Unless you have been living under a rock, you must have heard about bitcoin and its huge increase in price in 2013. If you still don’t know what bitcoin is, watch this video:
The cryptocurrency world is a very interesting one and a lot of development is happening in this space. Top Silicon Valley venture capitalist, Marc Andreesen sees a lot of similarities with Bitcoin in 2014 to personal computers in 1975 and the Internet in 1993.
Bitcoin is the first cryptocurrency in the market and since it is open-source, its codes and ideas have been copied to launch numerous other cryptocurrencies. There used to be only a few alternative coins (aka altcoins) in the market but now there are hundreds of different cryptocurrencies.
Some cryptocurrencies serve an entirely new function such as Namecoin, which aims to be a distributed domain management system while others such as Litecoin and Peercoin introduced new ideas to the cryptocurrency world with scrypt hashing algorithm and Proof-of-Stake minting respectively.
There are altcoins that are launched purely for fun such as Dogecoin while there are coins launched after celebrities such as CoinyeCoin, a coin inspired by Kanye West but has since been sued by Kanye for copyright violations.
For many people in the cryptocurrency scene, altcoin trading is very much like forex trading with candlesticks, graphs and charts ruling the day. Many people seek to use technical analysis in predicting price movements while others try to use fundamental analysis to gauge market demand for a particular coin.
Market demand is usually gauged by determining the altcoin’s social media statistics and trading volume across major exchanges. Coins with more Twitter followers and trading volume can be said to have garnered more interest from the community and probably more demand. Measuring the social media statistics for each coin in the market however can be a time consuming job.
CoinGecko aims to solve this problem by measuring all these variables so that a user can get all the information required by visiting one single website. The Beta version was launched on 8th April 2014 and helps traders quantitatively and holistically determine the potential of cryptocurrencies by looking at various metrics beyond market capitalisation.
CoinGecko collects thousands of data points everyday on social media statistics, developer activity, trading volume, price and also market capitalisation data. These data are fed into a proprietary algorithm to obtain a GeckoScore that helps give a quick snapshot of the different altcoins.
That being said, cryptocurrency trading is a very volatile game and should only be played with money you are willing to lose. It is still very early days but it is an industry which has a lot of potential and growing very rapidly.
One year ago, one could easily read all the news articles and follow all development. These days there are so many articles about bitcoin and cryptocurrencies that one probably should subscribe to a weekly cryptocurrency newsletter such as Altcoin Weekly to keep up to date instead. If Marc Andreesen is spot on about his Bitcoin predictions (and he usually is), then bitcoin and cryptocurrencies in general have a very bright future ahead.