You will notice that while many cryptocurrencies have emerged in the past few years many of these have also faded away as investors have shunned them. Why does this happen? According to a trusted site Coinopsy that tracks failures of cryptocurrencies, today there are more than a thousand dead coins, and this is quite a shocking number given that there are about 3000 crypto coins in existence on the bitcoin system.
It becomes important to understand why such crypto projects have failed to take off or get accepted by investors. It is almost similar to the dotcom bubble in the nineties. The truth is that developers have actually not spent enough time making a business-use case for these coins. They have just gone ahead and launched them only to realize that the concept is passé.
It has been seen that crypto coins that have been modeled on previous successful coins have been the first to bite the dust. For instance, Coin X was hailed as the new Bitcoin, but the Bitcoin was already in the market and it still has demand. This is an example of a developer blunder and there are several such mistakes that keep happening. However, there are some things that are expected to have an impact on the future crypto failures:
Arrival of the Big Finance: A decade back when Satoshi Nakamoto came up with the idea of a cryptocurrency Bitcoin, many altcoins followed that were launched by leftfield entrepreneurs. Their main aim was to get traditional banks and financial institutions to their knees by launching a decentralized currency that could not be regulated by anyone. But over time, these bank slayers have slowly been incorporated by the large financial organizations that they had once challenged. So, Wall Street has been actively involved in the crypto actions. Bitcoins can be bought through Paypal conveniently now. For more detials about buying bitocin through Paypal visit https://coincierge.de/bitcoin-kaufen-paypal/. Chances are high that in a few years time, only the big institutions will be able to reap profits from cryptocurrency design. This also means that other crypto coins that have had humble origins will also start to fail as they will lack resources to compete against these powerful institutions.
A Stable Future: In order for crypto coins to be successful, there must be a feeling of trust amongst its users and they should have a definite reason to use it. Investors trust a coin because of the blockchain technology or the decentralized ledger system. So, the market will judge any new coin depending on its use case. Today there are altcoins that offer new ways to sponsor web advertising, but soon the world is going to be one where it will not be enough simply to launch a better Bitcoin. It is important to deliver stable coins that the market will want. These coins are those that can avoid the price volatility which the Bitcoin is famous for. These are designed for encouraging individuals to use crypto coins for their everyday purchases and sales. Examples of stable coins are the Tether and USD Coin and the larger institutions are likely to have the infrastructure and resources to make such crypto coins operational.
Investors have also lost money on many occasions because of Ponzi scams like the One Coin scam which led to losses to the tune of $19.4 billion. Another example is the Bit Connect that was finally discontinued by US authorities allegedly for running Ponzi scams. The Binance exchange has recently been hacked costing investors heavily. Such problems are expected to go on and this will evidently affect future crypto coins.