Not all Cryptos are Created Equal - A Classification Taxonomy for the Largest Cryptos and Various Networks

Not all cryptos are created equal.

These taxonomies, evaluations, and charts are based on working products, not promises.
I have not had time to sufficiently evaluate every crypto, this is an alpha, there are likely mistakes.

Unsinkable.io Taxonomic Classification of Top Cryptoassets by Market Capitalization

Unsinkable Asset Taxonomy Venn Diagram v0.2.jpg

This diagram is intended to help classify the capabilities of various networks (and assets created on them).

Unsinkable.io Analysis of Transactional Capabilities and Store of Value Potential for Top Cryptoassets by Market Capitalization

Unsinkable Asset Analysis v0.2.jpg

“Transactional” cryptos and “coins” are cryptoassets that either have no intended purpose other than transaction (no utility), and/or have properties conducive to usable currencies.

One of the reasons BTC is commonly referred to as “digital gold” is that, like gold, it is not useful as a transactional currency. Transactions take an hour to confirm and can cost over $10.

Some cryptos are meant as speculative investments, others tokenized ownership. There are infinite uses for tokenization. ICO Platforms that allow tokenization are valuable. Their native coin may or may not be intended as a store of value or as a transactional currency.

“Network bridges” help traders and crypto users convert between different networks/blockchains/DLTs.

Tokens issued on some networks are useful as currency. Others aren't.

The Ethereum network requires 6 minute confirmation times, $0.20-$1.00 transaction fees, and is limited to 25 Tx/s.

Stellar and Steem confirmations occur in a few seconds and cost negligible transactions fees.

As a newcomer, I found it hard to figure out the difference between networks and coins/tokens. It is difficult to learn what network assets are on and if they are transactional, potential stores of value.

In my opinion, in order to create cryptoassets useful as currency, a network must provide
scalability – capable of over 1,000 Tx/s
< 5s confirmation time
< $0.01 transaction fee
a native DEx
stablecoin integration
a distributed, immutable, trustless, P2P network
decentralized consensus

In order to be a feasible store of value, in my opinion, a cryptocurrency must:
have an immutably fixed max supply
be asset-backed and redeemable for a minimum value
have distributed and decentralized ownership
-less than 50% owned by top 100 wallets (excluding non-profit ownership) and
-allow a central party (private entities) no more than 10% circulating supply control within a 3 month time period

Privacy is another common and important aspect of cryptocurrencies. “True” cryptocurrencies require at least the capability for pseudonymous usage.

Smart contract capabilities are another common feature of networks. If network control and consensus are not distributed and decentralized, smart contracts are not truly immutable or trustless.

Categories I would like to add to the taxonomy:
Equity/Security Tokens
Bitcoin Layer 2 Solutions (Lightning)
Ethereum Layer 2 Solutions (Side-chains, protocols, scaling)
Gambling

The charts currently vertically prioritize market cap as a stand in for “adoption.”

I would love to see an app version of this that can maintain the necessary venn relationships while simultaneously adjusting the circle size to represent category market cap, like coin360. It would also be super cool if you could click categories and get pie charts showing the relative market cap of the encompassing coins/tokens.

A nascent industry
I see crypto networks like search engines. There will be a “Google” that makes all others obsolete. My bet is on Stellar, due to the characteristics I have discussed, and more. PoW and blockchain were great proof-of-concepts for decentralized networks but newer networks make them completely irrelevant as transactional currencies.

In the continuing early crypto adoption stages, presumably 5-10 years, network bridges like BTC will be extremely valuable, but may die off once a clear network winner emerges.

Assets are only useful as currencies if everyone will trade for them – adoption. Market cap is a decent estimate of “adoption.” I think a more accurate metric would be a combined score including market cap, trade volume, liquid pairs, wallet quantity, active wallets, available merchants & exchanges, and sentiment/social media metrics/real world brand awareness.

For more educational content, please check out

https://www.unsinkable.io/

If you would like to contribute time and knowledge, please help fill out the analysis spreadsheet
https://docs.google.com/spreadsheets/d/1_6cknGOxBlxewxoWiWdzjUCngWMM2vgSCAdjWYfPnS8/edit?usp=sharing

Sources and Inspiration:
coinmarketcap
coin360
info.binance
crypto51app
arewedecentralizedyet

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