The Reasons Behind Lost and Dead Crypto Wallets

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The Initial Coin Offering (ICO) has been in the trend in the past year and most of the applications were filed in the year 2017 when there were a total of 875 cases which was a significant jump from the last year when the figure was 29. 2018 saw the trend get a fresh impetus as the number of cases touch a high of 1,253 projects. Till date there have been a total of 5,683 ICO projects among which 2,318 project were related to Cryptocurrency. Of the total there were more than 4,000 projects that were based on Ethereum platform. Among all the tasks that were taken in hand most of them have not lived up to their expectations. Many of projects that were conceived and started their initial process have been dead. Deadcoins, a platforms that list and tracks all the projects and Cryptocurrency in the market that have ceased or almost had negligible presence puts the number of dead crypto at 1,867 as on Jan. 16, 2020. Another platform that tracks the same development in the market puts the number of dead crypto at 1,416. This makes the entire number of dead Cryptocurrency more than 1000+.Besides dead crypto’s there are also lost crypto, which happens because sometimes investors are unable to access their wallets or their tokens gets stolen or lost.

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As the Crypto’s in the wallet are locked in and cannot be retrieved, they are considered “dead wallets”. According to the digital analysis company that tracks data of the number of crypto’s that are being lost , it is being estimated that more than 300 wallets containing 1,000 to 10,000 Bitcoins will never be recovered and these coins will never be tracked. The number of coins that are missing and cannot be located stands around 4 million coins. And among the 4 million coins that are not in circulation, around 1.6 millions are BTC. Crypto projects are considered dead if they fall into any one of the below categories. The first is if the project is trading but below the floor level which is $1000 for three months. Another criterion that makes the project dead, if there is a lack of social updates or no nodes. The third is the wallet issues, confirmed scams or developers leaving the project.

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Most of the projects that start start with a fresh expectation of doing well but as the results show that around 60% of the startup projects die prematurely even before they are being listed. Among the failures most of the projects succumb due to low transaction volumes and the main contribution is the lack of utility or the inability of the projects to fulfill demands of the customers. Since most of the cases are of the niche category use cases are often limited and overlap. There are various reasons, why a project fails, and one of the reasons is that it being not transparent in its working and management. It has been reported, that around 29.8% of the Initial Coin Offering are considered as being outright scam. Scam Projects manage to draw investor interest, because many investors enter into projects based on speculation. To stay away from these scams and frauds, investors should do a proper research on the background of the project and get a proper idea about the owners and the founders of the project.

There are also cases where projects failed to the inability to raise funds from investors, which makes the funds not being able to start their journey. This happens due to its unwillingness of drawing funding from interested parties or investors.

Source: Coin Telegraph


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