US Agency Will Issue Grades To Bitcoin and Cryptocurrencies

in #bitcoin7 years ago

The Facts


We don't know much, yet, but it's been reported that the nations top rating agency will be releasing letter grades on various cryptocurrencies on January 24. Weiss Ratings rates over 50,000 institutions and investments, and their next endeavor is to provide ratings for various cryptocurrencies, including Bitcoin, Litecoin, Ethereum, Bitcoin Cash, and several others.

Apparently, they will be using a "groundbreaking model that analyzes thousands of data points on each coin’s technology, usage, and trading patterns." There claim is to provide investors with a way to "cut through the hype and identify the few truly solid cryptocurrencies."


My Initial Reaction


When I first heard about this, I got really excited. I mean, any time we can get "impartial" information from reputable and credible sources, as opposed to highly emotional and speculative opinions, it's a win, right?

What I Realized


There are several reasons why this could be quite harmful, but I'll just name a few:

  1. Unlike other financial institutions and investments, cryptocurrency is still very much in its infancy. I mean, a salty Twitter post can disrupt the market. So, I can't imagine how something this authoritative will impact the prices. It just seems sad to think that these "decentralized" currencies will be so easily manipulated by the input of a single organization.

  2. It seems difficult and illogical for them to lump every cryptocurrency into one branch, and then divvy out letter grades to each one based on particular factors. Cryptocurrencies are all very unique in what they do and how they're used.

    • Bitcoin and Litecoin are meant to be actual currencies, for example. They are meant to be implemented into an economy, and in a sense, contend with our current fiat currencies.

    • However, Ethereum isn't even a currency. It isn't meant to be a currency. It just now happens to be worth value. The real treasure in Ethereum rests in its open software platform that allows developers to build and deploy decentralized applications.

    • Ripple is meant to be a revolutionary payment infrastructure, connecting old and new financial institutions.

    • I could go on, but as you can see, every cryptocurrency not only represents something unique, they are unique.

    • It would be like a rating company saying they will rate all transportation devices. That doesn't seem possible. Each one can be classified "good" and the "best" depending upon the factors making up the rating system. Furthermore, each one could be classified "bad" and the "worst" with other factors. A car, for example, could receive a high grade if practicality was a major factor. However, if a major factor were speed, it would lose to several others.

  3. One of the things that made me most upset was the fact they were focusing their efforts on "cryptocurrencies." You see, crypto is fantastic, but most companies just use their coin as a means to produce a product that utilizes blockchain technology. So, I don't want a company to say Ethereum, for example, isn't the best cryptocurrency -- because they would be right. It's not the best cryptocurrency. But, their product is certainly one of the best, when compared to other blockchain technologies.

These were just a few points that I wanted to make related to this news. If you want to check out the announcement, you can click here. Leave a comment if you have any entertaining input/feedback! I'd love to hear your opinion on the matter.

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Coins mentioned in post:

CoinPrice (USD)📈 24h📉 7d
BTCBitcoin12874.700$9.94%-10.39%
ETHEthereum1135.060$7.32%-15.02%
LTCLitecoin206.499$5.72%-15.69%
XRPRipple1.583$-4.02%-23.62%