In 2018, over 1000 cryptocurrency projects fell

According to data from the Deadcoins portal, in 2018 more than 1000 cryptocurrency projects have already fallen. Most of the projects that have fallen are primarily scams, or simply financial frauds, feeding on easy earnings in the ICO phase. Most developers of these cryptocurrencies promised "pears on a willow tree", creating a false image of quick earnings through proprietary tokens. Some have failed due to technical incompetence of the team, while the rest are mostly scams and financial pyramids.

the narrative consisted in creating an environment that would help entrepreneurs finance their ideas. However, most of the current projects use marketing tactics of typical financial pyramids, encouraging fast earnings or the possibility of finalizing transactions using a given cryptocurrency in the future.

Currently, the amount of ICO in 2018 has more than doubled compared to last year. It is worth noting, however, that in 2018 over 1000 projects fell, much more than in the previous year. According to Coinpsy and DeadCoins, two platforms that monitor unsuccessful cryptocurrency projects, these dead start-ups include projects such as BRIG and Titanium.

The "pump and dump" fraud, which is an artificial price increase and quick sale, remains a clear and current threat in the unregulated ICO market. Many dishonest people create business models that have no cost-effective economic benefits. Then they attach a worthless token with little or no usefulness, pumping the value and attracting investors. When artificial demand is created and the price is overstated to the desired level, operators pay investors worthless coins. This is what most ICO projects look like in a nutshell, which from the beginning were intended to be a financial fraud.

BitConnect and a big fall
The best example of a typical fraud and financial pyramid in the area of ​​virtual currencies is the BitConnect project. In July 2017, BCC cost $ 45, and at the beginning of January this year. the price of "cryptocurrencies" BitConnect has reached as much as $ 440. Just ten days later, BitConnect dropped to $ 19 apiece. The current BCC price is 45 cents. Without a doubt, 2017 was a great gain for the project, many people came to the project by buying tokens. Unfortunately, but a large part of Americans have invested all their savings in BitConnect, losing it with the fall of cryptocurrency.

The mechanism of financial pyramid operation is based on the fact that their founders obtain the largest number of participants (investors) who - encouraged by the promised profits - pay them money. In the case of BitConnect, these were "guaranteed" profits at various time intervals.