penang-mall-basement
29
Jan

Quick Thought: The Crypto World Needs A Rating Agency

and a decentralized one for that matter.

The problem with the ICO market is that there is too much crap out there vying for the same market of coins. Imagine allowing anyone to raise money without restriction via means of a stock market IPO and you would have all kinds of wastrels throwing shit ideas at the public, hoping to raise a little dollars for nothing. Granted, this still happens, albeit in a more organized fashion, but they are quickly sifted through and labeled as ‘trash’.

The capital markets solves this problem through the use of rating agencies, who act as a guiding light for clueless investors that are too lazy to run through company fundamentals. Having this would be a game-changer for ICOs, and create some sense of comfort and security into a system where investors currently make investment decisions based on Youtube videos and social media likes of content made by the management team. It will happen eventually, and they might as well make it decentralized.

I cannot think of a better scenario where companies and ideas are vetted by code. No biases, corruption, or emotion. Just a machine sitting there slapping on ratings based on results rather than words.

2017 was the year of cryptocurrency speculation and unfettered gains – whetting the appetite of investors by introducing a new asset class. 2018 will be the year of cryptocurrency adoption, weeding out the bad from the good. A rating agency is coming, and it is coming soon.

 

Note- I like blockchain infrastructure coins for 2018: Ethereum, Waves, NEM, Stratis