Crypto Analyst: Over 90% of Small Altcoin Projects Will End Up Losing Everything, 90% Failure
Over 15,00 crypto projects failed in 2018. The projects range from true abandonware to outright scams and include BRIG, a scam by two “brothers,” Jack and Jay Brig, and Titanium, a project that ended in an SEC investigation.
Cryptic Monk, a fundamental focused crypto trader, and analyst has an opinion that over 90% of smaller crypto projects will fail.
Checking the Discords of REKT coins, I'm astonished by just how savagely unaware people are of the kind of risk/reward structure they're getting themselves into when buying crypto.
So I'll talk about that a bit. This could get long, maybe unstructured:
— Cryptic Monk (Big on Idex) (@cryptic_monk) March 18, 2019
This trend had been noticed earlier too. A Chinese report from CAICT, a scientific research institute under the Ministry of Industry and Information Technology, has revealed that 80,000 blockchain projects have been launched worldwide since 2009.
Of those, only 8% are still being maintained, leaving 92% of all projects abandoned by the team. Furthermore, the average lifespan of those projects was just 15 months, a staggeringly fast rate of failure when the current number of ICOs being launched is taken into account.
Crypto Monk dives deeper into the issue. He says:
“Taking a stake in these projects, you are putting up venture capital, behaving like an early stage investor in angel or maybe seed rounds. A highly specialized investment field previously only available to a closed group. You are trying to buy the next facebook at 1M valuation.
Early stage startups fail because the promised tech turns out to be impracticable because they can't find product-market fit because their teams fall apart because they go bankrupt due to mismanagement etc. Very few of them, however, make it big. Failure can be a gradual process or a sudden one, failure can be complete or partial, but assuming that 90% of your investments in smaller crypto projects will result in a complete loss is a pretty realistic starting point.”
Many blockchain projects that pitched a future of decentralization just a year ago are realizing you cannot find mass market success by preaching a philosophy alone.
Open-source projects as an alternative to closed, centralized networks are nothing new. It has been tried before with Diaspora vs Facebook, Mastodon vs Twitter and DuckDuckGo vs Google.
The takeaway from these projects is the same: openness and decentralization only matter to developers. Blockchain applications need to go back to basics and ask the question of who is the user and what is their problem.