What are Dead Coins?

Dead Coins

The cryptosystem continues to gain more acceptance in the world day by day. Every day we come across news about digital money, NFT, blockchain-based games, and more. Parallel to this increase in interest in the crypto world, the number of dead coins is also increasing. According to research from Coinopsy, the number of dead coins rose by 35% compared to last year. In fact, everything started with the 2017 ICOs. ICO can be defined as the process of raising capital for the issuance of a cryptocurrency. 

What is ICO? 

ICO means for Initial Coin Offering. Suppose you are thinking of ICO as a company. In that case, you will be purchasing a firm’s share by investing in a cryptocurrency that has not become a coin yet. If the technology is robust, you will be rich, just like companies.

ICO trading takes place with digital currencies such as Ethereum and Bitcoin. Since 2013, ICOs have frequently been used to capitalize on the development of the new digital currency. The pre-created icon might be easily traded and sold on all password exchange swaps if there is a demand for them.

With the performance of Ethereum, ICO is increasingly used to capitalize the development of a digital project with the decontrol of a token that is anywise integrated into the project. With this return, the ICO has become a tool that can revolutionize the currency and the entire financial system. The ICO icon could be future securities and shares.

The demand for ICOs is rising rapidly. The amount of investment made in ICOs in 2017 is seven times the total amount made until 2017.

How to Identify Dead Coins? 

We can understand that a coin is dead as follows;

  • Being abandoned or delisted by its developers
  • Use as fraudulent
  • It does not have an official website,
  • Wallet issues

There Are Three Types Of Dead Coins

The Joke Dead Coins: These coins have no plans or technologies. It can still be invested in the beginning by some enthusiasts, in any case.

Those who oppose this situation can cite Dogecoin’s success as an example. Dogecoin is in 6th place in terms of market size at the time of this writing. However, compared to Dogecoin or every one successful joke coin, nine joke coins fail.

As an example of this title, coins such as MonaCoin, ObamaCoin, JesusCoin, AssPennies, Payson, CryptoMeth can be shown, and these examples can be reproduced. Up to 3% of dead coins are dead joke coins.

Scam Dead Coins: Those coins are, as the name suggests, these coins that have been used for fraud. Fraud can take the form of dodging, pumping, or dumping money. Generally, if one or several wallets own a large share of a coin, it would be better to stay away from these coins. Examples are Machinecoin, Loligo, Luckbox, Lotus, LoopX, Lolicon.

Abandoned Dead Coins: The most common are dead coins. It happens in the form of the death of the developers, the loss of hype, the failure to make the requested funds, or removal from the exchanges. Each coin must meet specific criteria and conditions listed on exchanges or remain on the list. Otherwise, they may be delisted by the stock exchange. LOOIX, Maecenas, Lucky7Coin, Locus chain are some examples. 

It is difficult to predict whether a coin will become a dead coin or not. You can reduce the risks by following the altcoins you invest in on forums and social media platforms.

SEE ALSO: Altcoins: Best Alternative Cryptos To Mine

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Caroline Tetra

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