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Right now, there are a couple ways to research investment. Anyone can go on Coinmarketcap and look at the hard numbers. After looking at Coinmarketcap, it’s easy to take a trip down to Coingecko and see how thriving the community is, an often necessary step in the success of a cryptocurrency.
But what about the people that create and maintain the coin? Well, Coins Source will be using the Trust Index to help with that.
“Individuals are investing massive amounts of time, effort and money into the promotion and spread of a particular e-coin that they believe in, based mostly on the trustworthiness of the developers who are completely anonymous and have a completely unverifiable reputation.”
“In a time when we are mostly guarded and suspicious of strangers that we meet in person, we have somehow put our trust into alt-coin developers that we have never met and know nothing about. Clearly, there is some type of disconnection from reality here.”
This new take on a trust-based ranking system is something that looks to provide a new sense of security to the digital currency world. This way, the community can hold altcoin creators to a much higher standard. The new measurement tool will hopefully weed out some bad creators along the way. Coins Source plans to be a “Better Business Bureau” for the cryptocurrency community.
When Mt. Gox collapsed earlier this year, exchanges were held at a higher standard with Proof of Solvency audits. This level of community-driven standards was a great, decentralized step in the right direction to weed out potentially bad businesses. While it has not yet become the standard, it may lean more that way in the future.
The Trust Index is held in cloud-based technology. It will calculate trustworthiness based on shared information with Coins Source, but that does not mean all information needs disclosure. It is a completely optional service, and developers can choose whether or not to share specific information. However, as some have seen with the payment-processor Moolah, withholding information based on a principle may not translate well to trustworthiness.
The scoring system breaks into a few different parts:
- Email Address – Verified Email Address. (1 point)
- Bitcointalk Forum ID – Verified by post or private message; the amount of time the ID has been active and total # of posts will be factored into the score. (0.5 points for verifying account and a total of 1.5 points rewarded for # posts [0.1 point/25 posts up to 125 posts] and length of account existence [0.1/month up to 10 months])
- Facebook Profile – verify by posting to Coins Source’s Timeline or private message. (0.5 points)
- Twitter Profile – verify by private message or tweet. (0.5 points)
- Mobile Phone – verify by text message. (1 point)
- Mailing address – verify by postcard. (Coins Source sends a postcard, and you send Coins Source a code that will be on the postcard via email) (1 point)
- State ID or License – send Coins Source a photograph of your driver’s license. (2 points)
“As with anything, it will be impossible to completely eliminate risk but the score will give an overall impression of trustworthiness while still allowing for a certain level of privacy for the developer,” Coins Source said. “Obviously all of the information that is shared with us will remain private. The intention of the Trust Index is not to 100% verify the developer’s true identity but to provide a higher level of authenticity than a basic forum ID.”
Dependent on the popularity of the Trust Index, Coins Source looks to add more advanced scoring mechanisms to enhance their scoring. The Trust Index looks like it has potential to greatly impact the digital currency landscape, as well as add a higher level of security based directly on community standards. If the community demands trust, progress can be made. If the community is complacent, then the Trust Index will fail.
“This is an open invitation to everyone in the e-currency community that wants to promote a higher level of trustworthiness, reliability and honesty,” Coins Source said. “Spread the word!”
How important is security in digital currency to you? Get involved and let us know in our CCN forums.
Featured image by Shutterstock.