At the moment of writing, there are more than 20,000 cryptocurrencies available on the market. However, if you do your research, you will find out that many of them are no longer active or hold any value. Actually, if we remove inactive cryptos from the crypto space, there will be less than 9,000 left on the market, in which you can invest or trade.
As we know, more and more cryptos are coming out every now and then, but at the same time, many digital currencies are dying.
If you are looking for an investment or trading opportunity on the crypto market, you must know how to recognize and avoid dead cryptocurrencies.
What are dead crypto coins?
As we already mentioned, dead cryptocurrencies hold no substantial value. They are either worthless, inactive, or often both. Dead cryptocurrencies are dropped by their development teams, are created as scams, or haven’t taken off. There are some characteristics that can help you identify if a coin is dead. Here are some of them:
The project has been abandoned by the developers or has been delisted;
The project has been used as a scam;
The project doesn’t have an active website;
There are some issues with the project’s wallet;
Another thing to know about dead crypto coins is that there are different types of them. The most common types are:
Joke dead coins - they weren’t created with a specific use case. Often, someone decides to make currency bets despite these coins being created for that purpose. Actually, some of these coins became quite popular, and Dogecoin is the perfect example. The important thing to keep in mind here is that for every joke coin that is successful, there are nine others that fail.
Abandoned dead coins - it is easy to find an abandoned crypto coin. Usually, the developers give up on the project if they have inadequate funds, get banned from exchanges or else. Lucky7Coin is an example of an abandoned dead coin.
Scam dead coins - unfortunately, scam coins are being used by many. The two primary types of scams are pump and dump schemes and extensive pre-mining. Our advice is to avoid crypto projects where most of the tokens are retained by the development team.
How to recognize and avoid dead crypto projects?
As an investor, you should always encounter the risk of investing in dead cryptocurrencies. That is one of the reasons we always suggest you do proper research and exercise due diligence.
Here’s what to do, in order to avoid dead coins:
Research of the development team
Before investing in any crypto, do good research on the development team associated with it. Find information about their expertise, qualifications and other projects.
Read the whitepaper
The whitepaper is an important document showing the crypto’s technology, use case, and roadmap. It is important to take a careful look at it and watch out for warning signs, for example, vague or unrealistic claims.
Leverage the social media platforms
Social media can be valuable sources of information about cryptos. Look for active communities, ongoing discussions, and have a generally positive sentiment surrounding the coin.
Do not trust Get-Rich-Quick schemes
Keep in mind that Get-Rich-Quick schemes, promising major profits in no time, are usually a scam. Try to stick to well-established coins and reputable exchanges, and of course, never invest more than you are willing to lose.
Final words
It is not a secret that investing in cryptocurrency is always a risky process. Many crypto projects have become dead over the years, but fortunately there are some steps you can take to avoid such projects, and proper research is an important part of them.
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