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JetBlue has confirmed that a “global” computer system outage is to blame for delayed check-in and frustratingly long lines at airports where the carrier flies.
Jordan Felo had just finished hiking in the local mountains outside Portland, Ore., several weeks ago and was headed home in his 2010 Toyota Prius when it suddenly lost power and slowed to a crawl.
Felo had taken the Prius to a Toyota dealer a few weeks earlier for a 2018 safety recall. New software…
Insanity, they say, is doing the same thing over and over and expecting a different result.
Ladies and gentlemen, I give you the president of the United States.
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Boeing plans an update to the flight control software system for its troubled 737 Max planes that will prevent it from activating if there is too large a disparity of data coming from aircraft sensors, the company said Wednesday.
The company also plans changes in pilot training. The pilots flying…
Facebook agrees to dismantle targeted system for job and housing ads after discrimination complaintsMarch 19, 2019 | dailybusinessnews
Facebook on Tuesday agreed to overhaul its lucrative targeted advertising system to settle accusations that landlords, lenders and employers use the platform to discriminate against African Americans, women, seniors, people with disabilities and others.
The far-reaching settlement compels Facebook…
Drugmaker Eli Lilly patted itself on the back this week for offering an “authorized generic” version of its Humalog insulin for about half the current list price.
“Solutions that lower the cost of insulin at the pharmacy have been introduced in recent months, but more people need help,” said David…
Market cap is often used as a metric of importance in the crypto industry. Communities will react jubilantly as their preferred coin moves up the rankings. People will often invest in the top X coins based solely on their market cap as they think it is representative of a diversified portfolio. However, is market cap the right metric to focus on?
In this post I will explore the fallacy of market capitalization. I will look at the methods with which market cap is often determined and why it could be considered flawed for a number of reasons. I will also touch on other potential metrics which could be more representative of “value.”
But first, let’s start with some basics…
Recap on Market Cap
Market capitalization is a concept that has been borrowed from the traditional equity markets. In the context of a publicly traded company, it is supposed to give a measure of how much the outstanding free float of shares are worth on the market. It is merely calculated by taking the price of the shares and multiplying it by the outstanding free float of shares.
Capitalization is often used as a metric of size, value and importance in the equity markets because all the shareholder information can be publicly verified and the shares are often traded on one exchange.
There is no disagreement as to the market cap of Coca Cola because analysts can easily replicate it themselves. They can pull the shareholder records from their databases and grab the latest price from the NYSE ticker information. However, the same cannot really be said for the cryptocurrency markets.
Market Cap in Crypto
When cryptocurrencies first started gaining the public’s attention a few years ago, numerous websites wanted to find a quick and easy way to compare all of the different coins on the market. They needed a simple ranking number that people could use as a rough benchmark.
Market cap was one of the most applicable metrics that they could use. It was also relatively easy to understand for those who were new to the cryptocurrency markets. It was understood to imply the total value of all coins in circulation.
A problem that is unique to cryptocurrencies though is the fact that this “circulating supply” is often defined subjectively by the coin ranking websites. For example, if we were to take a look at the definition of “circulating supply” on Coinmarketcap (CMC) it states the following.
While this seems like a pretty thorough examination of the circulating supply of a project, a great deal of it will come down to the judgement of the folks at CMC. You will have to trust their assessment of what is freely circulating based on information that is provided to them by project teams.
As many Bitcoin proponents know, “Don’t trust, verify.”
Potential Manipulation of Numbers
Something specific that CMC does is exclude the pre-mined coins from the circulating supply of a particular project. While the intentions behind this may be right, there are some negative externalities that come with this.
For example, when a project has pre-mined a large proportion of their coins, every time they release these funds, their circulating supply will go up. If these coins are not sold immediately (which impacts price) then the market cap of the coins is also likely to increase.
There have been many projects that have been accused of this tactic. While some of them may not have been intentionally seeking to impact price, it is disconcerting that such an important metric can move at the whim of the developers.
This is of course only the circulating supply number that we are talking about. We are well aware of how crypto whales are able to impact price in relatively illiquid markets. Through wash trading and limited external demand, nefarious actors can pump the price and hence impact market cap.
What Can Be Done?
In a sense, the coin ranking websites are in a bind when it comes to market capitalization. They are using it precisely because it is well known, easy to understand, comparable and seemingly applicable. They are trying to provide an objective view of the coin’s total value and the more they try to tweak the formula, the more they can be accused of being subjective.
Another coin ranking site, Coingecko, has taken a slightly more transparent and innovative approach to their rankings. For example, when it comes to listing their circulating supply they do not exclude pre-mined coins. They do this more for consistency because technically tokens issued on smart contract platforms are all pre-mined. Similarly, pre-mined coins could potentially already be traded on exchanges because they are not locked.
They also give the user more information on how circulated supply is calculated for each coin that they have listed. For example, in the below image you can see the supply numbers for the 0x (ZRX) project.
Indeed, determining the “value” of a cryptocurrency project is itself such an involved discipline. If someone really wanted to analyze this then they would need to look at factors such as on-chain metrics, developer activity, community interest and so forth.
In fact, exchanges such as Binance have even started to roll out their “gold standard” metric which awards projects based on their “communication.” Although this is not an endorsement by Binance, projects that regularly communicate with their community could be a valuable metric.
Of course, one can’t really look at these other metrics in isolation and compare them to another coin. They have to be broken down and analyzed piece by piece and adjusted for particular technicalities of the coins in question.
None of these metrics can be viewed as a potential replacement for the quick-and-dirty measure that comes with a coin’s market cap. They can only be used as a complement to it by the analyst should they decide to delve deeper into the relative “value” of a project.
Don’t Get Bitconnect Rekt
Market capitalization is a useful metric. It allows us to get a rough sense of the general market value of particular coins that are on the market. However, that is where its usefulness should stop.
It should not be used as some sort of a metric of importance, value or market support for the project in question. It is a simple metric which, although useful, can and has been manipulated.
While circulating supply numbers can be tweaked to better reflect market dynamics, market cap should be a singular factor in a much more thorough due diligence process. Development, user numbers, scaling and communication should all be thrown into the “DYOR” soup.
Let us not forget that Bitconnect was at one time in the top 10 of CMC. If you had invested solely based on this fact, you would have been utterly Bitconnect rekt.
Do you think crypto market capitalization is inherently flawed? How useful is market capitalization for determining the crypto market’s total valuation?
Images courtesy of Shutterstock, Coinmarketcap, and Coingecko.
OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.
The post Market Cap: A Flawed Ranking System for Valuing Crypto appeared first on Bitcoin News.
A recent report published by the Bank of Spain states that Bitcoin is a solution for the creation of a system without censorship. This is in contrast to public comments made by most central bankers who are prone to attack cryptocurrency with little insight into why it is needed.
Explaining Peer-to-Peer Electronic Cash to Bankers
Banco de España, Spain’s central bank and supervisor of the Spanish banking system, recently published a report aiming to explain how Bitcoin works. The document details the functions of the cryptocurrency, as well as analyzing its strengths and weaknesses from the point of view of the established financial order. It also explains that the best way to understand the aims of the new system is by consulting the original Bitcoin whitepaper written by Satoshi Nakamoto.
The report mentions that according to Nakamoto the world needs “an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” Thus the goal is to create an electronic payment system similar to cash which allows remote payments without the need for the intermediation of institutions such as banks. This is meant to enable truly irreversible payments and reduce intermediation costs.
A System Without Censorship
The report concludes that cryptocurrency was envisioned as a payments system without the possibility of transaction censorship or a central authority with the power to authorize or reject transactions. It states that “bitcoin is an imaginative and elegant solution to this problem” of “the creation of a system without censorship.” However the central bank’s report also determines that traditional payment systems do not seek to resolve this problem and therefore cryptocurrency is not an alternative to them.
In line with the common position usually expressed by central bankers, the report ends by saying: “Taking into account that for most agents the existence of trusted intermediaries is not a problem, along with the costs and inefficiencies generated when an attempt is made to eliminate these intermediaries, it does not seem that bitcoin, as it currently stands, is going to have a significant impact for the financial sector as an alternative payment system to the traditional channels.”
What do you think about the conclusions of this report? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
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The post Bank of Spain Report: Bitcoin Is a Solution for a System Without Censorship appeared first on Bitcoin News.
Last month, on the 10th anniversary of the Bitcoin genesis block, Bitcoin Cash (BCH) developer Jonathan Silverblood launched his Cashaccount.info platform. The Cash Accounts platform allows users to tether human-readable names to BCH addresses in order to make payments easier. Now the Chinese BCH light client Ifwallet has become the first public wallet with Cash Accounts sending support.
Ifwallet and Cash Accounts
Bitcoin addresses are long strings of numbers and letters, a format that to some users can be nerve-racking and cumbersome. Over the last few months, BCH software programmer Jonathan Silverblood has been working on a project that helps bypass some of the friction associated with BCH addresses. He’s created Cashaccount.info, a platform that allows users to register a one-time human-readable name that is tied to a BCH public address. News.Bitcoin.com tested the application on January 2, the day before the official launch on Bitcoin’s 10th birthday. The platform hashes a name into the BCH blockchain by using an OP return transaction and after the transaction is registered into a block the name will be validated.
When Silverblood first launched the project he also mentioned that he had been reaching out to wallet developers so they could possibly support Cash Accounts in the future. The Cashaccount.info website shows that the programmer has discussed the idea with Electron Cash, Edge, BRD, Bitcoin.com, Stash, Ledger Wallet and more. On Feb. 14 the Cash Accounts founder explained that the Chinese cryptocurrency light client Ifwallet has added support for the name address system within the sending interface.
“Congratulations to Ifwallet for releasing the first public wallet with Cash Accounts sending support,” Silverblood stated on Thursday.
The developer continued:
When you go to send you can now type in a Cash Accounts name and if they have compatible payment information in them they will show up in a dropdown list.
Experimenting With Ifwallet and Cash Accounts
Ifwallet is a cryptocurrency wallet with a focus on bitcoin cash and provides users with a secure asset management tool for token support. The mobile wallet is backed by investors such as Coinex and is partnered with projects like Johnwick.io, Viabtc, BCH Club, and Wormhole. Ifwallet also supports the Wormhole project by implementing WHC integration and incorporating the token factory. Recently the Ifwallet project launched the decentralized applications (dapp) store module and deployed a variety of dapps that can be used with the wallet.
On Feb. 15, news.Bitcoin.com tested the Ifwallet application and the client’s speed was similar to using the Japanese Yenom wallet. The wallet makes you create a six-digit PIN to access the interface but biometric settings like Apple’s Face ID/Touch ID can also be set up. The wallet doesn’t compel you to back up the wallet’s mnemonic phrase immediately and there is a warning message displayed until this part of the process is complete. I sent 0.00041575 BCH – or a nickel – to the Ifwallet, without realizing there was an identical amount of BSV attached to the BCH. The Ifwallet split the transaction into two and my wallet ended up with 0.00041575 BSV as well.
After the transaction confirmed, I simply used Silverblood’s directions and sent money to the Cashaccount.info name “Jamiecrypto#116.” The transaction immediately showed a sent transaction to the Cash Accounts name and the process was much simpler than copy and pasting an alphanumeric string to use as an address. Overall the application worked well and if more wallets integrate this feature it would likely make sending and receiving easier for newcomers. However, some people will definitely take issue with reusing addresses and may not find the Cash Accounts payment system compatible with efforts toward financial privacy.
What do you think about Ifwallet implementing Cash Accounts support? Do you think concepts like Cash Accounts is a good idea? Let us know what you think about this subject in the comments section below.
Disclaimer: Readers should do their own due diligence before taking any actions related to the mentioned companies or any of its affiliates or services. Bitcoin.com and the author are not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Neither Bitcoin.com nor the author is responsible for any losses, mistakes, skipped steps or security measures not taken, as the ultimate decision-making process to do any of these things is solely the reader’s responsibility. This editorial is for informational purposes only.
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The post Bitcoin Cash-Focused Ifwallet Implements Cash Accounts Name System appeared first on Bitcoin News.
IBM Corp. fell short in its latest attempt to prove machines can triumph over man. But it came close.
The tech giant’s 6-year-old artificial intelligence debating system, affectionately dubbed “Miss Debater,” went head to head with one of the world’s most decorated practitioners Monday. After a…