First, there was Bitcoin; then, a few other projects joined the fray, such as Ethereum and Litecoin. However, through 2017, the cryptocurrency ecosystem saw an absolute explosion of projects emerge from every nook and niche.
Today, we still see projects bloom on regular occasions, but we have also started witnessing the death of cryptocurrencies in their droves. There are, of course, several reasons why a cryptocurrency project may die, some more perturbing than others.
A look into data from Coinopsy, through Longhash, has identified the top reason why projects are killed off. Not surprisingly, the most common was death by abandonment, meaning that investors have simply stopped trading the token, and its volume has fallen to zero (or near zero). 63.1% of projects met this fate.
These types of projects are often ICOs that have a very pump-and-dump nature. Through the excitement of 2017, it was incredibly simple to make millions through an ICO but much harder to make a project that stuck around with those funds.
Following project abandonment, unfortunately, scams are the next biggest killers of cryptocurrency projects. As many as 30 percent of all dead coins are alleged scams. Again, these scams promulgated primarily out of 2017. You can see the effect of 2017 on these two major killers below.
There are a few other killers of coins, but they are hardly as imposing or threatening. Other sources of crypto death include ICOs failing or fizzling (3.6%) and obvious “joke” projects (3.2%).
More interesting facts and figures that were dragged up include the number of dead projects out there – of which there are highly varied reports – as well as an estimate on how long doomed projects last.
Cointopsy currently lists 705, DeadCoins lists 1,779, and CoinMarketCap lists over 1,000 projects with less than USD $1,000 per day in trading volume, which certainly puts them in the category of “dying” if not “outright dead.”
What is a little concerning is that these projects that have ended up dead have lasted for well over a year. Abandoned projects tended to last the longest, with an average lifespan of 1.7 years. Failed and fizzled ICOs lasted nearly as long, with a 1.6 year average lifespan. Joke projects, apparently, only stay funny for an average of 1.4 years.