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How will an Independent Rating Help Institutional Investors to Invest in the Secondary Market
Nov, 09 2018
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Why does the World Need an Independent Rating for Cryptocurrency
Assets?
A study conducted by Deloitte concluded that of the 26,000 blockchain
projects that have been created, 92% of them are now obsolete. Blockchain
systems are difficult to create from scratch as one mistake in design can
compromise the entire system, and this had led to the demise of the majority of
blockchain environments established. As for the blockchain systems currently
available, privacy and scalability issues prevail as research is ongoing to
solve these problems. There is no regulatory
committee to govern blockchains. Noders, miners and developers have a lot of
power in their hands. Manipulations can take place to suit their need and this
may not necessarily help users. Some blockchain environments like Monero and
ZCash (depending on the transaction type) are untraceable. Since blockchain
systems are extensively distributed, in a case of fraud or an erroneous
transaction, pinpointing the exact location within the blockchain could prove
to be difficult. Provisions must be made to limit the nodes accessing and
joining a network. Only trusted nodes must be allowed into a system.
Due to the lack of regulatory oversight,
several market manipulations and scams take place as well. Users must be
careful when choosing an exchange to buy from or a wallet to store their coins
in. Another problem is the fact that all transactions are carried out over the
internet. Transactions are between buyer and seller and there is no
intermediate. This process itself is bound to its own set of risks. Untrusted
service providers may abscond with your coins and there will be no way to
recover them. It is quite difficult for cryptocurrency asset investors to
determine which asset they should invest in. The number of ICOs in the market
make the process of analysing each and every cryptocurrency asset properly
quite tough. On an average 5-6 new ICO issuances take place each day. This
further complicates the process of choosing a viable investment option as there
are way too many options to choose from!
Please refer to –
Experienced investors may have the
resources to conduct a quality Due Diligence (DueD) for each ICO they may wish
to invest in. They may hire specialists to prepare in-depth reports and assess
all the investment risks involved in investing in a particular cryptocurrency
asset. Not every investor is as fortunate. Investors may lack the expertise
required to make a judgment, or may not possess the necessary resources to
conduct a thorough research procedure. This may lead them to investing in an
asset on the virtual market which may end up being fraudulent and cause them
immense losses.
The market has been plagued with several
cases of outright fraud and absconding parties. An unbiased rating system could
go a long way in solving this problem. Rating a particular project on the basis
of the risks involved in investing in it along with extensive research and
analysis of all the aspects behind that project could help investors have a
clearer picture of the market. Investors could categorize suitable investment
options on the basis of this rating and make a choice without the fear of
fraud. Although a rating does not guarantee the competence of an investment
opportunity, it guarantees its sanctity and helps remove the fraudulent bunch
from the market.
Is There any Cryptocurrency Asset
Rating Institution/Mechanism Available? Is it Trustworthy?
Crypto
Asset Rating Inc. (CAR) is a United States based
cryptocurrency independent asset rating agency. There
are several ICOs being endorsed by celebrities. These celebrities are paid a
fee for their endorsement. Hardly any details are provided on the project and
investors are drawn into investing in the ICO because of the celebrity
associated with the project. ICO rating websites are paid off by these ICOs in
turn for a good rating. There are several rating websites paid off by ICO teams
to give them a good rating. Some other ICO rating websites and ICOs pay bounty
rewards in the form of tokens for promotion of their website and ICO. Crypto Asset
Rating Inc. falls under neither
category and is a good option going forward for investors. Crypto Asset
Rating Inc. is a genuine
independent ICO rating website offering two security tokens for US-based (ANSA
token) and non-US based (AND token) investors.
Refer to for ANSA token details-
Refer to for AND token details-
They have created an algorithm to
determine the rating of cryptocurrency asset issuing companies. The algorithm
determines the viability of the cryptocurrency asset in the long run and helps
investors differentiate between different investment opportunities. The
blockchain based rating engine is based on 150 different rating parameters and
is divided into over 15 categories, depending on the business, legal, financial
and technical risks involved in investing in a particular cryptocurrency asset.
The rating scores are determined by internal and external analysts and follow a
comprehensive layered rating governance structure.
Apart
from providing a comprehensive rating, the team also suggests certain areas of
improvement to boost the rating of a cryptocurrency asset. This may lead to a
fluctuation in rating and is visible to investors looking to invest in a
particular coin. Although the rating is not a cornerstone around which
investors should seek to invest in a particular asset, it serves as a
comprehensive guide to the various options available and enables investors to
make a decision based on this if they please. Detailed rating reports will be
published by the organization and will be available to all paid subscribers.
With the number of cryptocurrency assets on the market on the rise, it is
necessary to have a parameter to differentiate between them on the basis of their
authenticity. Crypto
Asset Rating Inc.
may have just come up with the most complete
solution! Visit the website for more details on the
project!
http://www.cryptoassetrating.com/
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