Factors that led to the failure of digital currencies
Bitcoin is the first cryptocurrency founded by Satoshi Nakamoto. It became operational on 3rd January 2009. Since then it has become a very preferred choice among the investors. The dominant crypto coin is famous in the global economy. But now it has become a decades-old cryptocurrency, so it is not a buzz now. And it is all because of the emergence and success of alternate digital currencies or altcoins. Dogecoin is the perfect example. It began as a crypto meme joke but rose to success with the series of tweets by Tesla CEO and founder Elon Musk.
Other than Bitcoin, many crypto enthusiasts are interested in following the latest Cardano news or ADA price prediction for the coming years, or the cryptocurrencies that guarantee profits. Indeed the crypto space that you have been showing interest in appears very shining but there is also a dark side. Not many cryptocurrencies have got the success that Bitcoin has achieved. They aimed to become the better alternatives to it but tasted failure instead. So what do you think can be the cause of it?
Merely saying that these failed cryptocurrencies could not match up to the success of Bitcoin is not enough. There are other factors involved in it. But let us mention the top cryptocurrency failures of all time in this article.
Digital currencies that failed
Below are those digital currencies that failed to live up to their goal.
PayCoin is one of the failed cryptocurrencies. Before that, it had been distinguished crypto in the crypto space. Launched by GAW and Josh Garza, PayCoin attempted to market itself to the users but lacked security. Despite having the largest market capitalization, this cryptocurrency swept down. It all happened when its founders failed in their promises.
OneCoin is another example of crypto failure. It came around 8 years ago. It became one of the examples of crypto scams. Ruja Ignatova was the founder of it. She called herself ‘CryptoQueen’ and hosted events around the world. She even claimed OneCoin as a ‘Bitcoin Killer’. Many investors became victims of her false claims, ending up getting cheated by her. OneCoin turned into a Ponzi scheme of $4 billion. It used a tactic to fool new investors. The money was paid in return to the existing investors. In 2017, Ruja Ignatova got escaped. Police filed an arrest warrant against her.
Coming on to the next is GetGems. It came in 2014 claiming to revive the social media world. It raised an amount of $111,000 from the ones who backed the project for its growth. But what was expected did not happen. The crypto project could not gain ample momentum. It seemed that the possibilities of its growth were overestimated. GetGems might be running its operations by rewarding users for seeing online advertisements, still, there has been a drop in its early objectives.
BitConnect also joins the list of failed digital currencies brigade. This cryptocurrency emerged in 2016 and became an example of cheating. It made its ATH (all-time high) in 2017 in December becoming one of the top-rated crypto coins on a famous crypto price tracking website. But within a few months, the coin lost its worth.
Along with other incentives, BitConnect made a promising return of 0.5% to 1% each day, but it turned out to be a pyramid scheme, similar to OneCoin. The new investors who funded it with high returns let people lose all after the platform crumbled.
Ethereum’s DAO (the Decentralized Autonomous Organization) failure cannot be left out of this list. And how can it be, since people had expected much about it? But its historic fall came as a shock to them. This crypto project came in 2016 and within a short period boomed in the market. Because of this, people raised hopes about it, expecting that this would top up their dreams.
This crypto project even got millions in investment around $168 million. But unfortunately, all the expectations of people that they put on this crypto project got watershed with its unexpected fall. $50 million is known to have been lost after the attacker’s successful invasion which indicated the end of Ethereum’s DAO.
Factors that led to the failure of cryptocurrencies
There is a number of factors involved in the failure of crypto projects. Have a look at them:
- Not promising security
- Lethargic approach
- Unsure about the progress
- Not able to promote properly
- Developers losing interest and leaving the project mid-way
- Projects turning scams and frauds
- Failing to come up with a perfect business plan
So these are those failed digital currencies that turned out scams. Cryptocurrency might be successful, but there are cases of fallouts of crypto projects that resulted in hefty losses for the people. With failed cryptos, we also mentioned the possible factors that are behind it. Investors are often deceived by scams planned by notorious scammers.
Hence, you need to be very careful, as these risks are possible in the crypto space. Whenever you plan investment on some crypto project, better take expert advice. Investing in smaller amounts will lessen the possibility of big losses. Invest only when you are capable to face loss. Otherwise, stay away. Follow Cardano news today on Cryptoknowmics, and get the price updates of ADA cryptocurrency.