How will an Independent Rating Help Institutional Investors to Invest in the Secondary Market
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!
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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 Incmay have just come up with the most complete solution! Visit the website for more details on the project!
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Crypto Business World
CBW - External Analyst