Weiss Ratings, a prominent authority in financial evaluations, published its inaugural list of cryptocurrency ratings in January 2018. A little over a year later, CryptoSlate interviewed Dr. Martin Weiss, founder and leader of the Weiss Group, on the critical importance of a rating system for cryptocurrencies, as well as the future of payments, cryptocurrency adoption, and the challenges currently faced by the blockchain industry.
The Weiss Group founder studied political science as an undergraduate at New York University. He also holds Master's and PhD certificates in Social Anthropology from Columbia University. Interestingly, Dr. Weiss is a polyglot with knowledge of Cantonese, German, Spanish, and other languages, honed at the Berlitz Center of Languages.
Dr. Martin Weiss established Weiss Research, a firm focused on equipping investors with relevant information and tools for decision-making; Weiss Ratings, an agency providing independent ratings of investment products; and moneyandmarkets.com, a financial information portal. All three corporations are subsidiaries of Weiss Group, a financial services company he founded in 1971.
The CEO serves as the editor of a financial newsletter known as the Safe Money Report and has authored several books about safely making profits from investments.
Dr. Weiss on the need for a rating system:
“Truly independent rating systems are sorely needed to help individual and institutional investors cut through the hype and fear—to get to the genuinely promising cryptocurrencies.”
Weiss added that the Weiss rating system for cryptocurrencies was not created exclusively for investors, but for all stakeholders—including users, sponsors, developers, miners, and token issuers.
Additionally, the CEO revealed the three integrated rating systems Weiss Ratings has for cryptocurrencies: the Weiss Technology/Adoption rating for stakeholders with a long-term outlook on risk and reward potential; the Weiss Risk/Reward rating for stakeholders interested in short-term trading opportunities; and the all-encompassing Weiss rating system for a broad-based evaluation of cryptocurrencies.
Prior to entering the cryptocurrency industry, Dr. Weiss introduced the first independent insurance ratings in 1989, the first ratings of mutual funds in 1992, the first Health Maintenance Organization ratings in 1994, and the first risk-oriented ratings on stocks in 2001.
Dr. Weiss believes developments in blockchain technology and the cryptocurrency industry are analogous to the rise of the internet. He noted the similarities between alternative technology movements and the growth in adoption of both technologies, likening the 2017-2018 swing in cryptocurrency markets to the dot-com bust of 1999-2003, especially how they were both followed by the continuous evolution of their respective technologies and a push toward mainstream adoption.
In Dr. Weiss’s assessment, blockchain technology, in comparison to the internet, holds greater disruptive and transformative potential. The CEO explained that blockchain technology could reshape the global banking system, democratic voting processes, social networks, and legal systems, among others.
Indeed, several developments are already being made in the areas of voting and governance. While there are ongoing attempts to use blockchain technology to bring transparency to elections, some financial institutions are looking to apply the technology to improve efficiency.
Regarding money transfers in the future, Dr. Weiss admits that “the behind-the-scenes processing and validations will always be far more complex than sending an email.” In the future, he expects better user experience and seamless transactions when the right applications are fully developed.
User-friendly apps for seamless money transfers in the traditional financial system are already here. In Asia, applications such as WeChat Pay and Alipay allow users to make rapid money transfers. Various mobile money platforms in Africa effectively serve the same purpose.
When it comes to blockchain-based payment applications—Dr. Weiss noted—further development will be required to build applications that will achieve similar levels of speed and ease of use.
When asked about the challenges being faced by the cryptocurrency industry, Dr. Weiss pointed to:
“The scarcity of independent research to help all stakeholders agree on basic facts, engage in sound debates, and move toward common goals.”
Dr. Weiss also shared his views on the right approach to conducting mutually beneficial collaborative research in the cryptocurrency industry:
“[Cryptocurrency industry firms] can lead by encouraging awareness and transparency regarding conflicts of interest in the crypto industry.”
The CEO believes that businesses in the industry should avoid conflicts of interest by avoiding paid “research.” According to Weiss, this will allow for the free flow of objective information the industry needs to grow.
