Over 1000 Cryptos Are Dead
Token projects and forked digital currencies which have been abandoned, shut down, and scammed might just be greater than the ones that have lasted.
Coinopsy and Dead Coins have collected data that shows two digital currency tracking websites, an estimated 1,000 cryptocurrencies projects that are lacking any progress or future activity in their protocol collectively raised billions of dollars worth of BTC and ETH.
While hundreds of token issuers get scrutinized by global law enforcement to determine their legitimacy, amateur investors continue to make million dollar investments in those coins whose names are enough to raise suspicion– including CryptoMeth, OreoCoin, and Snowballs.
Reasons for closure include stuff like exit scams, website closure, and incomplete code to intentional pump and dump, faulty wallets and sudden death of project developers.
Aaron Brown, a business markets author for Bloomberg, said that: “There has obviously been significant fraud and hype in the ICO market. I have seen 80 percent of ICOs were frauds, and 10 percent lacked substance and failed shortly after raising money. Most of the remaining 10 percent will probably fail as well.”
Satis Group concluded in a May report that fraudulent ICOs raised over $1 billion in 2017, with over 271 companies showing questionable operations, plagiarized white papers, and impersonated team members. Additional research by the group indicated only a paltry 8 percent of cryptocurrency projects make it to reputable exchanges after their ICO.
Startups might be infamous for their high failure rate, but 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 have been many projects tried, but there aren’t many users of Blockchain protocols beyond speculators and traders.”
Some companies try to fix the situation. South Africa-based CoinJanitor looks to swap the tokens of projects that have been abandoned to its currency while trying to fix the code issues –so long as the project’s market cap is lesser than $50,000.