Top 4 Dead Crypto Coins of All Time
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When we talk about cryptocurrencies, Bitcoin is the most commonly referenced crypto coin. In reality, 19,000 crypto coins exist, and as many as 1,000 different coins were recently added to the market in a month.
As you can guess, not every coin makes it big like Bitcoin. There are so many coins that have faded into obscurity, often being called dead. One of the most famous examples is the Terra Classic coin (LUNC).
In this article, we’ll give a rundown of some of the cryptocurrencies that went into the blockchain graveyard.
What are Crypto Coins?
Crypto coins are digital currencies produced and stored in a decentralized electronic ledger. They are also referred to as cryptocurrencies or simply as crypto.
The ledger in which they are stored is not controlled by a central computer. Instead, several computer nodes are networked together and store the entire ledger or parts of the ledger. Additionally, all the transactions across the ledger can be viewed by any user.
Crypto coins are used as a medium of exchange for transactions on the respective blockchain ledger. Because the network is not centralized, cryptos coins do not need to be managed by a central authority like a bank.
Why Are There So Many Crypto Coins?
When Bitcoin was launched in 2009, it was a revolutionary way to transfer cash. However, Bitcoin’s original design has several problems. The biggest problem was scalability. When more users became interested in it, the network became slow, and transactions were costlier.
The Bitcoin source code was also available to the public, and many programmers can create new blockchains over time. Today the entry barrier for this is low.
Many startups started creating blockchains for different purposes, each with its native crypto coins. New crypto coins are often called ‘altcoins’ as they represent an alternative to Bitcoin.
Some crypto coins like BCH could be traded faster than the original BTC. Other cryptocurrencies like ETH were created with efficient algorithms, while others were created on top of existing blockchains (MATIC), or as currency in other applications (MANA and SAND).
There are also cryptos like Dogecoin that were created as a joke.
What Makes Crypto Coins Valuable?
Like fiat currency, cryptocurrency can be perceived as valuable among users. Here are some things that make crypto coins attractive.
If the blockchain works and does not face any service disruption, then people will consider buying it. Classic blockchains that used Proof-of-Work blockchains had scale problems and could not deal with high traffic.
In most cases today, stability is not a major issue, as the issuer can be fixed in a test environment before launch. Many crypto coins are generated on existing blockchains that are already stable.
Hackers can compromise a blockchain and steal crypto coins stored on it, causing massive losses to stakeholders. Hacks can kill a blockchain. It almost happened to Bitcoin.
There have been other major hacks, such as the Ethereum hack, which resulted in a hard fork of the blockchain. The crypto coins on the original Ethereum blockchain (now called Ethereum Classic) lost their value. Therefore, a secure blockchain that is resistant to hacking attempts is trustable.
Transparency in the Governance of Core Team Members
Transparency and fair governance are two core principles of modern blockchain operations both on a technical and financial level.
Technical features can be loose on these two terms, depending on the features of a blockchain. But it is necessary for the team in charge of any blockchain to work and demonstrate these principles.
A team that clearly communicates the value of their crypto coin assets and competently manages a blockchain enterprise can generate confidence among users who buy their crypto coins. Otherwise, it will be perceived as nothing more than a scam.
If any crypto coin fails to show at least one of these three traits, it can irreversibly lose value – or, as they say – it can die.
Top 4 Dead Crypto Coins of All Time
Here’s a list of some of the most well-known dead crypto coins (although, if you’re hearing about them for the first time, we won’t blame you!).
1. PayCoin (XPY)
PayCoin was founded in 2014, nearly 5 years after the launch of Bitcoin, by cloud-service firm GAW Miners. The company wanted to create a new cryptocurrency for payments using the PayBase exchange.
The cryptocurrency was based on the SHA-256 PoW algorithm, similar to Bitcoin. The company initially attracted investors by guaranteeing a $20 price for every Paycoin on the blockchain.
However, soon after it was launched, its maximum value could not exceed $16. GAW Miners would eventually turn it into a generic altcoin. Investors began to lose confidence in the company, and within months, its value plummeted to less than 5 cents per coin.
The FTC started an investigation and its founder and CEO escaped the US, only to be jailed sometime later.
2. Terra Classic (LUNC)
The case of LUNC is a well-documented case of a crypto coin failing. The Terra blockchain was founded in January 2018 by Daniel Shin and Do Kwon. Their vision was to provide an alternative stablecoin for crypto buyers.
The Terra blockchain issued Terra USD (UST) which was backed by US dollars and LUNA coins (the native coin on the Terra blockchain).
The idea was to exchange 1 UST for $1 worth of LUNA at any time, and USD owners could recover their dollars in case of a dip in UST value. This selling of UST would remove it from the secondary exchange market and increase its value there due to the low supply.
The price and supply of LUNA coins would adjust accordingly.
A series of events in 2021 (UST losing its USD peg), and in 2022 (news of asset liquidations made by the founders), resulted in UST crashing in value to $0.044 for each coin.
This resulted in the Terra Blockchain automatically creating a large volume of LUNA coins, which reduced its value to an extremely tiny fraction of its $80 price.
This crash also caused other cryptocurrencies like USDX and DEI – coins partially backed by UST – to collapse. The Terra blockchain has now undergone a hard fork, and the LUNA coins in the previous blockchain were renamed to Luna Classic (LUNC).
3. FTX Token (FTT)
FTX was founded by Sam Bankman-Fried and Zixiao Wang for the purpose of trading cryptocurrencies. The company has its own blockchain, with FTT as its native coin.
The crypto exchange Binance also acquired a 20% stake in the firm only 6 months after they started it. The founding partners would also attract many other investors over the next few months. FTT would reach $80 in 2021.
In 2022, leaked documents revealed that FTX was transferring coins to its sister company, Alameda Research. The news prompted wide speculations about high-risk investments for anyone involved with FTX. The controversy prompted Binance to liquidate its FTT reserves, causing the FTT token to lose its value.
It has gone below $1.5, and its future is in disarray. FTX is now bankrupt and is being investigated for fraud. For Bankman-Fried and some investors, it was a multibillion-dollar loss.
The FTX case has spread fear into the crypto market, shaking the confidence of many buyers.
4. Space Bitcoins (SpaceBitcoin)
SpaceBit was an ambitious crypto coin project that promised a globally accessible Bitcoin exchange.
The idea of SpaceBits was to deploy satellites in space that would provide blockchain access and online services to everyone, including remote and unbanked populations. This idea was mostly talk and no show. Today, it has a non-existent value – only $0.08 in total liquidity! This probably makes it the king of all dead cryptos.
There are many other dead crypto coins buried in the market. Some sites have kept lists if you are curious about the numbers (Hint: there are too many dead crypto coins).
The Final Word
While launching a new cryptocurrency today is easy with accessible source code and exchanges to float IPOs, it is always risky. Both issuers and potential buyers make the mistake of thinking of crypto as a get-rich-quick scheme.
Some people have indeed found success with buying crypto, but for every crypto success, there are hundreds, if not thousands, of dead crypto coin projects.
The editorial content of OriginStamp AG does not constitute a recommendation for investment or purchase advice. In principle, an investment can also lead to a total loss. Therefore, please seek advice before making an investment decision.