A cryptocurrency is said to be dead when it is abandoned and turns out to be a scam, inadequate funding, low liquidity, or scams for any other reason. These types of coins can be viewed by clicking the ‘Show All Balance’ tab on the Binance wallet section or simply searching the wallet’s public address. There are three types of dead coins: joke dead coins, abandoned dead coins, and scam dead coins.
Joke dead coins are launched for the sake of it, there is no particular plan in place. Approximately 3% of all dead coins come under the category joke-dead coins. Some of the examples of joke dead coins include ObamaCoin, MonaCoin, and CryptoMeth.
Abandoned dead coins originated for several reasons such as developer death, restricted funding, loss of traction, and removal from exchange. Maecenas, Lucky7Coin, and Locus chain are some of the popular abandoned dead coins.
Scams in scam dead coins include runaway with money, enormous pre-mine, and pump-and-dump. LoopX, Loligo, and Luckbox are some of the popular scam dead coins.
Characteristics of Dead Coins
Dead coins are different from active cryptocurrencies for its lack of trading activity and the coin is no longer traded on major crypto exchanges because of loss of interest and liquidity. These coins often have abandoned development teams which typically means there is no ongoing updates so these coins may be susceptible to security vulnerabilities. Another characteristic is that its community engagement will also decline.
Dead Crypto Coins from 2013 to 2022
Below is the breakdown of how many crypto coins died each year by reason:
| Dead coins by year | Abandoned / No volume | Scams / Other issues | ICO failed / Short-lived | Joke / No purpose |
| 2013 | 9 | 0 | 0 | 0 |
| 2014 | 277 | 20 | 5 | 2 |
| 2015 | 223 | 27 | 1 | 2 |
| 2016 | 152 | 22 | 4 | 5 |
| 2017 | 169 | 71 | 46 | 6 |
| 2018 | 390 | 237 | 112 | 12 |
| 2019 | 203 | 73 | 51 | 2 |
| 2020 | 77 | 19 | 9 | 0 |
| 2021 | 34 | 36 | 2 | 2 |
| 2022 | 50 | 23 | 8 | 2 |
| Total | 1,584 | 528 | 238 | 33 |
2018 was such a big year for crypto failures. This is mainly due to the increase in Bitcoin price above $1,000 for the first time with an eventual peak near $19,000. Hundreds of coins were launched in 2017, and half of them were dead by the end of 2022. Also, most of the coins that were launched between 2013 and 2017 died by the end of 2022
| Coin start year | Dead coins by 2022 |
| 2013 | 66.67% |
| 2014 | 76.54% |
| 2015 | 68.42% |
| 2016 | 60.87% |
| 2017 | 57.14% |
| 2018 | 27.62% |
| 2019 | 4.74% |
| 2020 | 1.03% |
| 2021 | 0.59% |
| 2022 | 0.06% |
Reasons Why a Coin Becomes Dead
Knowing the reason behind the fall of dead coins is crucial to understanding valuable insights into the challenges faced by crypto projects. Here, we have mentioned the four key reasons leading to the death of cryptocurrency:
- Lack of development is the main cause of a coin’s demise. To keep it relevant all the time, it is important to make continuous improvements and updates, or there is a greater probability of losing the momentum and leading to death.
- The crypto market has experienced several scams and fraudulent projects. This might be surprising, but a few of the coins are launched only to defraud investors. These projects are introduced with an objective that, once it is fulfilled, will leave the investors with worthless tokens.
- To make a cryptocurrency relevant, community support is necessary. If the project fails, a strong community should be fostered, but this might be difficult. If there is no support and interest from the user side, there is a chance of eventually reducing the relevance.
- Every now and then, technology advances, and these should be adapted by the crypto to remain relevant. If it is not updated with new technologies, it will lose its competitive edge and fade into obscurity.
How to Avoid Dead Coins?
Some cases have been reported regarding the investors’ investments in dead coins, this will end up leaving the investors with worthless tokens. To avoid dead coins, certain measures have to be taken from the investors’ side, and they are noted below:
- As always, thorough research is necessary. While investing in crypto, make sure you have investigated the associated development team. While investigating, keep these points in mind: the teams’ expertise, previous projects, and qualifications. Be vigilant if the team members have been involved with any kind of scam in the past.
- Carefully read the whitepaper, as it is a document that outlines the crypto’s technology, roadmap, and use case. Check out any if there us potential warning signs
- For any information about the platform, you can seek information from Twitter and Reddit. You should check for the active communities, general positive sentiment surrounding the coin, and ongoing discussions.
- Keep distance from get-rich schemes. Stay away from crypto if it guarantees unrealistically high returns or appears excessively advantageous.
Closure Note
The crypto world is an ever-evolving field where there is a small portion of coins that are dead. Dead coins are cryptocurrencies that are no longer active or have become obsolete. Bitconnect, FTT, and Auroracoin are a few examples of dead coins. To keep away and safe from these type of coins would be difficult if not it will lead to potential pitfalls. Before investing in any cryptocurrency, the investor should analyze factors such as community engagement, trading volume, development activity, social media presence, and team communication.