Cryptocurrencies have experienced remarkable growth this year both in terms of valuation and mainstream awareness. The early adopters claim to understand the potential game changing significance of the cryptocurrency ecosystem as they watch their investments multiply in value by the day.

There are a confluence of factors responsible for this very quick surge in value of various cryptocurrencies, and many suggest that the increased interest that Wall Street is showing in cryptocurrencies and their progeny (ICOs, Blockchain, etc.) is a significant factor for the meteoric rise. The thinking goes that greater acceptance and interest by the legacy financial industry -- and particularly in the United States -- is seen as a sign of validity by the mainstream.

Yet, traditional financial gatekeepers are still trying to make sense of a changing and unfamiliar world that the crypto/Blockchain natives are starting to implement through transformative use cases from which to leverage the currencies. Such is the case with London based/Gibraltar incorporated Covesting.io, which is developing a platform for information and intelligence aggregation for the cryptocurrency ecosystem. Much of what the company is doing will sound extremely familiar to financial industry veterans who have relied on this type of information curation for decades.

Covesting's "sizzle" is an innovative platform that allows consumers to mirror the transactions of the cryptocurrency elite. Covesting takes the traditional concept to the next iteration by allowing investors to completely automate the process. "Pick the pro" to follow and the Covesting platform does the rest. The plan is for the platform to track the actual profit/loss performance of the most successful traders, which in theory will emphasize actual numbers and minimize the inevitable hype and shameless self promotion typically associated with Wall Street gurus.

The model sounds great in theory, but there's a potential roadblock. Transparency may be great for the consumers, but not so great for the "experts." To entice experts to spread the wealth, Covesting has built in a system that gives experts a commission. The company refers to the incentives as "success fees" for allowing the Average Joe to copy their trades. 

The success of providing this type of information to the consumer is largely predicated on the quality of experts that the company can attract.

Most of Covesting's promotional efforts are focused on its copy trading platform, but its proprietary potion may be its information aggregation technology. Its white paper states, "We are basically creating Bloomberg for the crypto-market, plus education, plus community."

Covesting is also involved in the creation of a utility token called COV, that has a limited offer of 20 million tokens. Every token is pre-mined, and all unsold tokens will be burned. Moreover, Technically speaking, Covesting will purchase COV tokens systematically on exchanges and "burn" them. "Burning" means taking purchased tokens off the market, the consequence being that the total COV token supply will decrease.

Covesting, like cryptocurrencies at their core, will confront growing pains. There are concerns that it may be understating the difficulty of attracting experts to the platform and the risk of creating income inequality among traders on the platform. In response to such concerns, the company points to the strength of its management team, the proprietary nature of its product and the partnerships with data and news providers that have already been built.

Published on: Dec 9, 2017