CoinMarketCap is a six-year-old website which keeps track of the market capitalization of cryptocurrencies such as bitcoin and 2100 and more altcoins. People rely on this website as a valid way to measure the market.
Although CoinMarketCap has been a go-to website in the cryptocurrency space, it is hard to argue that it is not complicit in reporting false crypto volumes. A report published in Bitwise affirmed that 95% of all the Bitcoin volume in the cryptocurrency exchanges was actually fake. According to a report in Wall Street Journal, prices for some of the most popular cryptocurrencies dropped sharply when CoinMarketCap changed its data. CoinMarketCap came under fire for relying on faulty data when calculating exchange trading volume.
Luke Wagman’s stand against Bitwise report
Luke Wagman, the Chief Evangelist at CoinMarketCap stated that fake trading volumes are not specific to CoinMarketCap. He said that it is an industry-wide issue without an easy solution.
Wagman also mentioned that the website would provide more information to users so they can draw their own conclusions. He said that by giving control, users could evaluate the exchanges rather than actively policing. He also added that from a business point of view, delisting exchanges with fake trade volumes was not a solution as it would be met with criticism. It would also make CoinMarketCap a mediocre source of information source.
Wagman added that there is no simple or easy solution for such a big problem. But CoinMarketCap announced an initiative with Data Accountability & Transparency Alliance in an effort to calm the damage caused by the fake trade volume allegations. In addition, all exchanges listed on CoinMarketCap were given a 45-day deadline to send live trading and live order book data. This data would be used to determine liquidity, order book depth, and spreads.
In an attempt to repair the tainted image, CoinMarketCap DATA will promote accountability, greater transparency, and disclosure from projects in the crypto space. To make it easier and more intuitive to explore and interact, it will also introduce a new blockchain explorer for a more down-to-earth interface
Gedi is passionate about fast cars, video production, travels and the Internet. He has years of experience working as User Interface Engineer with a demonstrated history of working in the information services industry. Skilled in Web Applications, NodeJS, React, Redux and UI. Growing interest in Bitcoin and cryptocurrencies, he joined TheDailyCoins as a writer.