With wild swings ter value and the rise of innumerable cryptocurrencies beyond bitcoin, an independent rating system for individual currencies makes sense.
Inject Weiss Ratings, the Florida-based research rock-hard founded by Martin Weiss te 1971.
The sector`s market turmoil created a need for an impartial rating system based on objective gegevens and research, Martin Weiss told Benzinga.
&ldquo,The primary drivers of investment decisions te crypt currency are not even rumors. It is chitchat on online forums. Little news and drivers have bot enough to trigger a large buy or sell te cryptocurrency,&rdquo,
&ldquo,That is not a healthy environment for investors or for anyone. Wij felt it wasgoed time to provide objective ratings.&rdquo,
The Weiss ratings didn`t come without significant pushback from the enormously outspoken crypto community.
The response has bot perverse, Weiss said: The rating agency&rsquo,s webstek wasgoed hacked the night prior to the release, amid widespread social commentary te Korea that the ratings would be negative to cryptocurrency, but Weiss said he is not anti-cryptocurrency.
&ldquo,There has bot outrage. The crypto community believed wij would be anti-crypto,&rdquo, he said.
Weiss insists that he is fundamentally optimistic about the long-term future of the space.
&ldquo,Wij have no axes to kiezelsteentjes for or against. Our ratings are a blend. Wij are looking at it spil an investment. Our ratings are for investors and fresh investors coming into the marketplace.",
Four Components Of The Weiss Ratings
The Weiss ratings were developed looking at four areas within a rekentuig proefje:
- Potential risk te terms of price volatility.
- A technology Index, which looks into the coins white papers, source codes and commentary to determine which currencies have the most sturdy features.
- A fundamental index, which measures cryptocurrencies` adoption, security and real-world spectacle.
Why Bitcoin Received A C+
Once the ratings were released, cryptocurrency frontrunner bitcoin wasgoed smacked with a C+, leading to questions on how the ratings and metrics were calculated.
&ldquo,The one rating that has got the most flak wasgoed bitcoin,&rdquo, Weiss said.
&ldquo,Most felt bitcoin should be closer to an A. Ter our fundamental index, wij give it a high grade. Bitcoin has the fattest adoption, the thickest brand, it gets a good grade for that. But te terms of risk, all the cryptocurrencies are getting a clip because of the extreme volatility,&rdquo, he said.
Bitcoin did well ter 2018, but wasgoed outperformed by many altcoins by a broad margin, Weiss said &mdash, since bitcoin is not a stellar performer among peers, it did not receive spil high of a rating ter Weiss` prize category.
The largest challenges for bitcoin may come te the technology sector.
Two challenges facing bitcoin stem from its technological underpinnings, Weiss said.
&ldquo,I don&rsquo,t think the original creators of bitcoin could anticipate the level of success it`s had. The lack of built-in governance is an punt. Other altcoins are demonstrating for users to vote for upgrades on centralization,&rdquo, he said.
Bitcoin doesn`t have a built-in mechanism that can lightly promote an upgrade te its technology and lacks a governance feature.
&ldquo,Bitcoin can have minor upgrades to fix bugs, but not enough to keep up with the switching requests of the ecosystem. This is creating a lotsbestemming of confusion ter the bitcoin community. A lotsbestemming feel an upgrade is necessary,&rdquo, Weiss said.
&ldquo,Imagine the very first cell phone coming out and not being able upgrade it. Bitcoin is a victim of its own success &mdash, with the surge te usage you are witnessing clogged networks and a very slow and expensive payment process.",
Altcoins Cardano, EOS Demonstrate Promise
The average transaction cost for bitcoin is $Ten, leading to some pushback from merchants who have subsequently suspended usage or acceptance of bitcoin. Payment processor Stripe recently announced the suspension of bitcoin on its toneel.
Weiss said he does see some promising cryptocurrencies that are combating some of the issues bitcoin is experiencing and taking the technology into the 2nd and third generation, citing Cardano and EOS spil examples.
Disclosure: The author possesses shares of BTC.