5 Cryptocurrencies That Failed Hard

55

There are largely two types of people when it comes to levels of knowledge about cryptocurrencies. In the first camp, there are the people who were on board with the concept from the very beginning, and got rich in the now-legendary first Bitcoin boom. In the second camp are the people who’ve never felt 100% comfortable with the idea of a currency that you can’t see, touch, or withdraw using a card from an ATM. Among the people in the second camp, there’s always been an assumption that cryptocurrencies were a fad, and that the bubble would eventually burst.

Even though there have been a few rough times for cryptocurrencies in recent years, there’s no sign of them going away for good. If anything, the opposite is now happening. Facebook, after years of looking into the possibility, is now on the verge of launching its own cryptocurrency. Because of the enormous reach of the social media giant, some commentators are predicting that Libra – as the currency will be known – will disrupt the entire global banking economy.

We’ve heard such hyperbole before, of course. Many cryptocurrencies have been declared to be the next big thing, only to vanish as quickly as they arrived – often leaving people out of pocket in the process. What can’t be denied, though, is that they’re increasingly everywhere, and they’re being accepted as a form of payment in many mainstream places that wouldn’t have dreamed of accepting crypto five years ago. An increasing number of mobile casinos are allowing their customers to use cryptocurrencies to pay for playing mobile slots online. While the point of a mobile slots website is to make money – and therefore it makes sense to allow customers to pay for their casino games on mobile any way they wish to – the fact that the facility is now being offered suggests that enough people were asking it of the casinos to compel them to comply to the request.

While it may be becoming more prevalent, getting involved in cryptocurrency either as an investor or a provider still comes with risks – and just having the technology and the media profile isn’t a guarantee of success. Here are five cryptocurrencies who found that out the hard way!

PayCoin

Even now, approaching five years later, it’s difficult to know whether to call PayCoin a disappointing failure or an outright scam. There was much excitement when the currency was launched toward the end of 2014, with noted Bitcoin trader Josh Garza behind the startup, and a network of ‘GAW miners’ who – so everyone was told – knew what they were doing. PayCoin wasn’t just supposed to be a new crypto company; they were supposed to challenge and then defeat Bitcoin. As you’ll have guessed by their presence on this list, that’s not the way things turned out.

The central problem PayCoin faced from day one is that the currency didn’t resemble what had been promised when it was at white paper stage. Taking the time to follow through on his promises seemed to be taking too long for Garza’s liking, so he just launched it as an altcoin clone to reach the market more quickly. It quickly fell below its guaranteed $20 floor value, and Garza fled the USA. He ended up in jail.

WaltonChain

WaltonChain (whose name may or may not be a clever play on ‘wallet on chain’) were doing quite nicely until they decided to do a Valentine’s Day giveaway during February 2018. They weren’t setting the world on fire, but one WTC was trading at around $22, and they were making steady progress. As a marketing campaign, they were giving away currency to a random number of people who were willing to send out a tweet with one of their preferred hashtags on it for a short space of time. They were hoping to raise brand awareness, which they did – for all the wrong reasons.

The contest appeared to be rigged. When the official WaltonChain Twitter account sent out confirmation of the winners, Twitter users were surprised to see the account responding to itself, declaring ‘WOW can’t believe I won!’ Apparently, someone was supposed to log out of the account, log into their dummy account, and post the tweet. They forgot to do so, and WaltonChain were exposed. The value of the currency dropped 30%, and is yet to recover to its pre-scandal level.

DAO

You may have heard about this one even if you don’t know much about cryptocurrencies. DAO was supposed to be the biggest crypto in history. In truth, it’s still doing reasonably well – but it could and should have been worth so much more. Launched by Ethereum, DAO stood for Decentralized Autonomous Organization – basically an anarchic currency that couldn’t be controlled or affected easily by any individual or company. People liked this idea, investing $168m into the startup as it launched.

Unfortunately, just two months after it launched, hackers found a gaping hole in its security, and walked right through it, stealing $50m as they went. The news sent shockwaves through the community, and the value of the currency tanked hard. In a move that split their community of users, Ethereum responded to the hack by forking the blockchain. It made back some of the value, but it cost them their chance of being the new Bitcoin.

GEMS

People don’t like adverts. We know that, because we know how many people visit our website with an AdBlocker turned on. Almost everybody knows that people don’t like adverts – except, it seems, the people behind GetGems, which is more commonly known as GEMS. The idea behind this crypto was simple; people watch adverts, and they get paid a small about of GEMS for watching the advert. The creators planned to build a whole social media website around the currency, and take on Facebook. That hasn’t happened.

The crowd sale for GetGems brought in less than $120,000 – a miserable failure given the stated scope of the project. Despite the lukewarm response, GetGems pushed on with trying to make their idea a reality, but nobody’s really buying it. The currency exists, but it almost completely worthless, and nobody is using the social media site built around it. It turns out people won’t even watch adverts if you pay them.

Ask FM

What was the ‘any question answered’ website Ask FM doing getting itself involved in cryptocurrency? Why did it think that sending people up a mountain was the best way to promote it? Whom among its potential base of users did it think was going to climb Mount Everest to retrieve a digital currency crate? All of this is so absurd that it would be funny – if someone hadn’t died in the process.

Ask FM is now the property of Noosphere Ventures, who also have interests in the world of cryptocurrency. As Ask FM has millions of users, they thought they’d use their new asset to launch a brand new blockchain. The stunt of planting some of the currency on Everest was part of an ill-thought-out ‘reach for the stars’ ad campaign, but one of the party who went up the mountain to plant the currency never made it back down again. The planned wide launch of the currency is on hold pending an investigation.

Like this post? Let us know!
  • CoolAF (0%)
  • Cool (0%)
  • Whatever (0%)
  • Boring (0%)
  • WTF (0%)
No tags for this post.

More News from Nexter