Although hundreds of crypto-currencies are reportedly "dead", experts believe Bitcoin, the world's most popular digital currency, has a future.
Dead Coins, a Web site that tracks crypto-currencies that have been abandoned, scammed, no nodes, wallet issues, no social updates, low volume or developers have walked away from the project, recently noted that over 800 crypto-currencies are now dead and worth less than one cent.
It says new digital tokens are created through initial coin offerings (ICOs) but some of these projects have been scams and many have not materialised into real products. This has prompted governments across the globe to look into ways to regulate ICOs.
Bitcoin itself last month hit a new 2018 low of $5 826. The latest price low means Bitcoin is now trading at less than a third of its 2017 peak, which saw the crypto-currency spike close to $20 000 in December.
At the time of publishing, Bitcoin was trading at $6 509 (R88 239).
Crypto hype
Max Kortrakul, founder and CEO of social crypto trading platform Carboneum, says: "While there is uncertainty over the future of Bitcoin, the fact remains that there is a large amount of wealth tied up in the currency; therefore, investors will be attracted to it. Its value is a long way from the $20 000 mark we saw late last year, but even if the price is to settle at $6 000 to $7 000 long term, it remains an exceptionally high price for what is a brand new form of asset."
Kortrakul points out the news that 800 cryptos are now "dead" does not necessarily point to crypto-currency being a fad.
"While that is a high number of failed or scam projects that many a well-meaning investor may have lost money on, there are also a far greater amount of genuine, innovative projects that are going about it in exactly the right way. The true success of the crypto-sphere will only become apparent over the coming years as all of these fresh projects mature into the businesses they are aiming to be."
For David Sapper, COO at Blockbid, the crypto-currency hype has barely even begun. "With only 1% of the global population owning any crypto-currency and news of banks and financial institutions looking to incorporate blockchain technology and invest in crypto-currencies, I think there will be a more mainstream adoption in the coming 18-24 months."
According to Sapper, Bitcoin and crypto-currencies as a whole have become sensitive to changes in the market and with the news of Facebook lifting the ban on crypto-currency, some confidence has returned to the market which has in turn seen price increases within Bitcoin.
"However, one thing that needs to change is the altcoin market's dependence on the price of Bitcoin; altcoins suffer or improve based on Bitcoin's price changes and this is one aspect that needs to change for a healthy crypto market."
Ugly period
Alexey Burdyko, CEO and founder of Play2Live, says Bitcoin is currently going through the bear market and will, as it has done before, come out the other side and while it might not hit the heights of late 2017, it will still have considerable value.
"It's fair to say 2018 has not been the best for the coin, with more than one hack affecting the price. It is an ugly period for the coin but we must remember this is a coin that has already bounced back from the decline of just a week ago.
"What crypto-currency lacks is trust and without trust you're always going to be one step behind. With every failed ICO, we see another achieve success but this success is just a lot harder to achieve when there is limited knowledge on the market and limited regulation."
Burdyko adds that as more regulation enters the crypto-currency market, investors will begin to see a further rise in the market.
"Investing in crypto-currency is a speculative investment. The market is unregulated and is incredibly volatile. Anyone considering investing should be prepared to lose vast amounts before they begin to see a profit."
ICO regulation
In regards to the regulation of ICOs, Josh Miltz, co-founder of BitFund, says since the beginning of 2016, ICOs to date have raised about $9 billion.
"While it is feasible for governments and regulators to regulate ICOs, due regard has to be given to the fact that crypto-currencies and ICOs are unique and cannot be regulated under a single blanket."
Miltz notes that recent developments in the crypto-currency industry have raised concern on the "newest" method of raising capital: ICOs.
"As a result, governments have been forced to consider frameworks and the feasibility of regulating ICOs, while facing a two-fold dilemma. On the one hand, you have the need to protect individuals' financial interests and on the other hand, you do not want to prevent innovation for new start-ups to create businesses and implement projects.
"In order to regulate ICOs, governments are required to understand the technology, utility of the token and similarities it has to an existing asset class, prior to regulating it.
"As a matter of legal concern, it would be remiss of government not to regulate ICOs, due to the continuous scams which have shaken up the ICO world in the past 12 months. To this extent, while it is feasible for governments to regulate ICOs, significant legal, technological and financial regard has to be had, in order to ensure the proposed regulations are feasible, by still allowing businesses to raise capital in an alternative form, whilst protecting individuals from potential financial risks."
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