Marius Kramer is the №1 writer and influencer on Bitcoin, Cryptocurrencies on Quora worldwide
While #cryptocurrencies and the #blockchain can practically save the world, it still has teething problems that are not shiny, that give it a bad rap and that cause trouble.
Here are 10 dark secrets from the top of my head that almost no one knows about, but that cause trouble daily in crypto. It still is the Wild Wild West.
Of the 902 cryptocurrency ICOs formed in 2017, 142 failed before raising any funds, and 276 failed after fundraising. Another 113 ICOs fall under the “semi-failed” category, either because the respective startup ceased communicating on social media, or the community dwindled to the point where it has virtually no chance of success. Toss those figures into the pile and the failure rate rises to 59 percent Those figures combined work out to a 46 percent failure rate, despite raising over $104 million.. Cryptocurrency ICOs have a spectacularly high failure rate
Most new coins coming out with market caps in the billions grab investor money by saying they have such high scalability, however, nobody notices that they are all at the heavy cost of decentralization and thus useless (EOS, NEO, Ripple, Stellar, Dash, Tron are all extremely centralized)
Newbie investors will always buy in during the height of a bull run, thus buying high almost at the peak. A few weeks later, the market has crashed and all of them have lost 70% of their money. Newbies never buy when the market is down, like currently. They buy high and sell low. Thus, for every experienced crypto investor, there are several newbie investors that the experienced investor profits off.
The market is almost entirely controlled by whales. They own 40% of all Bitcoins, totalling $70B. They can increase the market cap of Bitcoin from $100B to $1T in a heartbeat if they wanted to. However, they wait for natural market cycles and then pump those.
It’s extremely difficult to detect flawed consensus algorithms and centralization issues such as in EOS, NEO, Ripple, Stellar, Dash, Tron are all extremely centralized. A person without a deep background in computer science and a deep background in business, lots of training to remove personal biases, has almost no chance in detecting coins that scam investors.
Crypto is riddled with tribalism. The worst is the r/Bitcoin subreddit. Any criticism is censored and users who point out flaws of Bitcoin are shamed and banned. r/btc is similar and many other subreddits are.