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In Brief

• Proof of work is a consensus mechanism system that involves the use of mining rigs, heavy computations, high electrical power supply, etc. to solve heavy mathematical puzzles in validating transactions and keeping the entire system secure.
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• Market capitalization refers to the total value of an asset that’s available in circulation. The formula for deriving an asset market cap is Market Cap = Current Price x Circulating Supply
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• The top proof-of-work cryptos by market capitalization are Bitcoin, Dogecoin, Ethereum Classic, Litecoin, and Monero.

They are over 12,000 Cryptocurrencies existing, and every day new ones are created using different consensus systems like Proof of work, proof of stake, etc.

How can we possibly value these cryptos to know which ones have a good potential and adoption rate?

The price of a crypto asset is a good way to measure its value, However, investors make use of market capitalization because it’s more effective.

In this reading, we are going to look at the top proof of work cryptos by market capitalization, but then, let’s define some terms.

What is Proof of Work

Proof of work is a consensus mechanism system that involves the use of mining rigs, heavy computations, high electrical power supply, etc. to solve heavy mathematical puzzles in validating transactions and keeping the entire system secure.

What is Market Capitalization

Market capitalization is a popular way of ranking cryptocurrencies based on their value, and it’s achieved by multiplying the current price of the asset by the existing circulating supply.

Market capitalization tells us more about a crypto asset's value than the current price of the assets.

For instance, asset A with a price of $1 per token and a circulating supply of 100,000 will have a market cap of $100,000

While asset B with a price of $0.7 per token and a circulating supply of 200,000 will have a market cap of $140,000

This shows that asset B has more value and adoption rate than asset A despite the price difference.

Top proof of work cryptos by Market Capitalization

Bitcoin

Bitcoin is the first successful cryptocurrency as well as the first to operate a proof of work consensus system. It was launched in 2008 by a person or an organization known as Satoshi Nakamoto whose identity remains a mystery today.

At the time of writing Bitcoin has a market cap of $368 billion making it the number one top proof of work crypto by market capitalization.

Dogecoin

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Dogecoin is a proof-of-work consensus cryptocurrency that started out as a joke but is now among the top cryptocurrencies in the world. Dogecoin was developed in the year 2013 by Billy Markus who later sold all his holdings and abandoned the project. 

With support from the community and other influencers like Elon Musk, the world's richest man, Dogecoin was able to gain momentum and mass adoption.

At the time of writing, Dogecoin has a market cap of $8 billion making it the number one top proof of work crypto by market capitalization.

Ethereum Classic

Ethereum classic went live in the year 2016 to complement Ethereum, and it was created by Vitalik Buterin and Gavin Wood, the original creators of Ethereum.  

At the time of writing, Ethereum Classic has a market cap of $5.3 billion making it the number three top proof of work crypto by market capitalization.

Litecoin

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Litecoin is popularly known as the lite version of Bitcoin, founded in the year 2011 by Charlie Lee, an ex google employee. Litecoin is similar to Bitcoin protocol but differs in other technicals like hard cap, hashing algorithm, block transaction time, etc. 

At the time of writing, Litecoin has a market cap of $3.8 billion making it the number four top proof of work crypto by market capitalization.

Monero

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Monero came into existence in 2008 with the aim to take decentralization and privacy further than what Bitcoin has done. Monero is said to be more anonymous than Bitcoin because in the system there’s no concealing of the user’s identity making it impossible to track transactions unlike in Bitcoin.

At the time of writing, Monero has a market cap of $2.6 billion making it the number five top proof of work crypto by market capitalization.

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