According to CoinMarketCap, almost 20,000 cryptocurrencies have come into existence since the industry began. But how many of these are zombie projects utterly forgotten by both creators and diamond-handers stumbling around the sad forgotten darkness of the Interwebs? A site called 99bitcoins.com keeps a running list of dead coins, estimating there are 1,705 dead projects. I personally think this is a giant underestimation. Most of the near 20,000 projects are dead in the water. And today, we’re giving a few a proper remembrance.
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That’s right. We’re talking about dead coins. It’s important to remember that all assets are equal, and as a result of bear markets, a lot of the underbrush is cleared out from the crypto forests, letting the projects with good roots flourish in the next bull run. The goal is to not fall for the hype just like many did for the projects I’m going to cover today. Some of these projects had meteoric rises to the top with relative widespread adoption across the crypto community, so their falls from grace were pretty surprising and devastating, sometimes even crashing the price of Bitcoin along with them. While other dying coins were more obvious Ponzi schemes and scams, here’s looking at you – BNB memecoins.
So, let’s go ahead and get into it. So, what’s in a name? Well, Namecoin is a name you don’t hear very often anymore. It’s one of the original altcoins. Back when CoinMarketCap launched in 2013, it was No. 3. Namecoin attempted to provide a decentralized domain name service and allowed users to register various parts of their identity like email or Bitcoin address. Its domains were much more secure and couldn’t be seized or censored. However, most felt Namecoin wasn’t very user-friendly since the domains were really only viewable on Linux systems. Back in 2015, it came out that there were only 28 active domains out of the 120,000 that had been registered. In the 2013 bull run, Namecoin reached a market cap of $100 million, dropping significantly during the crypto winter, but spiking up to $133 million in 2017 bull market.
Now, it has very weak trading volume and a market cap of $10 million. The team’s still active, so you never know if this one will rise from the dead. But it’s not a moniker I’d want on my portfolio. One coin to rule them all! One coin to find them. One coin to bring them all up into the darkness? Nope! Actually, OneCoin didn’t work out too well for anyone involved. OneCoin was founded by the self-appointed crypto queen Ruja Ignatova and touted itself as the Bitcoin killer. Later identified as a Ponzi scheme, OneCoin pulled in $4 billion between 2014 and 2016. Ignatova claimed OneCoin can be mined and used for payment, but there wasn’t actually a OneCoin blockchain or payment system. They also sold courses on crypto and investing, most of which was supposedly plagiarized, incentivizing people to bring in more participants. Basically, it was a pyramid scheme. And you could only cash out if you bought a certain level of the education packages because it wasn’t actively traded on major exchanges, just the OneCoin website. Big red flag. The website shut down in 2017. And with it went all hopes of investors making a profit. When various governments became suspicious, Ignatova just disappeared, leaving her brother and co-founder to run the company.
They were both arrested in November of 2019. And Ruja Ignatova’s brother finally took a plea deal promising to inform on his sister and OneCoin’s other conspirators that supposedly had links to the Bulgarian mafia. Wild! Sounds like he’ll be in need of some witness protection. Bitconnect! It was released in 2016, allowing users to exchange Bitcoin for the BCC token, receive an insanely high yield of 1% compounded daily interest. The price of BCC rose from its ICO price of 17¢ to an all-time high of $463, spending time in the top 20 coins. But everything came crashing down when the UK government sent Bitconnect an order to prove its legitimacy in November of 2017, and the great state of Texas followed suit in January 2018, issuing Bitconnect a cease and desist letter claiming the company was a Ponzi scheme. Bitconnect shut down a few days later, and the price crashed 92%. There was an attempt to freeze Bitconnect’s assets, but we’re still not sure if the company ever actually even existed. So that didn’t work out very well. Bitconnect did refund the loans in BCC, but the internal exchange price and liquidity collapsed, and the coin went to zero.
So, what was the point? The SEC sued Bitconnect its Indian founder Satishkumar Kumbhani and the American national promoter Glenn Arcaro, estimating they defrauded $2 billion from US investors. Arcaro pleaded guilty at the end of 2021. The Department of Justice is still trying to locate the Indian founder who seems to have disappeared into thin air. Maybe he and Ruja Ignatova are hiding out on a yacht somewhere together. Some other notable crypto fails include Storium, which promised users storefronts on its digital marketplace almost like an early metaverse project but was poorly organized and basically had no roadmap. The 0xBitcoin team left the project when it crashed from $5 to 10¢. Aeron plummeted 90% when it was delisted from Binance and the team minted a ton more tokens only to negatively impact the price even more.
They responded by blocking anyone on social media who questioned them. These are just a few of the thousands of coins that now live six feet under in the crypto graveyard. During the height of the bull run back in April and May of 2021, the memecoin craze reached full mania. DOGE was founded in December of 2013, likely to profit off the trend started by the long dead Feathercoin. But it really didn’t gain traction until people started buying it as a joke in the winter of 2020. And when Elon Musk began tweeting about it, it made a lot of millionaires seemingly overnight. In an attempt to make quick profits, everyone started putting out DOGE copycats, like Shiba Inu. SHIB had massive gains but crashed hard as soon as the market started to get rattled. And there were the copycats of the copycats. Floki Inu Dogelon ShibaPup It seemed like there was a different memecoin every day, each with a more ridiculous name than the last. And when the market fell oversaturated with dog coins, the trend moved to the even more absurd and vulgar.
There was a coin called Australian Safe Shepherd. We’re a family-friendly show, so I’ll let you spell out that coin’s abbreviation. But the memes moved to all kinds of body parts and swear words. Anything to get the attention of the Twitterverse or Reddit subreddits. A lot of these coins had their moment in the sun as they shot up towards the moon, sometimes for less than 24 hours, only to come crashing back down to earth when everyone cashed out and dumped on investors too slow or too diamond handy to get out in time. The memecoin gambling frenzy was escalated by the fact that most of the coins were on the BNB chain. With such low transaction fees, there was almost no risk to put $100 or so into a coin with hopes it would 10X in a day. There were coins like Squid Game and SafeMoon that capitalized on cultural touchstones. When SQUID skyrocketed from mere cents to almost $3,000, the founders rug pulled, collecting $3.4 million from their investors. The team announced on their Telegram that they were abandoning the project because they were depressed from the scammers and overwhelmed with stress, subsequently deleting their whitepapers and websites. In the same way, SafeMoon was pumped by all sorts of celebrities back in 2021, finally reaching its peak in January.
But since then, it’s crashed 85%. When the coin started crashing, SafeMoon tried to convince its investors it would bring a combination of multiple innovations combined into a single SafeMoon ecosystem. Whatever that means. They want to bring a bunch of wind turbines to single households, including in Africa, something a page out of the Cardano book, by saying it was going to serve the unbanked. No one really knows how the wind turbines will benefit the company or investors. The company promises to release its own exchange. But any positive news is overshadowed by all the lawsuits people have thrown at SafeMoon with misleading promotions and celebrity endorsements. Many of the team have left the project. And investors suspect the team cashed out a while ago. But because these memecoins were so frenzied and fast-paced, few investors actually took the time to research the teams behind the projects. Most of these s-coins were basically Ponzi schemes. And unfortunately, as with any addictive activity, memecoin traders didn’t stop when they should have. They got greedy caught up in the euphoria.
And a lot of people put in more money than they were willing to lose. Finbold estimates scammers rug pulled almost $3 billion last year, $7 million per day. Many blame the irresponsible and scamming memecoin trend as part of the reason for the May 2021 crash. The lesson here is twofold. One, not all coins stick around even if they appear to have good fundamentals. That’s why my long-term crypto holds are reserved for Bitcoin, Ethereum, XRP and Cardano. They have been around for a while and have had consistent development and partnerships made over the years. There is no room in crypto for rose-colored glasses. You can’t just put money into a coin and forget about it. Lesson 2, flashy crypto trends are very high risk. And you should never put money into a project you haven’t fully vetted. Only a lucky few get rich quick. The rest get broke quicker.
Make sure you have good risk management and only invest what you’re comfortable losing. Please don’t be like the Squid Game investor who lost his life savings on a memecoin literally made about a TV show. But if this video can teach us anything, is that there’s a risk to any investment no matter how stable the project seems. We saw that recently with LUNA. Make sure to be careful, guys. Confess your sins in the comments and tell us if you participated in any Ьemecoin gambling during the height last year.
This article is a transcription of a video made by BitBoy Crypto
Original video: https://youtu.be/xauEmrTk2lI
