We’ve seen cryptocurrencies come and go, but there are only a few of them that have stuck around since the first time they were announced. Most of them are currently somewhere in the top 50 or top 100 coins in the list today, but there are others that have either failed to gain worldwide notoriety or were just blatant scams.
Some coins have become so useless that their price right now is literally $0.00. There are more than enough stories online where unlucky investors detail how they were misled by project owners to believe that this was the next Bitcoin and how they would use the funds gained from the ICOs to develop the project and help it grown.
Well, now we have millions of people with these useless coins in their wallets, just hoping that maybe they will be worth a bit more than $0.01 so they can sell them and at least get something back.
Because of these stories, several enthusiasts have come up with a list of clear red flags about crypto potentially failing in the future. Here’s some of it here.
The Coin Is A 1st Generation Blockchain
The first problem occurs when you find out that the coin is from the first generation of blockchain. What’s the first generation? Well, all the coins that came out relatively at the same time as Bitcoin, and the ones that have some of the lowest scalability among all the available coins right now.
The only coin that is viable from the 1st generation and that’s Bitcoin, everything else is just way too behind on both price and technology to compete at this point.
It’s much better to go with 3rd generation cryptos that have better scalability, security and growth potential.
The Coin Has No Niche Market
At this point, we are all aware that true online shopping with cryptocurrencies needs to be done through stablecoins. Should you buy something with Bitcoin, you either make the best choice there is, or you regret it the next day due to volatility.
But a decreasing price to Bitcoin is very rarely something to be happy about. Should the coin you’re being pitched to have no niche market, such as payments for taxes, payments for tech services, a specific product or etc. It’s very likely that it will fail in comparison to large cryptos that are currently available in the market.
That was the case when online gaming companies were making cryptocurrencies for the sake of making cryptos. It quickly backfired as their investment didn’t amount to anything, only after which they allowed their traders to use these coins on their own platforms with some additional benefits.
Soon enough the demand grew as the company itself grew and coins became quite the security products when the casinos were actually aiming to make utility tokens.
You can easily see that lots of online companies feature Bitcoin or local cryptos as payment methods for topping up the accounts. This creates value which then drives demand and therefore the prices.
Shady Team
The other red flag you’ll see about cryptos that are poised to fail is either a shady or an incompetent team. All it takes is just a little bit of research to find out who the developers are, who’s the CEO and etc.
These two people are enough to make or break the project. Them having a terrible background in both tech and economics should be a clear sign that they have no idea what they’re doing.
Crypto Coin Crash Conclusion
Should this be the case, make sure that the project is making this crypto for the sake of making the crypto. There is a high chance they won’t bother with developing the project, or will just take the money through an ICO and leave never to be seen again.
