Art by beeple

There’s been a lot of talk with the latest Ethereum ATH about bitcoin dominance. The only real measure of dominance is the one tracked by this website:

There is a lot of noise in the cryptospace and as you get older and wiser you’ll learn to filter out most of that noise. One way to do that is by looking at the real Bitcoin dominance. If you uncheck the option “Include ETH in calculations” you’ll see that BTC dominance has barely budged.

You can also watch this video by Trader University which analyzes the Bitcoin dominance metric as being very naive.

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What Makes this Dominance Index Different than CoinMarketCap?

The Real Bitcoin Dominance Index only includes coins using proof-of-work that are attempting to be money.

It does not include ICOs or stablecoins.

The only coins included in TRBDI are:

  • Bitcoin (BTC)
  • Litecoin (LTC)
  • Ethereum (ETH)
  • Bsv (BSV)
  • Bcash (BCH)
  • Monero (XMR)
  • Zcash (ZEC)
  • Bitcoin Gold(BTG)
  • Ethereum Classic (ETC)
  • Dogecoin (DOGE)
  • Decred (DCR)

The formula for The Real Bitcoin Dominance Index is

Market Cap of Bitcoin / Market Cap of Bitcoin + Market Cap of Coins on above list

Why does Bitcoin Dominance exclude ICOs?

Bitcoin Dominance excludes ICOs because they are each controlled and issued by a centralized entity and so therefore cannot act as hard money. Even if the ICO intends to be money, it cannot offer any improvement over the current fiat system of centralized banking and money printing.

Why does Bitcoin Dominance exclude stablecoins?

Stablecoins have a very specific use in mind: Stablecoins act as on-ramps and off-ramps between fiat and cryptocurrencies and are just an extension of government controlled fiat money.

Because The Real Bitcoin Dominance Index is only interested in tracking which cryptocurrencies are capable of becoming global money replacements one day, stablecoins cannot be included since their value and purpose depends on fiat dollars existing.

Why does Bitcoin Dominance only include proof-of-work coins?

Bitcoin Dominance only includes proof-of-work coins in its index because, so far, POW is the only consensus algorithm known to be able to keep the network decentralized. Decentralization is important because, if it cannot be achieved, then there is no improvement over the current system of centralized banking.

Why Does The Real Bitcoin Dominance Index Matter?

The Real Bitcoin Dominance Index matters because there is currently no easy way to track proof-of-work coins only. As an alternative to Coin Market Cap, where all coins are shown, Bitcoin Dominance only tracks the coins that are attempting to be used as a medium of exchange (i.e. money).

Why is There an Option to Include/Disable Ethereum?

Ethereum is included in the index because it is a proof-of-work coin, however, many people do not think Ethereum is attempting to be money (but instead a ‘global decentralized internet’).

Because of this, we give you the option. If or when Ethereum moves to a proof-of-stake consensus algorithm, it may be removed from the index entirely.



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