CoinMarketCap Commits To Transparency After Data Manipulation Worries
When you open up your browser what is the first thing you type?
For many enthralled with cryptocurrencies, it is often CoinMarketCap.com (CMC), a premier crypto statistics and price tracking site. The site quickly blew up last year in direct correlation with Bitcoin’s historical run-up, bringing thousands, perhaps even millions of new consumers into the industry.
According to CMC’s five-year anniversary post, the site has garnered over 60 million visits in the first half of 2018 alone, attesting to the fact that it has become an integral part of the cryptocurrency industry.
Despite holding a place that is near and dear to the hearts of many cryptocurrency enthusiasts, CMC has still been subject to harsh criticism from some skeptical players in this industry. This criticism has mainly taken the form of accusations of posting exchange data from platforms that promote wash trading or manipulation.
However, in a July 19th announcement, the CMC team stated that they “stand for data transparency and clarity,” and introduced a variety of new features to help combat falsified/fraudulent points of information alongside their statement.
Statistics Website Brings Falsified Exchange Data Issue To Light
The statistics service first opened up their announcement by stating:
In recent weeks, we have heard increasing concern around exchange volumes and rankings. There are three main concerns that have been brought to our attention, that have been skewing the perception of the data on the site
CMC went on to explain the three primary issues with exchange data today.
Firstly, the issue with fee-free or transaction mining exchanges. For those who are unaware, these exchanges use a fee structure model that rebates users with an exchange’s in-house crypto when transactions or trades are made. Although this may sound innocent enough, this can often encourage consumers to trade cryptocurrencies back and forth with themselves, creating volume artificially.
Secondly, CMC pointed out that low fee exchanges promote their extremely minimal fees to help spark trading activity. While this normally isn’t a problem, for users of CMC this isn’t made apparent when looking at exchanges on the statistics website.
Last but not least, artificial volumes or wash trading, which is by far the most dubious and complex problem with exchanges today. Due to the fact that CMC and other statistics websites list exchanges by volume, long story short, many questionable exchanges may enlist the help of bots or API manipulators to create artificial volume.
CMC’s Proposed Solutions To The Issues
However, CMC has proposed a plan to amend these issues. The site wrote:
Going a step further, we will be progressively updating our exchange rankings to be even more in line with our view that users should be given the power to experience and use the data in a way that fits their needs most.
CMC will now introduce new ways for site users to filter through data given by CMC, namely allowing filtering by volume data and by the fee structure of an exchange. Additionally, the site will introduce new categories of exchange data, such as the 7-day and 30-day volumes, to show if an exchange has consistent volumes.
It is clear that CMC is ready to make a step in the right direction, ensuring that they only have the best intentions when providing data for the cryptocurrency consumers.