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TechCrunch: Over 1000 Crypto Projects Are Considered ‘Dead’ Now

More than a thousand of crypto projects are “already dead” as of June 30, 2018, according to a recent TechCrunch report. The news outlet has based its claim on data from two websites: Coinopsy and DeadCoins.

Coinopsy provides daily reviews of various cryptocurrencies, including ones that are already “dead.” It defines a “dead” token as exhibiting at least one of the following: “abandoned, scammed, website dead, no nodes, wallet issues, no social updates, low volume or developers have walked away from the project.”

According to Coinopsy’s list, there are 247 “dead” coins as of press time. These include the notorious Bitconnect that was shut down in January 2018 and is described by the website as “the most successful ponzi-scheme in crypto so far.”

DeadCoins similarly has a 830-item long list of “dead” cryptocurrencies. Among them is the recent Titanium Blockchain Infrastructure Services initial coin offering (ICO) that was shut down by the U.S. Securities and Exchange Commission (SEC) for fraudulent practices.

According to the SEC’s press release, Titanium has raised $21 million from investors from the U.S. and other countries. In its statement, the SEC warned investors about ICOs as an extremely risky type of investment:

“Having filed multiple cases involving allegedly fraudulent ICOs, we again encourage investors to be especially cautious when considering these as investments.”

As Cointelegraph reported Friday, the volume of ICOs has reached $13.7 billion in 2018 so far, which is already twice as much as the market amounted to in the entire 2017. According to TechCrunch, scam and dead ICOs raised $1 billion in 2017.

On June 21, Nasdaq CEO Adena Friedman warned that ICOs pose “serious risks” for retail investors, claiming that projects that raise money this way have “almost no oversight.”

Earlier in June, crypto evangelist John McAfee said that he will stop promoting ICOs due to alleged threats from the SEC.

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Ethereum (ETH) is the Clear Winner, XRP and LTC Not Looking Good

A crypto hedge fund, Austin-located, called Multicoin Capital and supported by Chris Dixon, Andreessen Horowitz’s Marc Andreessen and Union Square Ventures is looking very forward to Ethereum and EOS while tanking down on Ripple and Litecoin.

Ethereum on the Lead

For now we are holding our position, we haven’t sold any. The EOS launch did not go as smoothly as we were hoping it would. All things considered, actually it hasn’t gone as badly as I think people say. […] I concur that it wasn’t as good as it should have been given the resources they had, so they made some mistakes, and slipped up. But on a long-term time horizon those are rounding errors, they don’t really matter. – Kyle Samani, Multicoin cofounder

Kyle Samani added the comments during and interview for Fortune’s Balancing Ledger as it was mentioned that the company will continue holding EOS even with the confusing launch.

But, without a doubt there are many that would choose a different route with EOS as its network and community was hit with negative news almost every day.

“People seem to forget, but Ethereum in its early days back in 2015 when the blockchain launched, it launched with no tooling, no infrastructure at all. People were really trying to beat this thing into the ground, and the system was pretty just challenging to use for quite some time. EOS was better than that.” – Samani

He compared the EOS crypto-independence to that of Ethereum with trouble of launch. However, now according to the co-founder the best bet to go is Ethereum as it remained steady in face of various competitors:

“If you told me to pick one token today and come back in 10 years, I’d pick Ethereum.”

However, even that his bullish standing point is strong towards cryptos with a blockchain based infrastructure, the same thought does not reach the silver coin Litecoin.

Litecoin in my view has no reason to exist. It was a fork of Bitcoin. It’s just been sitting around. The only investment thesis I’ve ever heard for Litecoin is it’s a testnet for Bitcoin, but that’s not an investment thesis.

Being relevant in the market has been quite tough for Litecoin since its credit card like payment system LitePay.

“It’s quite clear to us that Ripple is a security. We don’t know when that news is going to drop, but the catalysts seem to have kind of gone away from Ripple […] My point is, if Ripple is labeled a security formally by the SEC, all of the crypto exchanges are going to stop trading Ripple. So if that happens, liquidity is going to dry up on XRP and the price will plummet.”

On the same path, Samani highlighted to stay in a distance from Ripple, as he said it is for sure a security. But, Brad Garlinghouse – Ripple’s founder, strongly denies any claim that the token XRP is a security of any sort.

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More than 1,000 Cryptocurrency Projects Have Failed in 2018

Cryptocurrency seems to be all the rage right now. Several businesses dot the internet landscape promising one revolutionary blockchain-based technology or other. At the heart of it all, are virtual tokens that somehow power that economy. Despite the apparent growth in the industry, many of these projects have folded up. Some have failed due to technical incompetence of the team while others have been outright scams.

Lack of Trust in the Cryptocurrency Startup Ecosystem

At the outset of the cryptocurrency initial coin offering (ICO) trend, the narrative was one of creating an environment that made it easy for entrepreneurs to fund their ideas. Traditional venture capitalist models were described as being too tedious. Thus, it seemed easier to create a business, slap a token and sell it to the public.

Presently, the ICO volume in 2018 has more than doubled that of last year. However, it is interesting to note that more than 1,000 projects have failed in 2018. According to Coinpsy and DeadCoins, two platforms that monitor failed cryptocurrency projects, these dead startups include projects like BRIG and Titanium.

Several experts have likened the ICO bubble to the internet bubble of the 90s and 2000s. The latter saw an explosion of ecommerce firms many of whom went belly up in no time. It appears that the same trend is repeating itself in the ICO market.

Pump and Dump ICOs

Pump and dump scams remain a clear and present danger in the mostly unregulated ICO market. Many fraudulent players in the market create business models that have no viable economic merit. Then they attach a worthless token with little or no utility, pumping the value and enticing investors. Once the artificial demand is created, and the price is inflated to the desired level, the operators cash out leaving investors with worthless coins.

The ubiquity of exit scams and pump & dump schemes in the ICO ecosystem is an indictment of the fundraising philosophy of the cryptocurrency industry. A lot of these projects appear to be no different from multi-level marketing (MLM) Ponzi schemes. Clearly defined vestment schedules and iron-clad token lockup protocols might go a long way in restoring some semblance of integrity to the ICO framework.

Critics like Jordan Belfort aka the “Wolf of Wall Street” refer to ICOs as the biggest scam. Even the United States SEC has taken a more hands-on approach to combat fraudulent ICO offerings. Since late 2017, the Commission has instigated a major clampdown on ICOs with subpoenas, arrests, and indictments of principal players in the sector.

Words of Caution for Investors

Investing in an ICO is akin to gambling – there’s always the possibility that investors can lose all the money they put into the project. With the loose regulatory framework guiding the industry, fraudsters have ample room to defraud unsuspecting people. Thus, investors should only put in what they can comfortably afford to lose.

Many ICOs promise that their projects will be the next Bitcoin or Ethereum. It is important not to get taken in by such unsubstantiated claims. Plan for the best but expect the worst.

Have you or someone you know fallen victim to one of these dud crypto projects? Share your experiences with the community in the comments section below.

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Spanish Ruling Party Proposes to Use Blockchain in Country’s Administration

133 deputies from the Spanish ruling party, Partido Popular, have proposed a bill to use blockchain in the public administration of Spain, CriptoNoticias reports Saturday, June 30.

The bill was introduced to the Spanish Congress on June 22 and published on the official website of the legislative branch on June 26. It hasn’t been reviewed by other deputies yet. The Congress website has not provided any further information on the bill’s details so far.

As Cointelegraph reported in February, Partido Popular considered to give tax breaks to companies that use Blockchain technology. The relevant legislation was set to be finished by the end of the year.

In March another Spanish party, Ciudadanos, offered to establish clear rules for agents who work with cryptocurrencies and to make them provide the necessary information to the Spanish tax office.

Later in March other major party, PSOE, proposed a motion to study how cryptocurrencies are regulated in other countries.

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Delays Be Damned: Tezos Blockchain Tech Enters Beta Testing

After months of painful wrangling, the Tezos network is up and running – more or less.

The Tezos Foundation announced on Saturday that the blockchain’s “betanet is live.” As the group explained prior to the launch, this means that a fully functional version of the network is available, but still “experimental” in nature, with downtime and even emergency hard forks of the network possible.

The foundation’s plan is for transactions that occur on the betanet to remain valid on the mainnet – the final version of the network, expected in Q3 – but it cautioned that large or important transactions should still wait until the network is more reliable.

The Tezos Foundation proposed a first or “genesis” block for the blockchain, the details of which are available here. Participants can connect to the network immediately, the foundation said, and validation or “baking”– the process of maintaining the ledger, analogous to mining in bitcoin – has begun.

Community members, however, will not be able to begin baking until around 29,000 blocks have been found, the announcement added.

Ryan Jesperson, president of the foundation, wrote:

“The future of Tezos rests in the hands of its community. This moment marks an inflection point for the project, and we are excited to support community developers, scientists, validators (‘bakers’), and enthusiasts from all over the world as they drive the success of this innovative, decentralized network.”

The foundation added that users should be cautious, since allowing anyone to access their private key – through phishing attacks, for example – could lead to the loss of their tokens.

Dynamic Ledger Solutions (DLS), the company that has been in control the code behind the Tezos protocol, has promised to release it as open source software under the MIT license, but the project’s GitHub page has not been updated to reflect a new license agreement at the time of writing.

The Tezos Foundation sold $232 million worth of ethereum-based XTZ (or “tez”) tokens to the public in a July 2017 ICO. With the launch of the betanet, those tokens are migrating to the freestanding Tezos blockchain.

Surprises and delays

Controversially, only investors who provided personal information to TokenSoft, a third-party provider contracted by the foundation, are now able to claim their tokens.

The foundation did not announce that it would carry out these know-your-customer and anti-money laundering (KYC/AML) checks – which required investors to submit names, phone numbers, addresses, government-issued IDs and selfies – until nearly a year after the ICO, in which the foundation accepted bitcoin and ether.

The delay between the the ICO and the platform’s launch is largely due to a conflict that pitted Tezos’ founders, Arthur and Kathleen Breitman, against Johann Gevers, former president of the Tezos Foundation. While the Breitmans controlled the code through DLS, Gevers controlled the funds.

The standoff ended when Gevers stepped down in February, but the platform still did not launch immediately. The foundation’s decision to conduct KYC/AML checks may indicate that legal and regulatory uncertainties stood in the way.

The Breitmans, Dynamic Ledger Solutions, the Tezos Foundation and others associated with the project have been sued at least four times between them.

Investors have aired their grievances on a technical as well as a legal front. At least two groups of developers have announced plans to create alternate versions of Tezos and to dispense with aspects of the platform they don’t like, such as KYC and awards of pre-mined tokens to the foundation.

TzLibre announced the day after Gevers stepped down that it would launch its own version of the Tezos protocol. Another project, nTezos, emerged in response to the Tezos Foundation’s KYC announcement. Both alternate Tezos implementations’ teams are pseudonymous.

Space shuttle image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Pornhub Discussion Overshadows the 49.49 Billion ERC20 Tron (TRX) Tokens Burnt By Tron Foundation

The Tron (TRX) foundation, through their official medium page, has confirmed that they have burnt a total of 49.49 Billion Old ERC20 TRX Tokens today, June 30th. The exact number is 49,490,749,752.120578. Evidence of this can be found on Etherscan as well as the screenshot below.

The Tron foundation also confirmed that the MainNet is still running smoothly as was designed. It currently has 493 nodes around the globe. The Token migration is still in progress and the team will continue to update on the process as well as any further ERC20 tokens that will be burnt.

However, the current progress of the MainNet and token burn has been overshadowed by the recent news that TRX will now be accepted by Pornhub as a means of payment on the platform. Some of the  veteran blockchain and crypto enthusiasts have not been too happy by the move stating that anything to do with Porn is not in line with the moral ethics of blockchain technology.

However, other open minded TRON fans have lauded the acceptance of TRX by Pornhub as a step forward in the mass adoption of not only their favorite digital asset, but as well as all other cryptocurrencies. Backers of this point of view are quick to note that the adult film industry has been known to adopt new technologies at a rate faster than others. Evidence of this can be seen with the use of VCRs and VHS tapes in the 80s and 90s by the industry, as well the new Virtual Reality technology making headlines through VRPorn. In a nutshell, the argument is that if the porn industry likes and adopts a technology, then it must be solid. It will only be a matter of time before it becomes mainstream everywhere else.

Other blockchain enthusiasts are quick to read deeper into the timing of the Porhub announcement. They believe that once TRON utilizes BitTorrent and decentralized the web, then this will mean that porn will also be decentralized on the blockchain. As a result,  Pornhub can come up with its own DApp where fans sponsor their own films and pay for them as well as interacting with the actors and producers.

It will indeed be an exciting time in the crypto-verse going forward with all the possibilities of Decentralized Applications on the Tron MainNet. This will include the predictions of the adult film industries utilizing the Technology.

Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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Zilliqa (ZIL) Up 20% after Testnet v2.0 Launch

The team at Zilliqa (ZIL) have lived up to their promise of launching the second version of the Testnet before the end of the second quarter of 2018. They made the announcement of the new release only a few hours ago on their medium.com page and at the moment of writing this. As it so happens, today is the last day of June and also the last day in the second quarter of 2018. Talk about perfect timing!

The fact that Zilliqa is built from the ground up to be a more secure environment for high-throughput smart contract applications, makes it ideal for the emerging industries of digital advertising, finance, gaming and others which need a high transaction per second speed.

The second version of the Testnet has been given the code name of D24. This new code name is in line with naming the Zilliqa Testnets after the Durian variety of fruits that is prized for its creamy texture and bittersweet taste. The last Testnet was given the code name of Red Dawn: which is also a durian variety of fruit. D24 will unveil a number of new exciting features such as a working environment for developers to begin testing out the new platform that uses the Scilla programming language to build more secure and efficient smart contracts.

This means that as we enter the third quarter of 2018, there will be two prominent projects that have a working Testnet or Mainnet platform. These are the projects of Tron and now Zilliqa. This will in turn make the development of decentralized applications more exciting for each offers its own unique set of developer friendly traits.

The release of the Testnet has made it possible for ZIL to rally by 20% in the last 24 hours. ZIL is currently valued at $0.0728 with the rest of the crypto markets showing some recovery from previous low levels seen early Friday morning.  Bitcoin is currently trading at $6,335 and up 7% in the last 24 hours. This in turn has assisted the total crypto market capitalization to rise to levels of $253.7 Billion from recent lows of $236 Billion.

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SBI Holdings Chairman Says Ripple (XRP) Is Next Global Standard Of Cryptocurrency And Money

While the vote of confidence which the State Bank of India (SBI) has been passing on Ripple (XRP) is creating avenue for the blockchain technology to excel in Asia especially in Inida, the CEO of SBI Group and chairman of SBI Holding, Yoshitaka Kitao came out at a major Blockchain Conference in Japan to flag out the coin with hope that it will soon become the global standard of cryptocurrency and money.

At the seminar tagged “The Japan Blockchain Conference” which took place on 27th of June, the CEO displayed much belief for the blockchain technology as one that will maintain its rapid growth trend and optimize the global financial system.

Mr Kitao added that due to the effectiveness and proficiency of Ripple tool, XRP, financial transactions are done seamlessly, creating a more efficient world. While at the same time, cross border transaction problems are being resolved as the tool fashions an ecosystem for banks that facilitate smart and easy transaction corridor with meagre cost within limited time.

The chairman of the SBI Holdings has been keeping tab on the cryptocurrency since January 2016 before the rally of XRP that resulted into the high valuation of the coin when it surpassed $50 billion.

Then, Kitao noted that XRP is the only tool with “battle-tested” solution that can help augment banking transactions and operations.

“Surveying the market, Ripple was the only company that has delivered battle-tested enterprise solutions and global bank customer traction, including commercial deals with top banks already signed in Asia Pacific. Distributed financial technology is undoubtedly transforming financial infrastructure and we’re excited to drive its adoption throughout Asia,” Kitao said.

Since the gesture, SBI Holdings had dragged financial institutions in South Korea, amongst which Kookmin and Shinhan, the two largest commercial banks in the country, to deploying Ripple tool to better cross-border transactions.

The Japan Blockchain Conference

Rated the largest Cryptocurrency conference in Japan, not less than 10,000 individuals were present at the session where issues related to cryptocurrency market, project, growth, regulation and investment in the sector were discussed.

The conference also featured bigwig like cofounder of Ethereum and creator of Cardano Charles Hoskinson, Bitcoin.com CEO, Roger Ver and other topnotch entrepreneur in the blockchain sector.

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Recently Found Double Spending Vulnerability Is Not Tether’s Own, SlowMist Confirms

China-based cybersecurity firm SlowMist has confirmed that a recent double-spending vulnerability it found in Tether (USDT) is not inherent to the cryptocurrency itself.

Instead, it is enabled by some crypto exchanges’ databases not strictly verifying the status of the “valid” parameter of incoming USDT transactions. SlowMist explained this in a comment to its own Tweet June 28.

On June 28, SlowMist detected a vulnerability that allowed them to send USDT to a crypto exchange without correct field values on the transaction.

Subsequently, the cybersecurity firm explained that the newly discovered vulnerability is not an issue of the Tether network, but is instead a result of poor implementation of some exchanges’ data systems.

According to SlowMist’s statement, the issue is that the exchanges’ databases “do not strictly verify the status of the “valid” parameter.”

“Corrected a bit to explain: This vulnerability is not the USDT’s own vulnerability, but some exchange platform’ databases do not strictly verify the status of the “valid” parameter.

Please do not panic.”

Major crypto exchange OKEx reacted immediately to SlowMist’s report, claiming that its platform “is not affected by this issue.”

SlowMist further retweeted a post by the Omni Core maintainer which provided further information about the vulnerability. Omni Core claimed that the vulnerability comes from neither Tether’s part, nor the Omni Layer protocol, but “rather poor handling of incoming transactions.”

Created in 2012, Omni Layer, formerly known as Mastercoin, is a digital currency and communications protocol based on Bitcoin’s (BTC) blockchain. Tether, originally known as “Realcoin,” is a stablecoin pegged to the value of the U.S. dollar. It was announced in July 2014 and later issued on the Bitcoin blockchain via Omni Layer’s protocol.

On June 25 this year, Tether issued 250 million new tokens, a move that was met with some backlash from critics on Twitter who have expressed doubts about the fact that all USDT tokens are backed by the same amount of U.S. dollars.

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ICO Volume in 2018 Already Double that of Previous Year

Cryptocurrency–According to PricewaterhouseCoopers (PwC), a multinational consulting firm based out of London, and the Swiss Crytpo Valley Association, the number of Initial Coin Offerings registered  in 2018 have already doubled that of the total for all of last year. Despite the plunging price of cryptocurrency, down nearly 70% in market capitalization from the beginning of the year, ICOs have continued to thrive in the space of crypto. While many of the major projects on the market today had their beginnings in an ICO, the practice has largely begun to become regarded by investors as a negative component of the industry. Regardless, the widespread method for funding cryptocurrency projects has managed to find even greater traction in 2018. According to the report:

“In total, 537 ICOs with a total volume of more than $13.7 billion have been registered since the beginning of the year. In comparison, in 2017 there were a total of 552 ICOs with a volume of just over $7.0 billion. Also, the average size of an ICO has almost doubled from $12.8 million to over $25.5 million since last year.”

ICOs are the current source of innovation and provide funding for new projects related to cryptocurrency. But for every one project that offers true potential, innovation and an outline for real world use, there are ninety-nine or more ICOs that amount to nothing more than a pump scheme. When Warren Buffett compares cryptocurrency to gambling, and continually labels the space as a bubble, he is largely looking at a landscape littered with the malpractice of negligent ICOs.

It is worth pointing out that cryptocurrency needs to have an avenue for new project creation and innovative development. The novelty spawned from ICOs is not the problem–in fact it drives the future of cryptocurrency and the steady progress of the industry. The real problem is the narrative and culture surrounding the ICO model. For the most part, ICO’s operate as empty pump schemes, with the entire focus on turning a quick profit. The end result is exploitation, money flowing into an essential ponzi scheme, and a myopic focus on development with the only real milestone being the one that allows a company to start fundraising. ICOs are beneficial to the industry when they can inspire novel ideas and allow for talented, intelligent developers a conduit into the space of cryptocurrency.

The real problem becomes creating a healthy balance between the two. Given the decentralized ethos of cryptocurrency, a feature necessary to both the industry and community, ICOs offer a free market approach that is available for anyone to contribute. Although this opens the door to charlatans and all but blatant criminals, it also allows for anyone to begin developing cryptocurrency without the hassle of gatekeepers.

While the investment base of cryptocurrency would like to see a level of responsibility imposed upon the process of ICOs, particularly one that shifts the incentive away from short-term profit and immediate cashouts to one that rewards the prospering of technology and currency adoption, it also requires a level of centralization and gatekeeping that could stymie innovation during a period when it is most vital to the growth of cryptocurrency. There is no way to create a regulatory or vetting body for ICOs that does not introduce the possibility of foul play in the form of third parties with ulterior motives. Current investors do not want to share market cap with projects that could kill their cash-cow currencies, and established developers have little incentive to promote their competition.

Promoting education, in addition to self-policing community efforts, might be the best option in handling the ICO epidemic. True decentralized communities allow for the market to dictate the growth of the industry, with individuals ultimately held responsible for their financial decisions–even if that means buying into a scam ICO. Cryptocurrency, at this stage in development, cannot afford to impose strict guidelines that stymie growth and the type of innovation that could lead to the next big breakthrough. While the ICO model might be unpalatable to the average investor, it is beginning to look more like a necessary evil to ensure the current trend in growth continues.

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