The value of market capitalization for cryptocurrency without PoW mining

The market capitalization of cryptocurrency based on PoS Masternode

Cryptocurrency market capitalization

The market capitalization of a cryptocurrency is the value of all coins or tokens in circulation. This indicator depends on the value of one coin or token and the number of coins. Some people, especially beginners, believe that the main factor in the success of a project is the price; this is the biggest mistake.

For example, XRP takes a higher position on the main website for evaluating the CoinMarketCap cryptocurrency and this is the correct rating, at least for coins with limited emissions or coins that can only be obtained using PoS and Masternode.

Growing capitalization is the most important indicator for investors.

Growing capitalization is the most important indicator for investors.

Suppose you bought 1 Bitcoin a long time ago, when their total number is 9 million, when the total number of coins reaches 18,000,000 you still own only 1 BTC, you can become richer only if its price in $ becomes higher since you cannot get new ones just by owning BTC. With cryptocurrencies that you can mine with your coins, the situation is quite different, let’s say you have 5000 ESBC at the start of the blockchain, and you use them for accumulation. The total coin issue 1 000 000, then you own 0.5% of all coins, when the total coin issue reaches 10 000 000 you will still own 0.5% of the total issue, that is, you will have 50 000 ESBC already. In practice, when using coins for accumulation, your share of the total output becomes larger. Since not all coins are used for accumulation, as some use coins to trade on the stock exchange, ESBC can use for bets on our Betting platform https://bet.esbc.pro

Compare price and capitalization charts:

First, let us take as a basis the graphic of our first blockchain, on which a sharp drop in price can be observed, and on the surface, it may seem like something is happening, something really bad.

The price chart of ESBC. Old blockchain.

As you can see, the price fell more than 4X times, and it can be assumed that the coin holders were at a loss. Someone was really at a loss, for example, those who bought coins and kept them on the stock exchange, hoping to sell more expensive right now. The team’s budget was also declining, as the team cannot use all those unsold for maximum accumulation.
 Let’s compare with the schedule of capitalization.

The market capitalization of ESBC. Old blockchain.

As you can see, it almost remained at the same level, regardless of the price drop, as there was a very high ROI from Masternode mining.

Let’s go to the charts after the launch of the current blockchain 2.0

https://github.com/BlockchainFor/ESBC2

The graph is quite stable in the range of 350–1800 satoshi for 6 months, sometimes there were 240, but this is an emotional sale on New Year’s holidays, they can be seen only on 5-minute charts. In general, it all seems just good, especially in a falling market.

The price chart of ESBC. Actual blockchain.

Now we will compare with the chart of capitalization.

We started with a very low cap capitalization with price 1500 Satoshi for 1 coin, but we received only 1250 for a short period and went to the area 800 Satoshi and then to 300 Satoshi. That is, at the start of the blockchain capitalization was about 15 BTC or fell to the minimum mark of 5 BTC.

The market capitalization of ESBC. Actual blockchain.

As we can see on the chart, this is a sure uptrend, the capitalization in BTC has grown more than 5 times from the start of the blockchain to the current date of May 1, 2019. And from the bottom marks of the end of 2018 — the beginning of 2019 more than 15 times.

Let’s summarize

If you keep and try to maximize the amount of your coins using PoS and Masternode mining, the ROI of your investment will be approximately equal to the behavior of the capitalization schedule, often a little better. This is not a 100% accurate analysis, as there are many factors that affect the true result of an investment, for example:

DevFee from the block, if it is taken into account in the capitalization.

The density of buy orders on the exchange for the possibility of sale.

We have on these items the full order of DevFee at the moment is 10% and we will strive to reduce it to 1% but this is another story.

I would like to advise you https://coinpaprika.com. Here is the ROI calculator that calculates it most correctly for PoS \ Masternode coins.

The statistics is not 100% correct, it gives the opportunity to see a more approximate to the real situation.

I hope this article will help you to correctly analyze trends, as many make mistakes and overlook the real situation.


Originally published at https://medium.com on May 1, 2019.