Popular cryptocurrency trader and investor, Davincij15 published a document yesterday that provides the guidelines on creating a new ranking system for cryptocurrencies to be used in fundamental analysis.
The man first came into the spotlight in the crypto industry when he uploaded a video of himself on the internet where he talked about the characteristics of Bitcoin, its advantages as a means of storing value and electronic money as well as the accelerated growth that this technology (practically unknown at the time) would experience in the coming years.
It must be noted that the price of Bitcoin had already soared by over ten times from its initial price when he uploaded the video, from $0.3 to $9.57.
The document has three sections: The first part establishes a general classification of cryptos in groups of 4 Tiers. The second part explains a system to give a score to each cryptocurrency, adding or subtracting points according to their characteristics. The third part lays down guidelines for successful crypto trading.
Regarding the first tier of cryptocurrencies, the document says,
“The cryptocurrency must be in the top 25 in market capitalization excluding stable coins. The cryptocurrency must not be centralized meaning there are no limits to the number of nodes that can exist on the network or the number of nodes increases in some fashion over time and/or based on usage. Also, it must have solid marketing and promotion behind it.”
The tier 1 cryptocurrencies included currencies like Bitcoin, Ethereum DASH, Litecoin and more.
The second tier was described by the document as,
” These cryptocurrencies are up and coming they have a strong community and developer support but are lacking in other areas. The project is interesting and different enough from bitcoin to stand on its own. These coins must be listed on 5 or more exchanges and working end user wallets.”
According to the document, almost all second tier currencies are copies” of Bitcoin. Although, cryptocurrencies like EOS could fall into this category.
The third tier of digital currencies by this ranking method is described by the document as,
“These cryptocurrencies may have a developer community even if they are doing nothing at the moment and have little or no roadmap. Alts that fall below $10 million in market cap but are listed on at least 3 exchanges.”
The creator included Dogecoin in this tier.
The fourth and last tier of cryptocurrencies in this ranking system is described as,
“…dead, broken chains, or dying coins with no development team working on it, little community support and no significant changes to the code base over a year. Also if the cryptocurrency project with a market capitalization value of less than $1 million. The odds of a turn around are slim to none. However, if the coin is traded on more than one exchange pump and dumpers will attempt to run this coin value up and at that point, profit can be made…”
He included MaxCoin as a fourth tier cryptocurrency.
However, Davincij15 has accepted that the document is still unfinished. He called upon the help of the community to gather feedback that the document generates, hoping to improve upon the existing paperwork.