Three reasons why you should not evaluate the cryptocurrency market by market capitalization

The value of bitcoin and other cryptocurrencies, is experiencing a rapid collapse of the courses over the past few days, displayed by various factors, most popular of which is the market capitalization. Some analysts believe that it is wrong to assess the crypto asset at its cost, which is based on the current stock price. Why the market capitalization of digital assets is not a reliable metric?

Manipulation of the market capitalization of the whales

Researchers cryptocurrencies noted that poor liquidity combined with less restrictive rules on many cryptomeria allow the founders and major asset holders are easy to manipulate quotes in market capitalization on sites such as CoinMarketCap. This was during the boom, the ICO last year, when whales to achieve the necessary quotes Pamphili course of certain coins.

In addition, the above example CoinMarketCap, as told at the conference Crypto Event RIW co-founder of United Traders Anatoly Radchenko, the publication of price data of assets not used figures from Asian markets, particularly South Korea, where the bitcoin’s price is usually higher than on European or U.S. exchanges. Although, in theory, the market capitalization should consider quotes from all crypto trading sites. Due to the fact that not all of the data, the value of the coins is not quite true.

Evaluation of crypto-currencies in dollars

The most popular currencies that assesses crypto-asset and its market capitalization, is the U.S. dollar. In this lies a deep philosophical problem: the market capitalization, which is essentially the product of the price of the token and their total number, implicitly evaluates the success of each crypto-draft terms of expected future monetary output. For the industry based on trying to invent a new, completely identical money, or rather, their non-financial form, contradictory to be based and rely on Fiat currency.

Prioritization return on investment on the basis of the dollar helps to create communities of passionate crypto-enthusiasts who plan to make a profit due to the high exchange rate. When the major indicators of crypto-asset real Fiat currencies are very rarely professionals, e.g., software developers or entrepreneurs with their business, which at his desire may promote the development of the industry to make the blockchain and cryptocurrency to the usual, required for all the items of daily issues.

Day traders and imaginary cryptocurrency experts from Twitter, Telegram or YouTube, which gather the audience and to use its gullibility, earn a lot of money. Even in the case that the opinion of the Internet users coincided with the upcoming market news, universal Analytics will not affect crypto-culture in the desired way, not develop it. Another category of current users refers to the pioneers in ICO when each project began to collect Fiat money and create useless tokens.

It is important influence the community to attract investment

Digital coins and their development directly depend on the team that develops technologies and tokens. Professionals work in teams, exploring new area and create your product. All members of the community are not only driven by the desire to obtain his fee, but the idea of cryptocurrency. Of course, not every project and digital asset pursue high goals in the industry a lot of fraud, but popular coins offer new ideas for the decentralization of the economic ecosystem.

The crypto-community, as noted by many market researchers, become more thoughtful and calm. Learned to some extent to distinguish the Scam from the really promising project. So if you want to evaluate a token of any project, it is important to assess the quality of work and team. However, in this case, the price depends on the dollar.

Tools to measure crypto-asset

DeCenter already wrote about how to calculate the value of crypto-asset. Often Takenaka is based on the basic concepts of classical Economics and uses variables of the formulas to obtain the Fiat of value. Therefore, the data obtained is not quite true, because classical Economics does not take into account the unique ecosystem of digital assets.

Analysts famous publication Coindesk propose to measure the cryptocurrency to use a more relevant indicator — bitcoin, which reduces the value of price as measure of value.

After all, a balanced multidimensional representation of the value of the asset includes many objective measures of engagement and interest to each and every crypto project with its own unique coin. Price or market capitalization must be only one of the five selected indicators. Do not forget about the activity of developers, the volume of trading on the exchange, transactions on the blockchain and activities of the community in social networks.

Grid evaluation of crypto-assets from Coindesk. Instead of the usual for many exchanges the us dollar experts advise to use bitcoin, which is indicated by the yellow line. And Ethereum, for example, the blue closed curve. Because of this, you can see how ETH less BTC. Source.

After evaluating all factors, you receive a General image of the coins forms an idea about its nature and what surrounds it. For example, if you look, the perception of zcash for highly distorted in relation to the involvement of developers, which appears to reflect the passion felt by many cryptographers for protection of sensitive data, which is the basis of coins. But the project has very few transactions and very little participation in social networks.

In contrast, the profile for XRP dominates at the expense of participation in social networks reflects the existence of «XRP-army» on Twitter and other media sites. In addition, Ripple develops on their own experience, therefore, recently started to communicate with the community. Because maintaining direct communication with investors and users of the project is one of the main points quality of the project.

Bitcoin based instead of dollar

To measure the value of altcoins, analysts say Coindesk, it is better not in American dollars but in bitcoin. However, some researchers have criticized the selection of the first ever digital asset as a reference for other coins because in this case the status will be regarded as supporting the prejudices of the so-called bitcoin maximalists who believe only in the first digital asset.

In principle, the balance or the average rate of some coins and their weighted average, could reverse the problems with the criticism of the community. But these calculations would be difficult. Furthermore, the absolute evaluation of bitcoin for all five measurements does not reflect the absolute data analysts presented their vision for comparison. Likely that any altcon can surpass bitcoin on any of the five indicators, and then have to assess the parent currency at a lower.

Model where will bitcoin be used as a starting coins to estimate other costs, will be similar to world markets, where there is a lot of currencies of different countries, and to measure the receive data in the same indices, we use the U.S. dollar. It often happens that coins of the strongest economies in the world such as UK pound, or Switzerland is the Euro worth more than the dollar.

For the selected measures at the moment, bitcoin, in spite of his poor performance, is the most popular on the market and currency is the confidence of the community. Probably, in the future, if the dominance of digital gold will change, it will be possible to use a different cryptomonad to assess all other projects.

Of course, this method of building understanding of the cryptocurrency is experimental and carries recommendatory, rather, an alternative initiative for a more comprehensive evaluation of crypto-asset in it is different from the classical Economics of the environment.

At the moment, large institutional investors, as has been said many projects are on the verge of entering the market, it is very important that they postponed its dollar valuation model and recognized that the value of digital assets is not only the market capitalization of the coin. After all, the cryptocurrency market is distinct from the world of classic stocks and bonds and this attractive.


US congressmen have proposed to develop a road map for the regulation of cryptocurrencies

The representative of the Democratic party of Florida Darren Soto and Republican Ted Budd from North Carolina has prepared two draft laws regulating the industry of cryptocurrency. The document is published on the official website of the U.S. Congress.

Turning to the financial regulators of the United States, the congressmen stressed the importance of control of the stock market and protect investors, which proposed to create the appropriate road map.

Thus, the bill «On protection of consumers in the field of virtual currencies» to investigate manipulation in the market of cryptocurrencies and how to prevent them with making appropriate regulatory changes.

The draft law «On the markets of virtual currencies and regulatory competition» we are talking about the study of world experience of cryptocurrency regulation. In particular, it spelled out how Congress can avoid risks and contribute to the development, for the development of blockchain technology in the United States and a positive impact on the economy of the country.

«We need to ensure that the United States is taking advanced measures to protect consumers and the financial welfare of investors and cryptocurrencies bloccano, at the same time promoting the conditions for maximizing the relative technological advantages», — said Soto and Budd.

In General, congressmen are confident that the implementation of their laws will help US to take a leading position in a promising cryptocurrency market.

Earlier in December, the Ministry of national security of the United States announced its intention to examine methods of analysis of transactions using anonymous cryptocurrency for criminal purposes.

In September, the General Prosecutor’s office in new York said about the vulnerability of bitcoin exchanges to market manipulation.

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Huobi will launch a regulated crypto currency exchange for institutional investors

After receiving DLT-licensed in Gibraltar cryptocurrency exchange Huobi has revealed plans to launch a global infrastructure for customers.

As representatives of Huobi, the Gibraltar license authorizing the storage and transfer of cryptocurrency assets on behalf of clients around the world. It will also facilitate the exchange of Fiat money for scriptactive, said in a press release.

«DLT-license will allow us to open a fully regulated stock exchange for global institutional and retail clients, so this is a big win for Huobi and very positive step forward for the implementation of our global strategy,» – said the head of institutional business Huobi Lester of Hoda Lee.

Huobi has also plans to launch services for the OTC market.

«We plan to give its customers the benefits of integrated solutions, the implementation of which would have been impossible in the old paradigm», — said Lester Hoda Lee.

He added that the future of cryptocurrency depends on the regulation of the industry. According to Lester Hoda Lee, DLT-license will attract into the industry from institutional investors, who want to work in a regulated field.

In a press release from Huobi also noted that Gibraltar was the first jurisdiction that implemented the regulatory framework for the provision of services in the field of technology of the distributed registry.

We will remind, in November Huobi Global announced the launch of the beta platform for trading cryptocurrency derivatives.


In the second quarter of Wirex will launch a cryptocurrency debit cards in Asia

British operator bitcoin wallet and debit card Wirex will introduce contactless debit crypto card for residents of Asian countries in the second quarter of 2018. Cardholders will be able to use multi-currency accounts for quick transfer of Fiat funds (Singapore dollars, British pounds, euros and American dollars) to cryptocurrency, and also to pay for their goods and services.

In addition, payment card Wirex will support the 3D Secure technology to ensure payment security on the Internet. It is expected to issue two types of cards: plastic and virtual.

We will remind that in October of 2017 FINTECH Japanese company SBI Holdings and Wirex signed the agreement on creation of joint venture, SBI Asia Wirex. In Wirex has committed itself to provide the endeavor, expertise in blockchain technology, while SBI Holdings will focus on ensuring support and scaling in the Asian market.

A week ago, the British company began to offer the cryptocurrency debit cards in Europe. Access to the virtual cards, according to representatives of Wirex, already got everyone from the UK. Next in line are residents of France, Italy and Germany.


Vietnam begins work on the legitimization of cryptocurrency

The Prime Minister of Vietnam Nguyen Xuan Phuc (Nguyen Xuan Phuc) supported a plan under which bitcoin will become the official currency for payments in the country. According to the news Agency of Vietnam, the Prime Minister instructed the Ministry of justice to take the lead in coordinating the work on elaboration of legislative base for implementation of cryptocurrency.

The project will included the Central Bank of Vietnam, the Ministry of information and communications, the Ministry of public security, the Ministry of industry and trade and the Ministry of Finance. Their mission is to study the legislation, to conduct a comprehensive evaluation and offer the government the best solution and the necessary changes in the normative documents.

A comprehensive assessment should be completed by August 2018. And by the end of the year must be prepared and regulations relating to transactions with cryptocurrencies. From this moment, the digital currency can be considered officially existing in the legal field in Vietnam.

Then by June 2019 expected completion of the preparation of the legislative base on taxation, taking account of the cryptocurrency. By September 2019 it is planned to prepare a proposal to prevent violations in the sphere of operations with cryptocurrencies and response. Separately, we will study the question of the protection of property rights of foreign and national investors.

After creating all the necessary documents and procedures bitcoin and other cryptocurrencies can be used for the development of the financial sector and for online payments.

Recall that to make bitcoin the official currency also plan Australia.


Advertising platform myTarget beginning to accept payment in cryptocurrency

Today in the advertising platform myTarget for advertising on all projects Mail.Ru Group and the affiliate network can be paid in Bitcoin (BTC) or Bitcash (BCC), and the owners participating in the network platforms and applications in the near future will be able to receive income in bitcoin.

Thus Mail.Ru Group provides a convenient way to pay for those who are already doing business in bitcoin for advertisements on all company projects, including Vkontakte, Odnoklassniki and Mail.Ru you can pay in bitcoins and bitcache.

Dmitry Sergeev, first Deputy General Director Mail.Ru Group:

«We strive to give our customers the maximum opportunities for business development. Platform myTarget will be a launching ground for an ecosystem that will continue to evolve, including other products Mail.Ru Group, including the draft game».

For payments in bitcoin via its international brand Mail.Ru Group uses BitPay – the world-leading payments processing system in bitcoin: it has more than 50 thousand companies, including Microsoft, Virgin Galactic, PayPal, Zynga.

myTarget advertising platform Mail.Ru Group, which unites the largest Russian and CIS social network and services with a total coverage of more than 150 million people – Vkontakte, Odnoklassniki, My World.


Buterin confirmed the end of the first part of the initial phase scaling Ethereum

Ethereum co-founder Vitalik Buterin told the meeting of developers that the first part of the initial implementation phase, the scaling of the network through sortirovanie came to an end.

In his opinion, the next of the four phases will be completed “within a month or so” and checked in test network.

However Buterin considers it a good testing Protocol Casper, who now paid much less attention.

Recall that in September, the Creator of Ethereum has published a whitepaper three, in which he explained his vision of how to work with Casper (1, 2, 3), designed to reduce the overall complexity of the blockchain. And in the center was made in November of the roadmap for future development of the network Buterin put data fragmentation. Ethereum nodes store information about everything that happened in the network in recent years, the number of daily transactions increased to 20 thousand a nod, and the idea of fragmentation implies that the nodes will contain only a small part of the data network and, if necessary, to share information.


Coinbase revealed the list of cryptocurrencies that can get on the platform

The American crypto-exchange Coinbase this Friday revealed information about what the cryptocurrency she is currently listing on its platform.

«As we announced in September, the aim of Coinbase is to support all assets that meet our criteria and are fully compliant with local laws. Over time, we intend to provide its customers with access to more than 90% of all conditions corresponding to these digital assets, – she writes. – To implement their own idea into reality, we evaluate promising assets in accordance with its own format, which includes such factors as safety, compliance with legal requirements and commitment to project the idea of creating an open financial system for the world.»

Currently, Coinbase considers the following assets to the listing: Cardano (ADA), Aeternity (AE), Aragon (ANT), Bread Wallet (BRD), Civic (CVC), you Dai (DAI), district0x (DNT), EnjinCoin (ENJ), EOS (EOS), Golem Network (GNT), IOST (IOST), Kin (KIN), Kyber Network (KNC), ChainLink (LINK) Network Loom (LOOM), Loopring (LRC), Decentraland (MANA), Mainframe (MFT), Maker (MKR), NEO (NEO), OmiseGo (OMG), (POE), QuarkChain (QKC), Augur (REP) Network Request (REQ), Status (SNT), Storj (STORJ), Stellar (XLM), XRP (XRP), Tezos (XTZ) and Zilliqa (ZIL).

The exchange notes that the decision in each case requires consideration of a number of factors, so it can not guarantee anything. Also remains the likelihood that some assets will only be available for the purchase and sale, but not displayed on the wallets of users.

Previously, Coinbase CEO Brian Armstrong said that in the future the platform can be represented by hundreds, and potentially millions of tokens.

Coinbase recently held a listing zcash for.


Justin San is ready to «save» the developers of Ethereum and EOS

CEO of the decentralized Internet Protocol TRON Justin San said that his team is organizing a Fund to «save» the developers of Ethereum and EOS from the «collapse» of their platforms.

To support developers San ready on one condition – they must move their decentralized apps in its ecosystem. One of those interested in the proposal of the commentators wrote:

«So we jump from one sinking ship to another? Whatever, I’m ready. When the transfer, sir?»

Twitter account EOS New York, presumably belonging to one of the producers of the units in your network EOS, said:

«I think we can handle it, given a billion dollars of venture financing of projects #EOS #EOSIO, which has been prepared by Galaxy, SVK Crypto, Tomorrow, etc. anyway, thanks for the offer. Good Luck, Justin.»

Other commentators welcomed, ridiculed the proposal CEO TRON and even urged the participants of the cryptocurrency industry to cohesion.

«It seems that to replace the war hash capacity came the war of decentralized applications,» wrote one of them, referring to recent events in the Bitcoin network Cash.

San is not the first time mentions in their reports competing projects. In October he wrote that the new version of its Odyssey 3.1 Ethereum will pass for speed, and EOS – efficiency.

Course TRX for the last day fell by 4% — one of the least dramatic movements among the major cryptocurrencies.


DigRate believes that the draft INS Ecosystem can bring losses to investors

Rating Agency assessment of digital assets DigRate appropriated ICO project INS Ecosystem a rating of B1. Experts believe that the project contains significant risks for investors and has high sensitivity to market conditions.

The creators of Ecosystem INS are going to build a new form of mutually beneficial cooperation between producer and consumer, bypassing the retailers who have too much influence on the modern market of products and goods.

In INS Ecosystem producers will be able to use flexible setting options in a smart contract to create an individual reward programs buyers. The only means of calculations in the processing of all types of compensation will be the token native platforms – INS. It will also be one of the payment methods in ecosystem INS. In addition, the team plans to use tokens to pay for services, but a detailed plan at the moment.

DigRate notes that theoretically, this system may establish itself as a very promising, but also has significant risks.

So, when a serious applications for a large volume of trade and payments within the system there is no mention of actually existing base of assets, which would have served as a «safety cushion» for investors. The motivation of the ownership of tokens of users is also unclear.

Another unresolved issue is the lack of information on building a logistics infrastructure that is critical for such a serious trading platform.

The project team consists of professionals in sales, PR and marketing, but specialists at blockchain technology is clearly insufficient.

With all these pros serious doubts among experts is the lack of a detailed financial plan of the project and lack of transparency in the legal structure. The authors of the project outlined a preliminary timetable and stages of development, but the White Paper indicated that the timing can change.

ICO project starts on 4 December, but the team still does not have a working prototype of the product, although in the blog Ecosystem INS announced its release in early December of 2017.

Thus, investors are advised to exercise caution with respect to investments in the project.