A lot of cryptocurrencies have been launched over the past few years. There are approximately 3,000 coins still in existence. Unfortunately, majority of them have gone extinct. Coinopsy, a firm which tracks coin failures, claims there are about 1,085 dead coins at time of writing. Many of these projects fail because most crypto developers spend too little time designing the real-world use case for their tokens only to realize after the launch that their idea is nothing new in the space. Some developers intentionally copy-paste previously successful projects, yet, the previous coin would still be in demand. Several other factors could lead to future crypto failure and some of them are as follows:

After the anonymous Satoshi Nakamoto created the first cryptocurrency, Bitcoin, other smaller teams of developers also launched their altcoins. They had a common mission to develop decentralized units of exchange that were beyond anyone’s control. They were envisioned to bring down the corrupt world of traditional finance and central banks.

Some years afterwards, these supposedly ‘bank killers’ have largely been assimilated by the giant financial institutions they once sought to compete. It’s very likely crypto will enter into a phase where only the big institutions will be able to generate profit from it. Many upcoming coins are likely to fail in the future simply because they aren’t financially sound to compete with the giant players.

Secondly, for a crypto to be successful, it must have a use case and also win the trust of the people. This is the yardstick with which the market judges the stability of a newly launched coin. There are many altcoins in existence offering solutions like funding web advertising and units of exchange in the gaming industry.

However, the market’s attention has shifted towards stablecoins. These stablecoins were mainly designed to avoid volatility of cryptos like bitcoin and the likes. They are usually backed by traditional currencies or precious metals. They offer a stable store of value for crypto traders on exchanges who don’t deal in traditional currencies. It takes considerable financial resources and infrastructure to make such coins, hence likely to favor large institutions.

Furthermore, many investors have lost huge funds through scam in the crypto space. We can recall what happened to Bitconnet exchange users. Investors were promised up to 120% profit per year when they swap their Bitcoin for Bitconnect coins which would be lent out. Authorities came in and closed the exchange abruptly after receiving series of ponzi accusations. This caused a massive drop in the price of Bitconnect coins leading to massive loses.

Another problem is hackers raiding exchanges. An infamous example is the recent Binance exchange hack, costing investors huge sums of money.

The crypto world is a toxic combination of unregulated, poorly understood, and anonymous technology. If all these problems continue to exist in the crypto space, the probability of cryptocurrencies dying is high.

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