Thousands of cryptocurrency projects are already dead | Tech News
Two sites that are actively cataloging failed crypto projects, Coinopsy and DeadCoins, have found that over a 1,000 projects have failed so far in 2018. The projects range from true abandonware to outright scams and include BRIG, a scam by two “brothers,” Jack and Jay Brig, and Titanium, a project that ended in an SEC investigation.
Obviously any new set of institutions must create their own sets of rules and that is exactly what is happening in the blockchain world. But when faced with the potential for massive token fundraising, bigger problems arise. While everyone expects startups to fail, the sheer amount of cash flooding these projects is a big problem. When a startup has too much fuel too quickly the resulting conflagration ends up consuming both the company and the founders and there is little help for the investors.
These conflagrations happen everywhere are a global phenomenon. ICOs raised $1 billion in 2017 with 297 questionable startups in the mix.
There are dubious organizations dedicated to “repairing” broken ICOs including CoinJanitor from Cape Town but the fly-by-night nature of many of these organizations does not bode well for the industry.
ICO-funded startups currently use multi-level marketing tactics to build their business. Instead they should take a page from the Kickstarter and Indiegogo framework. These crowd-funding platforms have made trust an art. By creating collateral that defines the team, the project, the risks, and the future of the idea you can easily build businesses even without much funding. Unfortunately, the lock ups and pricing scams the current ICO market uses to incite greed rather than rational thinking are hurting the industry more than helping.
The bottom line? Invest only what you can afford to lose and expect any token you invest in to fail. Ultimately, the best you can hope for is to be pleasantly surprised when it doesn’t. Otherwise, you’re in for a world of disappointment.