Herp Rating Agency

[Herp]

Herp Rating Agency is an initiative born out of the need for due diligence in the Bitcoin ecosystem.

"An ounce of prevention is worth a pound of cure"

"Venienti occurrite morbo."

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[Herp]

Ratings:

Stocks:

Neo&Bee  - Buy Rating
Trading on https://www.havelockinvestments.com/order.php?symbol=NEOBEE
Company website http://www.neo-bee.com/en/
Discussion thread https://bitcointalk.org/index.php?topic=529946.0
BuyAHash - Buy Rating
Trading on  https://www.litecoininvest.com/security/BAH-C.PT (passthrough). Bulk of the shares are to be traded later this month on the soon to be released Ciphetrade exchange.
Company website http://buyahash.com/
Discussion thread https://litecointalk.org/index.php?topic=3126.0

Cryptocurrency:

Mastercoin - Strong Buy Rating  
Best place to buy https://masterxchange.com/
Website http://mastercoin.org/
Maxcoin - Hold Rating
Best place to buy https://bter.com/trade/max_btc
Website http://www.maxcoin.co.uk/

[solid12345]

Did you tank Mastercoin -25% to buy SPA Herp? 

[Herp]

Did you tank Mastercoin -25% to buy SPA Herp?  

Great things are coming for Mastercoin:

 
    Storj – distributed dropbox

    Toroken – incentivizing Tor relays

    SharedMiles (smiles) ride-sharing
    (This is also the team that won the Tel Aviv Hackathon)

    Coinvance – bounty management for Bitcoin 2.0 workforces

    BlockAuth – on-blockchain identify verification

    GoxCoin -  purpose of which will be to help out MtGox users recover some of what they've lost.
    More here about GoxCoin http://www.humint.is/goxcoin/




Team is working very hard at the moment to complete OmniWallet, which should be the easiest to use decentralized exchange/web wallet ever created. You can test it out as it's in alpha stage now https://test.omniwallet.org/

This is most enticing crypto by far.

Can't say the same about SPA.

[IamNotSure]

Good idea !

What's you opinion on :

- Cryptsy fee shares (Cryptostocks)

- CryptX petamine (Havelock)

- Counterparty XCP

- NXT

[Herp]

Good idea !

What's you opinion on :

- Cryptsy fee shares (Cryptostocks)

- CryptX petamine (Havelock)

- Counterparty XCP

- NXT

Thanks! Interesting list.

Cryptsy is at the moment the place to be for alts and it's making nice money right now. It's located in US, however and Vern is looking to start fiat USD trading, which would put Cryptsy in the crosshair of regulators. As many learned so far the hard way, US is not most Bitcoin business friendly place. I'd be cautious because of this.

CryptX - I haven't looked into it. Sounds like a mining operation. I have studied, however, many mining operations such as ASICminer and others and best and most reliable I could find, is BuyAHash by far. Has most honest and proven management, very reliable. It survived few exchange going under. You not only get profits from their ongoing mining operations focused on most profitable alt coins of the day but you also get a cut from their hardware sales which are booming like crazy. They are highly transparent and recently got incorporated in Hong Kong, even though they are US based. This stock is one juicy morsel, growing like mad at the moment, unlike ASIC miner where owner is anonymous, that offers little to no transparency.

Counterparty XCP - Was just having a debate on Counterparty in another thread. Counterparty is basically a Mastercoin clone that came pretty late to the party that doesn't have the money or the team and support Mastercoin has. They've pretty much replicated Mastercoin, the code, using the bitcoin blockchain, even the creation model to some extent. I'd pick the best of breed, which is Mastercoin.

NXT - this one I find interesting. It's also a 2.0 crypto (via Colored Coins) that uses 100% proof of stake, which is environmentally friendly. This could be an advantage. They have one of the best promotion team and are very good at hype, some of the best actually. Their "swarm" teams are pretty effective at doing cheap marketing and spreading the word. I haven't touched NXT yet because I feel it has very much glazing on the surface without much substance underneath all the nice glamor they've managed to project. Their decentralized exchange is yet to be released, not even sure they have any ETA on that http://www.nxtcrypto.org/nxt-coin/nxt-decentralized-exchange while Mastercoin already has theirs out and ready to use.

[IamNotSure]

Good idea !

What's you opinion on :

- Cryptsy fee shares (Cryptostocks)

- CryptX petamine (Havelock)

- Counterparty XCP

- NXT

Thanks! Interesting list.

Cryptsy is at the moment the place to be for alts and it's making nice money right now. It's located in US, however and Vern is looking to start fiat USD trading, which would put Cryptsy in the crosshair of regulators. As many learned so far the hard way, US is not mostly Bitcoin friendly place to do business. I'd be cautious because of this.

CryptX - I haven't looked into it. Sounds like a mining operation. I have studied, however, many mining operations such as ASICminer and others and best and most reliable I could find, is BuyAHash by far. Has most honest and proven management, very reliable. It survived few exchange going under. You not only get profits from their ongoing mining operations focused on most profitable alt coins of the day but you also get a cut from their hardware sales which are booming like crazy. They are highly transparent and recently got incorporated in Hong Kong, even though they are US based. This stock is one juicy morsel, growing like mad at the moment, unlike ASIC miner where owner is anonymous, that offers little to no transparency.

Counterparty XCP - Was just having a debate on Counterparty in another thread. Counterparty is basically a Mastercoin clone that came pretty late to the party that doesn't have the money or the team and support Mastercoin has. They've pretty much replicated Mastercoin, the code, using the bitcoin blockchain, even the creation model to some extent. I'd pick the best of breed, which is Mastercoin.

NXT - this one I find interesting. It's also a 2.0 crypto (via Colored Coins) that uses 100% proof of work, which is environmentally friendly. This could be an advantage. They have some of the best promotion team and are very good at hype, some of the best actually. Their "swarm" teams are pretty effective at doing cheap marketing and spreading the word. I haven't touched NXT yet because I feel it has very much glazing on the surface without much substance underneath all the nice glamor they've managed to project. Their decentralized exchange is yet to be released, not even sure they have any ETA on that http://www.nxtcrypto.org/nxt-coin/nxt-decentralized-exchange while Mastercoin already has theirs out and ready to use.

Hey, thanks for your analysis !

I'm not invested in all of these projects/ coins but I'm following closely. Here's my 2¢

I'm a bit disappointed by Cryptsy lately, and I think DOGE reddit community rant against the site will harm its revenue. It was 5/10% yearly but now the dividends have decreased and the competition is tough in the alt (shit/scam) coins exchanges. What you say about US is not mostly Bitcoin friendly place is true. SELL

About PETA mine, since they have a brick and mortar business and given that they are not anonymous (and located close to my home), I tought it would be intresteing to analyze it. I tend to avoid "mining" stock when they've not proven they're not ponzi/ scams. But in the end, "scam" risk aside, we are all intrested in profitablity and it's always difficult to judge. HOLD

I'm invested in both XCP/MSC, and since you recommended MSC I wanted to know you opinion on XCP. Seems to me that you have a small cognitive bias (no offense) about MSC. I've not compared the code so I can't tell if it's a clone or the same idea written from scratch. I think both approaches are interesting (fundraising & proof of burn) and the development seems to be more centralized in XCP (and less bounty driven) although it's not a will but just the fact that the original devs are really active since the inception of the project. IMHO, both can coexist and be successful in a "blue ocean" 2.0 world (but it might be me that has a cognitive bias this time ) STRONG BUY on both

I'm not convinced of the future of NXT, maybe because the "unfair" starting distribution and the alternate blockchain which has a lot to do before being taken seriously by the "real" world. But i'm following too. HOLD

[Herp]

About PETA mine, since they have a brick and mortar business and given that they are not anonymous (and located close to my home), I tought it would be intresteing to analyze it. I tend to avoid "mining" stock when they've not proven they're not ponzi/ scams. But in the end, "scam" risk aside, we are all intrested in profitablity and it's always difficult to judge. HOLD

Transparency is always good, which is why I love BuyAHash. First and most important thing is not to lose money and that becomes very hard when you don't know who's in charge of the operation and can't peek behind the curtain.

I will take a look at PETA and try to form an opinion.

I'm invested in both XCP/MSC, and since you recommended MSC I wanted to know you opinion on XCP. Seems to me that you have a small cognitive bias (no offense) about MSC. I've not compared the code so I can't tell if it's a clone or the same idea written from scratch. I think both approaches are interesting (fundraising & proof of burn) and the development seems to be more centralized in XCP (and less bounty driven) although it's not a will but just the fact that the original devs are really active since the inception of the project. IMHO, both can coexist and be successful in a "blue ocean" 2.0 world (but it might be me that has a cognitive bias this time ) STRONG BUY on both

I'm not convinced of the future of NXT, maybe because the "unfair" starting distribution and the alternate blockchain which has a lot to do before being taken seriously by the "real" world. But i'm following too. HOLD

We are all biased to certain extent and highly emotional creatures to a larger degree than we would like admit.

Those who compared the code know they've used what Mastercoin made available. They've taken the Mastercoin open source code and used it. They've also used Mastercoin's idea to ride on top of Bitcoin blockchain, thus removing the need for mining.

Our competitors consist of several systems which have a long way to go to catch up with us, and one knock-off which literally forked our spec and rushed some half-baked stuff out the door.

 https://bitcointalk.org/index.php?topic=265488.msg5749265#msg5749265

Their proof of burn was based on Mastercoin distribution model with a twist. They've destroyed the Bitcoins instead of keeping them to generate growth. It might have seemed like a good idea at the time, but I think this will come to haunt them later or bite them in the ass if you will. Lack of funding is what killed many good projects. Mastercoin doesn't have such problem. They are swimming in cash, which is also one of the bonuses you get when you buy into it.

As someone pointed out in the other thread, Counterpary devs are anonymous, therefore they can't join events to raise awareness and do promotion. Mastercoin, however, was present and will be present at all major Bitcoin events to promote the project and talk to VCs about Mastercoin based projects. It also has some very interesting people behind it and strong financial backing from several key figures from the Bitcoin world like Brock Pierce https://twitter.com/brockpierce

People might not see these advantages now, as they are less obvious, but they will become very apparent in the months to come. Ultimately, the 2.0s with best apps and ecosystem will be the ones to come out ahead. From what I've seen going on behind the scenes, MSC will have best and most varied and exotic ecosystem of smart apps.

[jakedeez]

Not to be rude here, but in what way are you qualified to make these recommendations?  What credentials do you offer?  What type of due diligence are you preforming?  If you have buy/strong by ratings, do you have price targets?  Are you using discounted cash flow valuations?  Earnings projections?  I mean, like I said, I don't mean any disrespect, but, are you just calling yourself a ratings agency because there isn't one?

[damiano]

I would have to disagree with AsicMiner..

They are #1 in my book...just wait for the new chips to arrive

[Herp]

Not to be rude here, but in what way are you qualified to make these recommendations?  What credentials do you offer?  What type of due diligence are you preforming?  If you have buy/strong by ratings, do you have price targets?  Are you using discounted cash flow valuations?  Earnings projections?  I mean, like I said, I don't mean any disrespect, but, are you just calling yourself a ratings agency because there isn't one?

I've been a private investor for the past 10 years, investing in several public and privately listed companies. Bitcoin and bitcoin related investments caught my eye for the past two years or so.

I like to look at companies from many different angles. To me management is most important aspect, as it is something that can make or break a company. In this Bitcoin space, getting accurate numbers depends very much on management being honest, because if you don't have that, numbers they feed you are totally meaningless. That being said, many publicly listed companies are no strangers to cooking the books. Transparency is very important ingredient, so I only look at those cryptos/stocks that provide highest level of transparency.

I don't believe in price targets. No analyst ever gets those right and if they do it's very often pure luck.

Regarding valuation, I'm not a fan of predetermined models. I like to look at each investment on a case by case basis because a plethora of various factors come into play. You can't apply value investing rules, for example, when it comes to tech businesses, especially in this crypto space. Warren Buffett, for example, won't touch a company in this space using Graham's approach. Nothing in this space trades below book value and not many companies or cryptos here have PE ratios and such because many don't even generate any revenue, so you can only try and come up with a forward PE ratio, though this also involves certain degree of foresight and seeing into the future, which doesn't really work except on paper. I think it's naive to think you can try and come up with a forward PE when it comes to this crypto space, so highly volatile where things move so fast. It's for good reason some say 6 months in this space is like 10 years. Things are moving very fast. Guess best you can do is to keep a close eye on the investments and try to constantly re-evaluate. Even if you can try and setup or apply some sort of valuation model on a crypto stock, it's whole different story with a cryptocurrency that doesn't have any earnings, doesn't have any quarterly reports and so on.  Goldman put out a report on Bitcoin recently, but it discounted many potential growth areas and they probably tried to stay conservative not to look like dumb-asses. http://www.scribd.com/doc/212058352/Bit-Coin Ridicule is what analysts fear the most, which is why most of their assessments are pretty worthless in general. They'll rather be wrong with the crowd than be right and alone.

This is why it's pretty pointless to try and attempt that in such paradigm shift sector. No one would have taken seriously a "realistic" forward PE projection on say Ford company back in the days when Ford himself was promising the car would replace the horse. For example, I could use Trace Mayer's argument about potential Bitcoin price target, like "if 1% of any Chinese person would put $20 into Bitcoin it would move the price about 10k/coin" or "if 1% of all the money held in offshore tax heaven accounts came into Bitcoin, it would mean a price of $2.8mil/Bitcoin". No analyst would risk putting such crazy price targets because of fear of ridicule, though they are realistic targets.

I'm thinking about writing some reports on few stocks and cryptos to explain my rationale. That could be interesting and might make more sense than trying to put price targets and use standard measurements.

[Herp]

I would have to disagree with AsicMiner..

They are #1 in my book...just wait for the new chips to arrive

I have looked at AsicMiner. I know this stock has many fans but it's operated by an anonymous guy nicknamed Friedcat. From what I could dig up, his operation is based in Hong Kong, but the fact he offers close to zero transparency is big no no in my book. He could really flip the switch on the whole thing and that would be the end of it. Not saying he would but he could easily do that. The risk/reward seems way too high.

BuyAHash, on the other hand, to draw a comparison, has a guy with real name behind it, running a facility everyone can go visit. He constantly posts updates, pictures and offers financial data on sales, discloses future plans, presents clear road-map and puts certain key decisions to a vote. He's also available on a daily basis to answer investor queries. 

[jakedeez]

Not to be rude here, but in what way are you qualified to make these recommendations?  What credentials do you offer?  What type of due diligence are you preforming?  If you have buy/strong by ratings, do you have price targets?  Are you using discounted cash flow valuations?  Earnings projections?  I mean, like I said, I don't mean any disrespect, but, are you just calling yourself a ratings agency because there isn't one?

I've been a private investor for the past 10 years, investing in several public and privately listed companies. Bitcoin and bitcoin related investments caught my eye for the past two years or so.

I like to look at companies from many different angles. To me management is most important aspect, as it is something that can make or break a company. In this Bitcoin space, getting accurate numbers depends very much on management being honest, because if you don't have that, numbers they feed you are totally meaningless. That being said, many publicly listed companies are no strangers to cooking the books. Transparency is very important ingredient, so I only look at those cryptos/stocks that provide highest level of transparency.

I don't believe in price targets. No analyst ever gets those right and if they do it's very often pure luck.

Regarding valuation, I'm not a fan of predetermined models. I like to look at each investment on a case by case basis because a plethora of various factors come into play. You can't apply value investing rules, for example, when it comes to tech businesses, especially in this crypto space. Warren Buffett, for example, won't touch a company in this space using Graham's approach. Nothing in this space trades below book value and not many companies or cryptos here have PE ratios and such because many don't even generate any revenue, so you can only try and come up with a forward PE ratio, though this also involves certain degree of foresight and seeing into the future, which doesn't really work except on paper. I think it's naive to think you can try and come up with a forward PE when it comes to this crypto space, so highly volatile where things move so fast. It's for good reason some say 6 months in this space is like 10 years. Things are moving very fast. Guess best you can do is to keep a close eye on the investments and try to constantly re-evaluate. Even if you can try and setup or apply some sort of valuation model on a crypto stock, it's whole different story with a cryptocurrency that doesn't have any earnings, doesn't have any quarterly reports and so on.  Goldman put out a report on Bitcoin recently, but it discounted many potential growth areas and they probably tried to stay conservative not to look like dumb-asses. http://www.scribd.com/doc/212058352/Bit-Coin Ridicule is what analysts fear the most, which is why most of their assessments are pretty worthless in general. They'll rather be wrong with the crowd than be right and alone.

This is why it's pretty pointless to try and attempt that in such paradigm shift sector. No one would have taken seriously a "realistic" forward PE projection on say Ford company back in the days when Ford himself was promising the car would replace the horse. For example, I could use Trace Mayer's argument about potential Bitcoin price target, like "if 1% of any Chinese person would put $20 into Bitcoin it would move the price about 10k/coin" or "if 1% of all the money held in offshore heaven tax accounts came into Bitcoin, it would mean a price of $2.8mil/Bitcoin". No analyst would risk putting such crazy price targets because of fear of ridicule, though they are realistic targets.

I'm thinking about writing some reports on few stocks and cryptos to explain my rationale. That could be interesting and might make more sense than trying to put price targets and use standard measurements.

Interesting and frankly more of an explanation then I was expecting.  I would be careful with the term "ratings agency" but, if you're not seeking compensation for the investment advice I suppose you are not really exposing yourself.  I am not sure if it's possible to really offer the kind of investment advice that is given at larger wall street firms and rating agencies... even if they don't get it right very often, which clearly they don't, they do at least have a frame work within which they operate.  Traditional valuation metrics clearly can't apply to digital currencies, as, other then XRP and NMC they don't have utility.  I would say the best way to offer "traditional" advice would be to base it on technicals, but, then again, that's all a perception game too.

Good luck to you sir, this is, in my opinion a bit of a disjointed effort, but a valiant one none the less.  If I may be so bold as to suggest, and you are of course under no obligation, but, it might lend more credence to you recommendations if you disclosed what positions you hold. 

I look forward to following your thread.

[torot]

Destroying/burning BTC, a very finite resource, does seem like a nutty idea. I am sad so many people fell for it.
What do you think of the Ethereum project if I may ask? Thanks!

[Herp]

Destroying/burning BTC, a very finite resource, does seem like a nutty idea. I am sad so many people fell for it.
What do you think of the Ethereum project if I may ask? Thanks!

I think many people got excited about Ethereum without exactly understanding what's behind it and what the effort involves. The founders behind the project are Vitalik Buterin and Charles Hoskinson.

Vitalik worked for Mastercoin initially and tried to get Mastercoin to adopt his Ethereum idea, which the other members of Mastercoin team didn't agree with: http://blog.mastercoin.org/2014/02/04/should-the-master-protocol-do-scripting/ It would basically open stuff up to big risks and many potential security holes, very similar problems to ones java is now having that could be heavily exploited.

Charles Hoskinson was fired from Protoshares due to some internal disagreements and decided to start/join Ethereum. Protoshares devs also disagreed about using turing complete based on same reasons, that it presents these security issues. Protoshares also put out a video discussing some of Ethereum's features that he sees as questionable http://www.youtube.com/watch?v=XA4O3uOxm5A

[td services]

Nice analysis. I agree with you that traditional analysis seems about as useful as neckties. Markets are chaotic and fractal, so forecasters are wrong at least as often as they are right over the long term. Taleb, Mandelbrot, and Edgar Peters do a good job of explaining why this is case. Conventional analysis doesn't account for extreme events occurring much more frequently than predicted by normal distributions and the central limit theorem. They try to kludge it with ARIMA and GARCH models but these are still not at all accurate.

I do not agree about avoiding projects with anonymous origins. I look at the quality of the ideas and development work first, though having a good pedigree, like Ethereum, can help. I see anonymity on a good project as a strength by reducing potential for attack. Also, backing from highly regarded people is likely to lead to huge interest, resulting in a lot of dilution from the flood of investment, or even cancelling or delay of the pre-sale because of the high profile and legal concerns of the founders.

[Herp]

I do not agree about avoiding projects with anonymous origins. I look at the quality of the ideas and development work first, though having a good pedigree, like Ethereum, can help. I see anonymity on a good project as a strength by reducing potential for attack. Also, backing from highly regarded people is likely to lead to huge interest, resulting in a lot of dilution from the flood of investment, or even cancelling or delay of the pre-sale because of the high profile and legal concerns of the founders.

I don't think anonymity is an issue in some cases, where for example project can take on a life of its own, after being released and you don't have to depend so much on the founder. Such scenario might work in case of a crypto.

 When it comes to a company, however, you take on a pretty huge risk investing, having close to zero degree of visibility, basically flying blind. In such case I don't think taking on this risk is really worth it, especially when you have many alternatives you can choose from that don't carry suck risk. People also have to ask themselves questions like: "What if this anonymous guy dies or gets incapacitated? What then?"  Statistically there is a chance of that happening, a pretty real and significant chance. You want to know there are some safeguards in place and these are hard to have without a degree of transparency. When there's anonymity involved it's hard to check back on the project to see if fundamentals and investment thesis has changed, to be able to decide if said company/stock is still worth holding.

To paraphrase Buffett: if someone would give you a revolver with one bullet in one of the six chambers, telling you there are 5 out of 6 chances for you to make millions by pulling the trigger, would you do it? There's one in a six chances you gonna get screwed and lose everything.

[damiano]

Whats your opinion on BlackCoin?

First multipool failed, but its being picked up where it was left off, additionally I read there is another pool as well.

[Herp]

Whats your opinion on BlackCoin?

First multipool failed, but its being picked up where it was left off, additionally I read there is another pool as well.

Seems you can't mine it anymore http://www.blackcoin.co/mining/

Proof of stake model is interesting as it removes the need for mining, making it more green. It's also truly deflationary as no other fresh coins get dumped on the market. It's one of the reasons I like Mastercoin, the fixed supply, which makes the coin truly deflationary.

This Blackcoin seems pretty close to NXT in terms of what it has to offer. Not sure it has other things going on for it, which would make it stand out. It's not a 2.0 crypto.

[Herp]

Not sure how many people have seen this but it's pure gold. Worth sharing.  


https://twitter.com/relateablefuuu/status/443142501268869120