- Cryptocurrencies that have been abandoned or no longer exist are often referred to as dead coins
- Dead coin trackers consider a project with less than a $1,000 trading volume in three months an abandoned project
- BitCoin Killer, OneCoin, turned out to be a Ponzi scheme that duped users of over $4 billion
The crypto space is growing at a remarkable rate, with new projects launched all the time. As of October 29, CoinMarketCap tracks the data of over 13,300 crypto projects. More than 2,000 of these projects fall into a category known as dead coins.
What Are Dead Coins?
Dead coins refer to cryptocurrencies that have been abandoned and no longer exist. These projects were either used as a scam, ran low on liquidity, or had their developers flee from the project.
The number of dead coins spiked in 2017 when every business thought it was best to launch an initial coin offering (ICO). In 2017 alone, approximately $4.9 billion was raised via ICOs. However, 80% of all 2017 ICOs turned out to be scams.
While there is an astonishing amount of cryptocurrencies that now offer zero value and utility, today, we will be looking at some dead coins that were once popular before their inevitable demise.
Top Dead Coins
OneCoin was a Ponzi scheme promoted as a cryptocurrency by Bulgaria-based offshore company OneCoin Ltd. Launched in 2014, OneCoin was promoted by the self-acclaimed “CryptoQueen,” Ruja Ignatova. From an all-time high of $0.02, OneCoin is now valued at $0.0008661.
OneCoin gained such a following because it was touted as a “Bitcoin Killer.” The project involved using the money from new investors to pay returns to the existing ones. In the end, users lost over $4 billion to the Ponzi scheme.
- Gems (GEM)
Gem Coin (GEM) is one of the more unique scams. The founder alleged that the virtual gem coins (similar to NFTs today) were backed by real gems mined by his company, U.S. Fine Investment Arts, Inc. (USFIA). He also alleged that the virtual gems could be traded on the USFIA platform.
The value of the virtual coins supposedly increased as the company’s gemstone sales increased. In reality, USFIA did not own any gemstone mines. Steve Chen, the mastermind behind the project, was charged with a $147 million scam. From an ATH of $0.06153, GEM now trades at $0.0003183.
- GetGems (GEMZ)
Following the concept of precious stones, in 2015, Daniel Peled launched GetGems. Unlike Gems, GetGems was a social messaging app that allowed people to send and receive Bitcoin.
At its 2015 ICO, GetGems raised $1 million through crowdfunding and direct investment. The project failed to deliver on its promise of invigorating the social media realm. The project lost momentum, and even though it is still operating today, most of its initial objectives have been dropped.
PayCoin, one of the earliest crypto projects, is another respectable dead coin. In 2014, crypto miners Josh Garza and GAW launched PayCoin as an upgrade to Bitcoin’s network. At its height, PayCoin was one of the largest crypto projects, hitting a market cap of $115 million in its first 48 hours.
In order to deliver on promises and hit the market early, PayCoin had a rushed production. This came at the expense of compromised security. The project failed to live up to expectations, dying in the process.
SpaceBIT remains one of the most ambitious crypto projects to date. In 2014, its founders decided on launching nano-satellites into space to make electronic currencies accessible to all the corners of the globe. It ended as a futuristic project without the infrastructure to back its development.
Launched in February 2016, BitConnect is famous for being the biggest crypto Ponzi scheme in history. How big was BitConnect? Shortly after its launch, BitConnect became a top-10 crypto, with more than $2 billion in market cap.
BitConnect was sold to investors as a decentralized digital currency and peer-to-peer protocol that allows people to invest their possessions in a non-government-related currency. The creators of BitConnect were recently charged with defrauding investors of over $2 billion.
On The Flipside
- Regardless of the increasing attention to crypto scams, people continue to fall for them
- The amount lost to crypto scams between Q1 and Q3 of 2021 already exceeds the amount in all of 2020
How Can You Spot a Dead Coin?
With the rapid growth of the crypto industry, the chances of running into a dead coin increase by the day. So, how do you spot a dead coin?
Lack of Funding
While this may not be the perfect way of identifying a dead coin, an inability to attract enough funds to support developments may be the death of a project. Most projects that lack sufficient funding couldn’t offer enough lucrative profit margins for investors to be interested.
Negligible Trading Volumes
The trade volume of a project is a testament to the level of investor interest. In most cases, low trading volumes imply that a project lacks either utility or trader interest. Dead coin trackers consider a project with less than $1,000 in trading volume in three months an abandoned project.
Scams and Joke Projects
With the rise of meme coins, there have been projects launched without a concrete plan or utility offering. These projects are sold to investors with the very common mantra “to the moon.”
Why You Should Care?
While the likes of Dogecoin and Shiba Inu remain the outliers, more than 90% of joke and meme coins fail. They may get the early support of investors looking to cash out big. After it does, a lack of sustainable goals kills the project. An estimated 80% of all 2017 ICOs were scams.