Over the last few weeks, I have continued to review the top cryptocurrencies by market capitalization, looking for new blockchains to analyze. Our criteria was simple:
- The cryptocurrency needed to be an infrastructure token (aka a native asset used to pay and incentivize miners to contribute server power)
- The blockchain must have been on mainnet since July 31, 2016 (12 months since the beginning of the project)
- The value of the cryptocurrency must have sustained a value about $10 million since January 31st, 2017 (six months since the beginning of the project)
During our initial analysis, we analyzed 55 blockchains and found that 16 fit our criteria and would be studied further. Since then, we have analyzed 25 more blockchains and have yet to add any additional blockchains to the analysis.
For the most part, we are finding assets that qualify as infrastructure tokens and have been on mainnet long enough. The problem is that none of these tokens were able to maintain a valuation of over $10 million until very recently. Most of these tokens were valued somewhere between $2 million and $5 million for most of their history. It was only because of the bull market starting in April that many tokens were able to breach $10 million.
This bring up a couple of questions for our team to consider as we wrap up this phase:
- Is market cap as good of an indicator as we would like it to be to limit our pool of cryptocurrencies? The purpose of using market cap as a metric was to meaningfully eliminate under-utilized tokens which may no longer be actively developed or utilized. This is generally true, but there are tokens like Peercoin that has existed since 2012 that did not make the cut.
- If we conducted this evaluation six months ago, would $10 million be the correct choice to meaningfully cutoff cryptocurrencies?
- Would adding in factors like average daily trading volume help strengthen the analysis? What about analysis of transaction amounts per block generate?
Regardless, we think we’re narrowing in on what cryptocurrencies really matter to this industry and how to evaluate them. You can see our latest research here if you’d like to see the specifics on what we’ve done so far. If you have any suggestions or thought, leave a comment below.