31 Oct Weiss picks 4 cryptocurrencies to avoid and why
In two recent blog posts, Weiss Cryptocurrency Ratings picked for cryptocurrencies to avoid and another for that it considers “buy-rated.”
Today, we’ve got a quick summary of Weiss ratings on those cryptocurrencies analyst Juan Villaverde says to avoid and some insight into the reasons behind his analysis.
Grades on 111 cryptocurrencies
Weiss’s cryptocurrency ratings are often controversial, but they have a thorough methodology with the latest data on more than 3000 tokens and cryptocurrencies.
The analysts issue “grades” on more than 100 coins and tokens and, no, bitcoin isn’t in their top four that get a B- or better “buy” rating. Much to the chagrin of bitcoin Bulls, bitcoin only gets a C+.
Four separate computer models are used in assessing investments, including the technology and its technical potential; real-world adoption; investment risk; and the potential investment reward.
Four cryptocurrencies to avoid
So, with those grade guidelines, here are four cryptocurrencies to avoid taken from 48 cryptocurrencies that Weiss rates a “D+” or lower.
Aurora Chain (AOA) gets a D- grade because of four red flags. First, its consensus algorithm is not unique, despite its claims. The description of smart contracts is copied from Wikipedia. No programmers or developers are featured on its website and there is no visible code. Finally, there are sparse adoption metrics and very weak trading volume.
Bitcoin clone Bitcoin Diamond (BCD) received a D rating. Chief among the criticism of BCD was the use of existing bitcoin code downloaded and adopted with few changes and no enhancements. After much hype, founders awarded themselves higher than usual coin inventory, which was promptly converted into original bitcoin. With limited support for the lightning network, a small community of users and virtually nonexistent support, the rating seems realistic.
Credits (CS) claims it can do one million transactions per second. There’s no legitimate proof and that has resulted in a grade of D. Developers used the MD5 hashing angle algorithm, widely recognized to be cryptographically broken and a security risk. Several false claims were discovered, including the consensus algorithm transaction speed, as well as high-level hype that leaves the $20 million ICO questionable according to Weiss analyst Juan Villaverde.
With a rating of E-, Mixin (XIN) is at the bottom of the cryptocurrency barrel. In fact, I can’t ever recall seeing anything graded as E-. Among the potential problems with this token are possible, fake LinkedIn profiles, a white paper with few details on how it will accomplish its extravagant claims, no functional app, and GitHub has no record of the code the developers claim to have used to build their product.
Villaverde ends with this succinct advice: “My recommendation: Don’t touch these four coins with a ten-foot pole.”