Over 1,000 Cryptocurrencies and Bitcoin Forks are “Dead Projects,” Concludes Research
While not all digital tokens and cryptographic forms of money end up as a successful project, recently released statistics indicate hard forked coins, ERC20 tokens, and other cryptocurrencies have either closed down their development, relinquished their efforts, or misled amateur investors.
Data collated by two digital currency tracking websites suggest over 1,000 digital currencies are “dead projects,” implying no scope of future development of their protocol with their prices decided only by market speculation. Dead Coins and Coinopsy, which conducted the research, grouped the projects under distinct reasons – ranging from coordinated pump and dump, investor fraud, faulty wallets, lack of funds, and in one case, developer death.
As stated, the “dead projects” have cumulatively raised over billions of dollars worth of BTC and ETH.
While worldwide law requirement may have examined several token issuers to decide their authenticity, novice investors were generally absent-minded to essential research before making millions of dollars in investments. Humorously, the names of a few coin projects are enough to indicate a potential mishap – such as OreoCoin, Snowballs, and CryptoMeth
Aaron Brown, a business markets author for Bloomberg, stated:
“There has clearly been noteworthy extortion and promotion in the ICO market. I have seen 80 percent of ICOs that were fakes, and 10 percent needed substance and bombed soon after fundraising. A large portion of the rest of the 10 percent will presumably flop too.”
The Fake, Disappointing Cryptocurrency Startup
As reported by BTCManager in May 2018, an investigation by Satis Group concluded that false ICOs raised over $1 billion up in 2017, and more than 271 coin organizations overflowed with sketchy activities, plagiarized white papers, and fake team members
Interestingly, only eight percent of all ICOs made it to an exchange for trading. The rest shut shop after the fundraising stage or were listed on questionable exchanges.
While startups are infamous for their high failure rate, blockchain businesses have performed worse than the market average for failed investments. An October 2017 report by CB Insights indicated only 28 percent of blockchain technology startups could proceed to the second round of seed funding, compared to 46 percent of traditional businesses.
“I don’t think we found the killer app yet,” said Arieh Levi, an analyst at CB Insights. “It just seems like there’s been many projects tried, but there aren’t many users of blockchain protocols beyond speculators and traders.”
However, in these dire situations, a startup aims to establish its mark. South Africa-based CoinJanitor seeks to swap the tokens of abandoned projects to its currency while trying to fix the code issues – as long as the project’s market cap is lesser than $50,000.