(If you didn't see the previous article, you can read it here. https://steemit.com/cryptocurrency/@jackkuveke/gamecredits-outperforms-bitcoin I give an introduction to a visualization of 118 alt coins with market caps above 250,000. There is one specific outlier that performs better than bitcoin, and that outlier is GameCredits.)
In the last article I suggested that gauging alts’ performance against bitcoin’s was like comparing apples and oranges, due to the very different landscapes for crypto when they launched. The culture had changed rapidly, the the result that trading (and manipulating the market) for profit had become the norm by 2013-15, when the majority of alts on that chart came to market.
Moreover, there’s a fundamental difference that further skews the comparison. Bitcoin trades primarily against USD, whilst alts typically trade against BTC, so bitcoin’s fluctuations are superimposed on the alts’ performance. And yet the chart measures ‘performance’ with the same metric. This makes it more like comparing apples with, say, sausages.
Mining and pre-mining
Then you have yet another dynamic, which is that not all alts experienced the same start in life. Some were mined, some were pre-mined. Whilst a handful used algorithmic issuance, like bitcoin, many others were launched with an ICO. This gave them funds for development, but also meant that the amount collected was built into the calculation for market cap at the start – broadly speaking, it ‘backed’ the coin. That might sound like it gave them a better start, but that was generally not the case. 2013-15 was still the wild west for crypto, and having investors meant having people who would do anything to profit from their investment. Pump-and-dump was often the result, with many alts functioning – by accident or design – as little more than exit scams. This makes the BTC/alt comparison something totally different again, like comparing apples and, say, umbrellas.
So what can we glean from the chart and other information about market cap and growth?
Firstly, it’s worth noting that gamecredits is a mined coin, so it’s not such a bad comparison against bitcoin as many other alts, which crowdfunded hundreds or thousands of bitcoins. Supply started at zero, rather than being created all at once and distributed to investors. Whilst that meant there was no ICO funding for marketing and development, it also meant it wasn’t beholden to investors, and there were no large holders to manipulate the market. Its issuance wasn’t a way to fund a project, whether a legitimate business or an exit scam. It was more like a tool to get a job done. That, in turn, meant a community that had a different approach to its use than if they’d taken a stake in it pre-launch. For want of a better term, it was a more hobbyist thing – again, like the early days of bitcoin. Financial reward always came into it, of course, but the approach that led to the rise and fall of so many alts in 2013-14 wasn’t in gamecredits’ DNA.
And here’s where it gets really interesting
Secondly, it’s worth looking at overall market cap. Bearing in mind that gamecredits started at a low price compared to many alts (which were ‘backed’ by ICO funding and typically started trading at some multiple of that), a circa 5,000-fold increase actually isn’t that spectacular. Absolute market cap is still only $10 million. Plenty of alts have hit that before, even if most then sunk into obscurity. Comparing GAME and BTC directly in terms of market cap is more informative than their relative growth, for reasons mentioned above and in the previous article – and even that’s not ideal due to the apples-and-sausages problem of BTC trading primarily against USD, and GAME trading primarily against BTC. But it’s probably the most meaningful comparison there is in terms of real-world adoption – which it’s fair to say should be gauged against a real-world currency, like USD. Gamecredits’ growth looks like this (thanks to CoinMarketCap.com):
Bitcoin’s looks like this over the two-year period since exchange listing (CoinDesk):
At least a couple of things are noteworthy here. One is that, after two years, both GAME and bitcoin had a market cap of around $10 million. Another is that, although both have had their bubbles, bitcoin’s was more turbulent and gamecredits’ long-term growth appears to have been surprisingly stable and sustainable. If you look back to the chart of comparison of alts against BTC, which uses a log scale, you’ll see that both BTC and GAME are roughly on their long-term trendlines right now – neither has got too far ahead of itself. (Bitcoin’s, in fact, looks beautifully stable over the last couple of years, though this is partly due to the effect of the log scale at that order of magnitude.)
The parallels are pretty striking, really. Same time from exchange listing, same market cap, same approach to creation (mining), same current position against the trendline. There is no apples-to-apples comparison possible when it comes to bitcoin, but it does look like GAME is about the closest thing there is to bitcoin back in April 2011.
If you're interested in GameCredits please feel free to join the official GameCredits slack and ask the team anything: http://gamecredits.com/slack.html