The distribution of ranks from CS:GO Squad in May 2016.

The following was posted to /r/globaloffensive by /u/vitaliy_valve:

"For Competitive, we built a CS:GO-specific competitive ranking system that is significantly different and more complex than Elo. The CS:GO competitive ranking system started with ideas based on Glicko-2 rating model and improved over time to better fit the CS:GO player base. All computations are performed on our matchmaking backend and multiple matchmaking parameters describing scientific set of rating variables of a player are represented to players as a their Skill Group. You should be able to find papers on rating systems involving rating volatility and rating deviations online to get a better idea about why our complex competitive matchmaking parameters cannot be represented as a single numeric value."
― Vitaliy

Disclaimer: The explanations given below pertaining to the CS:GO competitive ranking system are pure speculation based on research data and personal experience.

In layman's terms, a player's rank is assessed according to his / her performance in comparison to various variables. To be honest, nobody actually knows how it works except for the CS:GO developers. We can only infer that Valve is more concerned with placing hats on chickens and controlling a virtual market comprised of pixelated karambits than explaining an artificial rank.

• The outcome of the match. (Win/Loss/Tie)
  
• The ranks of the players on both teams.
  
• Your Score.
  
• Surrendering, abandoning, or being kicked from a match counts as a loss.
  
• The match gets revoked if someone is banned via Overwatch or VAC.
  
• Your rank disappears until your next win if someone you lobbied with is banned.
  
• Your rank expires after 30 days of inactivity until your next win.

The outcome of the game is the biggest factor in whether or not you receive a rank promotion. Any other factors seem to only affect the speed at which your rank changes.

You will be placed into a rank after your first 10 competitive matchmaking wins. After your first 4 wins, you will gain an idea of what your initial rank will be if you look at the ranks of the enemy players. The highest rank you can be placed into is Legendary Eagle Master.

Although winning is the biggest factor into getting promoted to a higher rank, your performance does matter. Most CS:GO players will have a win percentage somewhere near 50%. Once you start winning more than 50% of your games, you will probably receive a rank promotion. You will de_rank vice versa. The ranking system balances teams, especially in a solo queue scenario, in accordance to how it expects each player to perform. You will win more games as your skill level improves, because the ranking system is matching you against players that it expects to make a balanced match.

As a general rule, you will rank up / down in 3-5 win / loss streaks. It is theorized that win you are close to a promotion, the system will match you up against more players of the higher rank. Winning against teams of a collectively higher rank than your team will lead to a faster promotion. Losing against teams of a collectively lower rank will count less towards a promotion. The same works for deranking.

There does appear to be some larger gaps in ranking up to a different tier of ranks. For example, ranking up out of the silver, gold nova, and master guardian ranks is much harder than receiving a promotion from within those rank tiers.

The CS:GO competitive ranking system is fairly accurate. As with all systems, it has its flaws. The one thing I must say is that you should not stress too much over your rank. It is just a set of pixels in a video game. Peace.