Dying cryptocurrency projects have opposite effect on the good ones in the blockchain

We all know that there are a lot of cryptocurrency projects which don't bring any value to the table and have a scheme like pump and dump behind them. This is one factor that contributes to the market volatility and while it might have some positive aspects (concurrency), most it impacts negatively over the blockchain industry.

In our help to distinguish the good from the bad crypto currency, comes specialized sites in cataloging the failed cryptocurrency attempts - Coinopsy and DeadCoins. Retrospecting year 2018 their conclusion was that over 1 000 projects with cryptos have fallen, while the reasoning behind that was somewhere from scams to abandonment. To give some out of the blue examples - BRIG, a two-brothers (Jack and Jay Brig) scam and Titanium which got ended with a SEC investigation.

The blockchain world allowed the new developments, communities and financial companies to create their own new sets of rules and attract through their conduct new investors, partners or participants. The bump those all need in order to raise is ensured through token releases, but that implies also some big risks and problems. First, there is a market expectation that most startup will fail and that implies little involvement from financial institutes in the incipient phases of the projects.

It remains for the people of the world to spot the good opportunities and get on board from the beginning. But when these both parties align themselves and contribute to a new crypto startup, that will imply a too faster infusion of capital which tends to result in consuming both the company and the founders as some might not be ready for the required intake. Fast capital expects fast development and return of investment from the investors point of view, but the founders cannot overachieve that in shorter time than the economy permits.

These conflagrations are encountered more and more and start beginning a global phenomenon, which negatively impacts the trust in this industry. Scam and dead ICOs reached up to $1 billion in 2017 with around 300 startups in the mix and their fall scares big part of the investors out there. This is truly bad at its core and the long term effects are acting like a blockage for the needed market development. Still, there are some other companies that saw this and are trying to patch some of these broken ICOs - CoinJanitor from Cape Town, but is as much as they can do in order to stop the rolling effect created in the market.

Startups funded through ICOs use multi-level marketing strategies to raise up funds and gather capital. This doesn't inspire trust and is hard for the little investor to know what to choose from all the sea of these startups. Moving to a fund raising which have trust at its core would be the answer to falling projects and platforms like Kickstarter and Indiegogo
could be right models for moving forward.

By embedding collateral terms in the given capital, the project, the risks and the materialization of the proposed ideas will bring responsibilities from both investors and founders and a better management of the entire process. But, that is for viable and long term ideas, while the ICOs are faster and easier for those scamming or in need of quick capital which base their growth on the greed of the investors. While there might be some short term benefits, the long term ones tend to destabilize this industry. Of course, there are proven successful stories and startup out there, but even those are affected by the other negative ones while there are ways that these could be avoided. Maybe also through some new concepts like Smart ICOs or Collateral ICOs which will need to have some constraints or guaranties behind the easy and quick investment model.

The conclusion of all these results?
As always we should invest what we are prepared to lose and expect that the chosen token might fail. Hope for the better, but keep your feet on the ground in order to cope with disappointment when something bad happens. Of course, leave something for the pleasantly surprises out there when projects materialize themselves, but don't get driven only by successful stories.