8 Failed Cryptocurrencies and Why They Don't Survive

Every year there are new crypto projects launched. The question is whether they will survive or become another failed cryptocurrency like these coins.

A lot of cryptocurrencies have been launched in the past few years. Some of them are very successful and manage to become household names on their own like Bitcoin, Ethereum, Litecoin, and many more. However, there are other coins that were launched and celebrated only to fail and disappear after the public and investors shunned them. Failed cryptocurrencies are nothing new in the world of digital currency. In fact, there are more than 1,085 dead coins as per this writing.

Why Does Cryptocurrency Fail?

There are a lot of reasons that cause cryptocurrencies to fail. Most of them are connected to the public trust towards the products. Here are some of the most common problems behind failed cryptocurrencies.

1. Bad Publicity

Publicity is a very important factor to guarantee a coin's future. After all, cryptocurrency is a product that needs to be marketed towards potential consumers. Good publicity would gain trust from potential traders and investors. Otherwise, a cryptocurrency project would struggle to gain public trust. This can lead to failure since no investors would want to risk their funds in an untrustworthy product.

2. Scams

Another reason why a cryptocurrency failed is scams. A cryptocurrency scam actually happens more often than you think. There is a lot of type of cryptocurrency scams lurking around the corner. One of the most common scams is a Ponzi scheme posing as new digital coins. This type of scam always promotes their 'products' as crypto coins that can bring consistent revenue for their investors. While in reality, it's highly impossible due to the volatile nature of the digital market.

3. Unclear Future

The future of a crypto product is very important for investors. They want to make sure that the cryptocurrencies they invest in have a clear progression path. Most of them invest quite a lot of money,  so they don't want to lose it because the developers don't have a clear plan for the crypto product in the future.

4. Problematic Developers

Who developed the cryptocurrency is also an important factor most traders and investors consider when choosing a digital currency. For example, if the developers are known to face problems that might affect the coin's future, it's unlikely that investors would stake their funds in the project. This sentiment might lead to the failure of the crypto project.

Cryptocurrencies That Have Failed

Among many failed cryptocurrencies, here are the 8 most memorable failures. Some of them disappeared due to fraud, some started out with a promising future and huge publicity but vanished later on.

1. OneCoin (ONE)

OneCoin was promoted as a cryptocurrency from a Bulgarian-based company, OneCoin Ltd. It was founded by Ruja Ignatova, a self-named 'Crypto Queen', along with Sebastian Greenwood. However, it occurred that OneCoin was actually a Ponzi scheme. Their main business is selling educational material for trading. Members can buy the educational content starting from 100 euros to 118,000 euros. The developers said that each package include a token to mine OneCoins.

On March 1st, 2016, OneCoin issued an internal notice that the market will be closed for two weeks due to maintenance issues, only to be open again on March 15th the same year without any noticeable changes. Eventually, in January 2017, the exchange was shut down without notice. US prosecutors alleged the scheme brought in $4 billion worldwide. Meanwhile, Ruja Ignatova disappeared near the time a warrant was filed for her arrest. This scam is one of the biggest failed cryptocurrencies in history.

2. GetGems (GEMZ)

GetGems is one of the most memorable failed cryptocurrencies that was launched back in 2015. Basically, it's a mobile messaging app with a built-in Bitcoin-based incentivization token. This project is guaranteed to strengthen the online media domain. The main idea was that users could earn more GEMZ by inviting their friends to sign up.

In the beginning, this project was very successful; it managed to raise roughly $1 million through crowdfunding and direct investment. Despite the hype, it neglected to build up any speed. This was one of the major reasons why GEMZ failed as a cryptocurrency. In May 2017, the price hit $0.0579 before it stopped trading completely.

3. SpaceBIT

SpeceBIT was one of the most ambitious digital currencies that ever existed. The developer determined to make electronic monetary forms available to everyone down to the edges of the globe. In order to do that, they launched a nano-satellite that was supposed to act as the supportive infrastructure for their cryptocurrency. Despite all these aggressive projects, nothing ever emerged from it. Eventually, this crypto simply stopped streaming after a while and become another failed cryptocurrency.

4. PayCoin

When it first appeared, PayCoin was anticipated to be one of the most successful cryptocurrencies. This project was launched by respectable miners, Josh Garza and GAW. Within a short time, it proves to have a sustainable status in terms of usage. So, how come it became a failed cryptocurrency? Apparently, the cryptocurrency was rushed in an attempt to market it to users and compromised its security. Despite having one of the largest market caps at its height, the currency couldn't succeed when the founders failed to deliver its promises.

See also: Top 10 Cryptocurrencies with the Biggest Market Cap Today

5. Ethereum DAO

Ethereum DAO was one of the most legendary failures in cryptocurrency. People had such great expectations for this project. It was launched in April 2016 through one of the most successful crowdfunding campaigns in history. DAO managed to raise more than $150 million from 11,000+ investors within three weeks. This coin aimed to provide a new decentralized business model for organizing both commercial and non-profit enterprises. It was initiated on the Ethereum blockchain and had no conventional management.

So, how does a promising project become one of the most memorable failed cryptocurrencies? Apparently, some onlookers realized the vulnerability in the DAO's code. In fact, computer scientists were concerned that a bug in the DAO's wallet smart contract would allow them to be drained. Their concern became a nightmare when an attacker managed to exploit the vulnerability and steal the funds from DAO. In the end, they lost around $50 million.

6. BitConnect (BCC)

BitConnect was launched in 2016 and hit its highest market cap in December 2017. At the time, it was considered as one of CoinMarketCap's best-performing coins that year. It aggressively promised returns of 0.5% to 1% per day, along with other incentives. Sounds familiar? That's because BitConnect turned out to be another pyramid scheme posing as a cryptocurrency. In a matter of a few months, BitConnect became a failed cryptocurrency. The high returns it paid were funded by new investors, so when the system was no longer sustainable, the platform collapsed and people lost everything.

7. BoringCoin (ZZZ)

BoringCoin was a joke coin that was launched in 2014 and was built on a standalone blockchain. This coin promised no drama, no pump and dumps, and of course, no hype. Just like any other joke coin, ZZZ did not survive the year and become another failed cryptocurrency. In fact, the project was listed as a dead coin by Coinopsy because it didn't serve any purposes.

After Thought

Investing in new coins can be promising as their price is usually still affordable and not as high as Bitcoin or Ethereum. If you play it right, new coins might bring you enormous profits. Unfortunately, not all new coins become a household name; some failed and faded away.

To avoid this condition, there are ways to recognize failed cryptocurrencies: The project doesn't have a clear future, there may be some problems within the developer that may affect the future of the project, or it's actually a scam. By paying attention to these factors and learning from failed cryptocurrencies above, hopefully, we can be more careful and insightful when it comes to choosing potential altcoins.