Research: Over 1,000 Cryptocurrencies are “Dead Projects”
Whilst not all cryptocurrencies and tokens are built to last, the math shows token projects and forked digital currencies abandoned, shut down, and scammed are far higher than 1 might think.
As per information collated by Coinopsy and Dead Coins, two digital currency tracking sites, an estimated 1,000 cryptocurrencies projects are lacking any development or future activity in their protocol, and have, amongst themselves, raised billions of dollars worth of BTC and ETH.
While global law enforcement may possibly have scrutinized hundreds of token issuers to figure out their legitimacy, amateur investors were largely oblivious to basic due diligence and produced a million dollar investments in coins&rsquo whose names are adequate to ring alarm bells – which includes CryptoMeth, OreoCoin, and Snowballs.
Reasons for closure range from the widespread exits scams, website closure, and abandoned code to deliberate pump and dump, malfunctioning wallets and alleged death of project developers.
Aaron Brown, a organization markets author for Bloomberg, lent his insight:
&ldquoThere has clearly been substantial fraud and hype in the ICO industry. I have seen 80 % of ICOs had been frauds, and 10 % lacked substance and failed shortly after raising income. Most of the remaining 10 % will most likely fail as nicely.&rdquo
ICO Fraud Tops a Billion Dollars
As reported by CCN in Could, study by Satis Group concluded that fraudulent ICOs raised over $1 billion in 2017, with over 271 analyzed organizations rife with questionable operations, plagiarized white papers, and impersonated team members.
Additional analysis by the group indicated only a paltry 8 % of cryptocurrency projects make it to reputable exchanges right after their ICO.
Whilst startups are infamous for their high failure rate, blockchain firms have performed worse than the industry average for failed investments. An October 2017 report by CB Insights indicated only 28 percent of blockchain technologies startups could proceed to the second round of seed funding, compared to 46 percent of traditional businesses.
“I don&rsquot think we found the killer app however,” stated Arieh Levi, an analyst at CB Insights. “It just appears like there&rsquos been a lot of projects tried, but there aren&rsquot many users of blockchain protocols beyond speculators and traders.”
Even so, in these dire conditions, a startup aims to establish its mark. South Africa-primarily based CoinJanitor seeks to swap the tokens of abandoned projects to its currency although trying to fix the code concerns – as extended as the project&rsquos market cap is lesser than $50,000.
Featured image from Shutterstock.
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Published at Fri, 29 Jun 2018 13:27:32 +0000