Cryptocurrency has been a topic on everybody's lips since its inception over a decade ago. There are many enthusiasts of the phenomenon, but there are also those who believe that CC is about to die once and for all. Nonetheless, thousands of different types of cryptocurrencies are available on the market today. There are also many ways developed in which you can use them, for example, payments, gambling at BitCasino or just as an investment. But the question remains, what makes a cryptocurrency succeed or fail? Let's learn from the mistakes some CC creators made.
The dark secret of cryptocurrencies
We all know the success story of Bitcoin, which is the most powerful and most developed CC out there. However, not all cryptocurrencies have a history that is this happy, in actuality, most of them are a failure. Some fail before even raising funds, even more, die after fundraising. There is also something called the "semi-failed" category. The CC's that fall under this category are created companies that don't seem to be active online or are already doomed to fail.
All of those numbers combined give CC a massive rate of failure of around 50%. Half of the cryptocurrencies are considered dead and 7 out of the top ten are expected to struggle significantly in the coming year. Even Bitcoin experienced a massive crash in 2018, suggesting it is not entirely secured. Another dark secret of CC is how much theft it attracts, with over nine million being stolen every day. This is because it is much easier to hack into a cryptocurrency "bank" than the traditional banking funds. As you know now, there is more to the cryptocurrency market than what meets the eye.
The biggest failures
Some losses are more significant than the others and, most of all, unexpected. Cryptocurrency is no different, and even though it doesn't have a long history, there are already virtual coins that failed hard. Here are the top five CC fails.
- DAO - Decentralized Autonomous Organization introduced by a company called Ethereum, with people liking the idea of currency not being controlled by any individual or company. It was supposed to be the most prominent cryptocurrency of all time, and it was doing pretty well on the market. However, just two months after the launch, hackers discovered a hole in its security and stole 50 million $ out of a 168 that was up for grabs. When the news about the theft broke the Internet, DAO lost almost everything.
- Paycoin - Over five years after the launch of Paycoin, it is still hard to tell whether it was a scam or a failure. At the time of introduction, Paycoin was predicted to challenge Bitcoin for the first place in the CC ranks. After it crashed, because of the currency changed into an altcoin clone, the famous cryptocurrency investor, who backed the claims of Paycoin, had to flee the country and was eventually imprisoned.
- GEMS - GetGems is a social platform that pays its members for watching ads with CC. It was supposed to change the way social media works. But it didn't work out. Once their first year of trading was over, and without reaching any financial goals, GetGems was announced a failure. It is still operating but with little to no success. It seems like at the moment; it is only working pretty decent in Uzbekistan, which is far from changing global social media.
- WaltonChain - This is a cryptocurrency that was doing pretty well, until Valentine's day od 2018, when they organized a huge giveaway. They held the "love marketing campaign" to raise brand awareness, and they did, but for all the wrong reasons. But the contest was rigged and exposed shortly after, costing WaltonChain a 30% drop in their value that they never recovered from.
- Dogecoin - A CC that started as a joke, and turned into a serious cryptocurrency, but not for long. Dogecoin was doing fantastic, its users even managed to send the Jamaican bobsled team to the 2014 Winter Olympics. It all went left for DOGE when its founder, Ryan Kennedy, aka Alex Green, disappeared with all the money.
Will the cryptocurrency revolution ever happen?
Even though there are many scams, thefts, and failures among cryptocurrencies, they most probably won't disappear from the financial market anytime soon. Especially now, when Facebook is considering the introduction of its own cryptocurrency. The financial experts predict that as long as the cryptocurrency market is not controlled or backed by governments, there won't be any currency revolutions happening anytime soon, and the market might decline. It looks like traditional currencies still have more power for now, but who knows what the future of CC is?
Thousands of cryptocurrencies failed over time, just like many financial institutions didn't deliver what was promised. What we should do is to learn from others' mistakes and try to avoid those CCs' that are not secure enough.