What causes the death of cryptocurrency projects?
Because Halloween is approaching, this seems like an appropriate time to observe the cemetery of the cryptocurrency industry. Even in one as young as the cryptocurrency industry is, a lot of projects have already faced death, and sites like Coinopsy and DeadCoins are providing autopsy reports from collective sources.
Recently, Coinopsy data was investigated to learn more about the type of projects that fail, and some interesting patterns were found.
Coinopsy has over 700 entries that extend up to eight years in the past, which makes this platform one of the best windows available to the cemetery of cryptocurrency projects. That said, Coinopsy’s data is incomplete and comes from collective sources, so the information probably has some inaccuracies.
This site also does not provide your information in formats available for download or graphic formats, so to carry out this analysis the information had to be collected manually.
What kills cryptocurrency projects?
The information presented in Coinopsy includes various causes of death. The most common cause of death among these was death by default, which means that investors simply stopped trading the token, so that the volume of trade decreased to zero, or close. According to the analysis, 63.1% of cryptocurrency projects died from this cause.
The next largest group of dead projects were the alleged scams. 29.9% of the projects presented in Coinopsy fall into this category. Most of these alleged scams appeared during 2017, probably inspired by the bull market. In this data set, it was observed that in contrast to previous years, the number of scams increased more than five times in 2017.
Surprisingly, the data also includes the names of the founders of some projects. Two of these founders, a Bitcointalk user named Cruck and someone named Daniel Mendoza, appear related to three different dead projects that were allegedly scams (however, remember that this information is purged by suggestions from collective sources and may not be accurate) .
Other causes of cryptocurrency deaths include the failure or stifling of some ICOs (3.6%) and obvious “joke” projects (3.2%) such as AnalCoin, BagCoin, and BieberCoin.
It is impossible to determine precisely how many cryptocurrency projects have died, and the answer depends to some extent on how “death” is defined. Coinopsy currently includes around 705 dead coins, DeadCoins includes 1,779, and CoinMarketCap more than 1,000 projects with a daily trade volume of less than USD 1,000, which certainly places them in this category.
These three sources of information have overlaps, of course, but there are probably a few dead projects that are not on any of these lists. It is likely that failed international projects marketed primarily in a language other than English are particularly out of these samples, as the three sites mentioned above serve primarily an English-speaking audience.
One of the most interesting things about Coinopsy information is that it has the “start” and “end” date of almost all projects, which allows us a more complete view of how long each project survived.
Not surprisingly, “abandoned” projects, for example, those that really took off but ultimately lost interest from investors, tend to last longer, with an average life span of 1.7 years. Failed or suffocated ICOs had a similar duration, with a half-life of 1.6 years. Joke projects, apparently, are only funny in an average of 1.4 years.
The scam projects had the shortest half-life of the entire group, lasting only about a year.
Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and / or services. This press release is for informational purposes information does not constitute investment advice or an offer to invest.