22 Oct 2019
It’s not a secret that scam projects and the so-called dead coins are present in the crypto industry in vast numbers. The study carried out by several crypto analytical outlets, revealed truly stunning results that more than 60% of all blockchain projects, included in the Top 100 ranks on all major ranking websites, have failed on their promises to deliver working products and put their ideas into reality. Therefore, less than half of the most popular cryptocurrencies offer real products and real value to the users and industries.
These stats, obviously, contradict the general optimism about the nearing mass adoption of cryptocurrencies and their inevitable incorporation into the many aspects of social and economic lives. However, apart from acknowledging the problem, it is also essential to understand the underlying reason for such a mass failure of digital tokens.
The most common reason comes from the unwillingness of investors to support a failing blockchain project anymore. They can do this by either taking out the staked tokens, selling their holding at a market price, or ceasing any trading activities that involve the doomed tokens. Naturally, this would take out the energy of any project, regardless of its fundamentals or the progress in roadmap implementation. Shockingly, the study reveals that 63.1% of blockchain project actually fall into that category to a certain degree.
The most significant cause of such an investor abandonment lies in the inability of teams to adhere to the previously declared promises regarding product development or the time frame for the market roll-out.
At the time of its inception, the entire cryptocurrency industry had been considered as one big scam, a bubble that should burst into the faces of naive investors. The time has proven these skeptics wrong, but there is no denying the fact that scammy projects remain a scourge of the blockchain community. Various Ponzi schemes, and other criminal methods, keep on severely hampering the reputation of the global blockchain community and leave the gullible investors high and dry.
The overwhelming majority of these scams emerged in 2017, at the peak of the “crypto craze” which had encompassed the entire world, when everyone seemed to have wanted to ride the waves of the strongest, and the most prolonged bull market to date. 2017 was the most yielding year for crypto scams, which appeared like mushrooms after a summer rain. According to the stats, the number of shady projects had increased by 500% that year, and now, the unlucky, or unwise, investors are forced to suffer the consequences.
However, nearly 7% of dead blockchain projects actually haven’t failed because of the foul intentions of their founders. As much as 3.6 % had simply realized that they wouldn’t be able to develop a fully-fledged product or service within the predesignated deadlines, and decided just to let things slide, postponing the release of updates on the basis of flimsy reasons.
The other 3.2% includes probably the most “innocent” ones of the bunch, the joke startups like BagCoin and BieberCoin, which didn’t even try to conceal their sarcastic nature.
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