questions, as a temporary conclusion:
- do you sometimes consult other sources than CMC to assess the value of your favorite blockchain-based projects?;
- if so, which alternative platforms do you use?
Thaaanks in advance for sharing some electronic footprints in this article comments!!!
1. a) https://duckduckgo.com/?q=Is CoinMarketCap built on a blockchain%3F&atb=v95-1&ia=web // b) https://www.google.com/search?ei=QX7JXd_AFuOb5wLjgYfoDQ&q=Is CoinMarketCap built on a blockchain%3F&oq=Is CoinMarketCap built on a blockchain%3F&gs_l=psy-ab.12..0i71l8.0.0..1218382...0.2..0.0.0.......0......gws-wiz.2jlKzw_Oz4k&ved=0ahUKEwif5YPWvOLlAhXjzVkKHePAAd0Q4dUDCAs
5. “Bitcoin Dominance Exposed! Coinmarketcap Lies? 80% or 50%?” - https://www.youtube.com/watch?v=2_pVhHGnURk
7. “5 Best Alternatives To CoinMarketCap [CoinSutra’s Picks]” - https://coinsutra.com/coinmarketcap-alternatives/
Cryptocurrency & Blockchain
A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.