Stephanie Hurder, a CoinDesk columnist, is a founding economist at Prysm Group, an economic advisory focused on the implementation of emerging technologies, and an academic contributor to the World Economic Forum. She has a PhD in Business Economics from Harvard.
On May 15, Decrypt reported that six weeks after being acquired by Binance, the crypto data aggregator CoinMarketCap updated the method by which it ranked exchanges on its site. This update, perhaps unsurprisingly, moved Binance into the top spot. Critics argued CoinMarketCap was basing its rankings on factors that had little to do with the fundamental quality of exchanges, such as liquidity and security. The COO of CoinMarketCap competitor CoinGecko added that CoinMarketCap would need to “go deeper to get a more holistic picture of things.”
This was not the first data scandal for the popular site, which has committed to refining and expanding its ranking metrics in light of the industry outcry. But it added to a general feeling of frustration regarding the availability of reliable, fair crypto industry metrics. Eustace Cryptus, writing for bitcoinist.com, lamented: “Will CoinMarketCap ever provide accurate crypto data?”
Determining a set of metrics that will be used to compare projects, companies or national economies can be a fraught exercise. Even the most stalwart measures of national accounting come with controversy. Gross Domestic Product (GDP) had immediate and vocal opponents after its introduction in 1934. Critics of the unemployment rate argue that excluding anyone who is not actively seeking work from the base population misrepresents the status of the labor market. Yet, both of these measures remain widely applied and newsworthy because they provide insight into important dimensions of the health of the economy.
Despite inevitable controversies, it is essential not to abandon the endeavor of measuring economic systems. It would be far more challenging to gr...