Most cryptocurrency projects ultimately fail. Some are outright scams, or created as a joke.
Others are just disappointments, sincere efforts to fill a real need but which, for one reason or another, fail to live up to their initial hype. Eventually, they fade into obscurity or disappear altogether, leaving investors with painful losses.
Here’s our list of the top 3 most overrated cryptos.
EOS was launched in 2017, allegedly as a smart contract platform that promised to be much faster than Ethereum, free to use and simpler for developers to write new apps. It was created by Block.one, a company co-founded by former child actor and future presidential candidate Brock Pierce.
The project took off quickly. An unprecedented year-long initial coin offering (ICO) raised a record $4.1 billion, and by April 2018, EOS grew to be one of the top five cryptocurrencies, with a $17 billion market cap and a $21.50 price.
When it moved from Ethereum to its own blockchain in June, more than 50 organizations, including the Huobi exchange, vied to be among its 21 “supernode” block producers. Reddit and other Social media was abuzz, guessing when EOS would “go to the moon.”
IMG SRC - most overrated cryptos - EOS
Then, the troubles began.
In June, EOS block producers froze 34 accounts suspected of holding stolen coins, without informing the governing EOS Core Arbitration Forum (ECAF). This drew criticism that the network was over-centralized, with only 21 block producers, chosen by elections that can be easily rigged by a few rich miners.
Then in 2019, the Securities and Exchange Commission fined Block.one $24 million for failing to register their ICO. EOS holders then sued, claiming the ICO was a fraudulent scheme that made false or misleading statements to artificially inflate the price.
Yet, the hype continued, with YouTube pundits talking about EOS’s glorious future. Meanwhile, the price had fallen to around $2 by the end of 2018. Since then, except for a brief rally during the 2021 bull market, its price has gradually dropped to around a dollar.
EOS is still active (and supported by the Exodus EOS wallet), and its merits are debated endlessly by hardcore fans on social media. But according to a report by Outlier Ventures, the project has been abandoned by developers, and has since been overtaken by better-designed and managed competitors like Solana and Polkadot.
Grin was going to be the next great privacy coin, using Mimblewimble encryption. When it launched in January 2019 at over $10, pundits and influencers like Oliver Isaacs considered Grin to be “the future of crypto.”
Since then, the coin’s value has drifted steadily downward to around seven cents in 2022. And, contrary to Isaacs’ prediction, it never got listed on Binance or many other major exchanges. There are a few possible reasons for this disappointing performance.
Also, Mimblewimble proved not to be unbreakable. In November 2019, Russian blockchain researcher Ivan Bogatyy revealed on Medium that he could de-anonymize 96% of all Grin transactions, spending just $60, concluding that “Mimblewimble’s privacy is fundamentally flawed... and I don’t believe there’s a way to fix it.”
Finally, privacy hasn’t been as much of a selling point as many market watchers once thought. Except for Dark Web lurkers, most users appear to value speed and low fees much more than maximum privacy.
#1 Bitcoin Diamond
Bitcoin Diamond is the worst performer in this group, losing over 99.6% of its initial value. It was created by a Bitcoin hard fork in November 2017 that was motivated by extreme network congestion during that year’s bull run.
BCD incorporated several supposed enhancements: a Proof of Work algorithm that favors standard graphics cards over specialized mining ASICs, a much larger block size and segregation of transactions and signatures to save block space. Also, the number of issued coins was increased tenfold.
Community reaction was critical, to put it mildly, Redditors were particularly brutal in their criticism:
At the time of the fork, Bitcoin was trading at around $8,800, and BCD launched at about $94. Nearly five years later, BTC has risen through good times and bad, settling at $23,000 in August 2022, while BCD is worth about 17 cents.
Bitcoin Diamond wasn’t outright mismanaged; it’s just that Bitcoin itself eventually implemented SegWit and the Lightning network to address the issues that caused the BCD fork, making BCD irrelevant.
These are just a few examples of promising, heavily-hyped crypto projects that disappointed investors. It’s a good bet that most of the current top 500 coins will be forgotten if not gone within a couple of years.
The moral to this story is: be very cautious when you hear a new project being promoted by “experts” on social media. Be sceptical when a project boldly states that they will overtake Bitcoin or become the new Ethereum. Do your own research, understand that all cryptocurrency investments are risky, and never put in more than you can lose and still sleep at night.
If you enjoyed reading our top 3 most overrated cryptos, why not check out our related article, How to detect crypto scams? And if you want to buy Bitcoin or Ethereum with your credit card, debit card, bank account, or Google Pay, you can do so using Ramp in Exodus.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.