The future of cryptocurrencies | ICAEW Economia

Opinion


27 Nov 2019 04:45pm

More than 1,000 cryptocurrencies have already failed – here’s what will affect successes in future


Many cryptocurrencies have been launched in the past few years, often to great fanfare and celebration, only to fade and fail as the public and investors shun them. According to Coinopsy, which tracks such failures, there are some 1,085 dead coins at the time of writing.

That’s a substantial number, even next to the approximately 3,000 still in existence, and senior industry figures expect many of those to fail, too.
Why do so many of these projects unravel? You expect many initiatives to come and go in a fledgling market, of course – the 1990s dotcom bubble is the perfect example. But at the same time, cryptocurrency developers have traditionally spent too little time designing the business-use case for their coins and tokens, then only realising after the launch that their idea is yesterday’s news.

Time and again, we see launches that copy a previously successful coin – “coin x is the new Bitcoin”, for example. Yet the market already has Bitcoin, and it continues to be in demand – as evidenced by the 18 millionth Bitcoin being mined only last month. We tend to overlook this problem with developers, even while we rightly criticise regulators for not being able to keep up with the fast evolution of the crypto market – despite efforts such as Howey Coin by US regulator the SEC, which was a fake new coin offering designed to teach investors about the risks of putting money into crypto.
No doubt these kinds of…

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