It is a neat way to store paracord. I learned how to do it from shawn's post in this thread:viewtopic.php?f=14&t=40007&st=0&sk=t&sd=a&start=0
I tried it and I found it was complicated to get the paracord off. So, rather than doing a ring, I just did the same thing but keeping it long. Thickness and length are determined by how much cord you have and how you pack it, you just go back and forth from one end to the other. If you are doing it right, it ends up looking like a big caterpillar, which is why I call it a caterpillar coil.
I've taken to leaving a little sticking out from the "base layer", if you will, with a loop on the end- just pull the other end in the other direction and it will give you the amount you need in a hurry. I keep a couple of 25 footers in my EDC bag, and while they are a pain to recoil, they deploy cleanly, never had a snag, and never had one get caught up in anything.
Theoretically, you could do a caterpillar with a climbing grade rope, and just toss the coil with some weight on the end rather than a rope bag, but I haven't tried it yet. Heck, a caterpillar coil made of 3/8" rope would probably made a suitable tool for dealing with unruly people.