China Issues Cryptocurrency Ratings Index
The Ministry of Industry and Information of China released a cryptocurrency ratings index, which they call The Global Public Blockchain Technology Assessment Index. It ranked cryptocurrencies based off their technology, application, and innovation. Ethereum ranked first, followed by Steem and Lisk. Bitcoin, the cryptocurrency with the largest market cap size, ranked 13th on the list. The list is supposed to be updated monthly. Let’s break down this list and see which coins scored the highest for each category.
First, Ethereum topped the total index scores. The index score is the sum of the three other scores. Most cryptocurrency tokens use the Ethereum blockchain so Ethereum’s rank does not surprise us. Without Ethereum, most cryptocurrencies probably would not exist today.
What may strike some people is that Bitcoin is ranked 13th. It suffered from its technology and application scores, which do not seem as alluring as some newer cryptocurrencies.
Steem ranked first in technology. This may be justified because its technology supports an average weekly transaction count of 1.8M transactions, but it is unclear how the assessment determines its ratings. Bitcoin on the other hand ranked last in technology even though the technology that supports Bitcoin has created a secure blockchain over the last 9 years.
NEO ranked number one in application, but we do not know exactly what “application” means. Does the score refer to a combination of current and potential future applications? Perhaps NEO is above Ethereum because developers and use C# and Java to develop code on the NEO blockchain, whereas Ethereum requires developers to use a less popular language, Solidity.
The last score is about innovation, which is probably about originality and offering something new to a blockchain. As the first cryptocurrency, it makes sense for Bitcoin to have the highest innovation score, but it is difficult to predict why or how the index gave other cryptocurrencies their scores. It is especially hard to grade innovation when so many blockchain projects are still in development and not fully operational.
What is the takeaway of the index?
The Global Public Blockchain Technology Assessment Index uses technology, application, and innovation to rate blockchains. It should not be viewed as which cryptocurrency is the best or which cryptocurrency is the best investment. Instead, it remarks on some independent blockchains and gives them a score for undefined categories using an undisclosed system. The index should be used for educational purposes and may suggest for people to research the coins with top scores but that is about it at this time. It is interesting to note that going forward, Bitcoin may face some challenges in the market if newer cryptocurrencies emerge with better technology and a wider application than Bitcoin.
If you want to learn about some more specifics from the coins mentioned in the index, check out BlockWolf’s coin research.