How Important is Coin Ranking on "Coinmarketcap"?
So I was asked yesterday by a mate how important a digital asset's positioning is on the "Coinmarketcap" website. He himself is quite heavily invested in Bitcoin and EOS and I could tell that maybe this was also a little dig at me as my largest stake is currently sitting at spot #44 and starts the letter "S". Well, the conversation went quite deep but I thought it would also be cool to highlight a few of my own thoughts about this arguably divisive subject.
Well, I reckon the most important thing to look at is the total marketcap of the entire crypto space, currently standing at around $140 billion dollars. Now look at the market capitalization of, let's say, Amazon. That sits at around $900 billion. More than six times the "whole" crypto market combined. I mean, as far as I'm concern, there's your answer right there. Crypto currency is a potentially revolutionary form of transacting and fast-payments finance spanning the whole world and yet we can only encompass a fraction of some of the biggest companies out there. Hell, even Microsoft and Google are over $800 billion each.
The point is, I feel we are too way early in the game to give any credence to the position of any digital asset and therefore how much better it is than it's various counterparts. Take STEEM, for example, that not too long ago was ranked #53 in the charts, only to have a pump in price and get pushed up into the #34 spot, then ultimately come back down to #44. It's akin to a roller coaster ride and hence can in no way invalidate the importance of another coin over or below it. And the same goes for many other coins out there with similar stories to tell. Some have even gone as far as to say we are at the "sludge at the bottom of a swamp" stage, biding our time until we evolve into something far, far greater than what crypto is now. Everything is very experimental and I think that sums up my feelings for crypto as a whole. Although that's not to say I don't hold it in high regard or think we are on to something world-changing. All I am trying to say is that things take time to mature and crypto is still at the very start of it's "decades-long" journey to mass global acceptance.
But this doesn't stop the competition being as fierce as it is. After the apocalyptic run BTC had from a few cents all the way to where it is now, everybody wants to create the "next big token" and prove their unique use-case sellng point for crypto currencies. This is a great thing for us as it is producing a surge of interest and innovation via a myriad of talented individuals, albeit from a purely developmental standpoint. All this activity taking place whilst the rest of the world sleeps on it. And this is where "Coinmarketcap" is relevant, to some degree. It paints a nice pictorial view of where each coin lies in relation to the other. An at-a-glance comparison to see where your direct competition lies, within a narrow context of things. But to make these bold statements that a coin you own is better than any of the rest, knowing the interchangeable nature of the charts, is a little conceited.
Let's come back to this topic in about ten years time and see what's what. I'm sure many of us will be very surprised at the results we find.