Ask CryptoVantage: What Are “Zombie” Coins?

Given the ups and downs of most cryptocurrencies, anyone can make an argument that a certain crypto is a zombie coin.

Granted, cryptocurrencies are the new craze taking over the world of finance, however, even Bitcoin has been declared a fad multiple times with naysayers spelling doom and gloom over the future of the premier coin.

But while it seemed like Bitcoin was a fad or dead at some point, everyone is now getting on board as Bitcoin starts to rise once again. You can pretty much determine how popular a cryptocurrency is by looking at its price chart. As a rule of thumb, a parabolic chart is a clear indication of a coin’s popularity.

What Makes a Zombie Coin?

You would be surprised to see how many coins have had multiple spikes in their prices before eventually dropping back down again. With the growing crypto space, there are just so many of these dead coins out there that it would take ages trying to list them all.

In the last crypto bull rally in 2017, a ton of cryptocurrency projects launched ICOs (Initial Coin Offerings) most of which caught the interest of many retail traders who filled their digital wallets with tokens belonging to these projects.

However, once the hype was over and the bulls took a bow and left the market right at the start of 2018, many of these projects turned out to be scams and failed miserably instead of using the funds they gathered to continue development. The effects were felt across the market and the prices of most tokens dropped with some falling by over 80%.

Market-wide crashes as seen in 2018 give birth to many would-be zombie tokens however, some remain dead forever and never come back to life. For crypto projects that continue to work on their platform or tokens that were previously thought dead but still have a sizeable number of token holders, there is a chance for a restriction hence the “zombie coin” status.

Examples of Zombie tokens

Many zombie coins we can pinpoint today are the result of forks on the main Bitcoin blockchain.

Given the fact that it is pretty easy for anyone to fork Bitcoin’s open-source protocol and claim to have a new coin, many scammers were able to create multiple forks of Bitcoin. However, without a following of dedicated miners to back up the new fork, any forked digital asset will soon die a natural death. Here are a few examples:

1. BTCP (Bitcoin Private)

One of the most striking examples of a zombie coin is Bitcoin Private. It was a fork between Bitcoin with a merger to ZClassic (privacy-centric crypto) which aimed at creating a Bitcoin that was capable of anonymous transactions. At first, there was a bit of hype around it as traders bought into it only to find out later that the token had little to no practical value. To date, some exchanges list Bitcoin Private however it trades at extremely low volumes despite having a few spikes here and there.

2. BTCA (Bitcoin Alpha)

Another example of a dead coin is BTCA, an “anonymous” fork that was created with the major goal of making people think they were dealing with new tokens when in reality it was just another failed attempt at creating an anonymous coin. Despite its regular blockchain updates and reviews about new features, the token remains dead across most exchanges.

3. BTX (Bitcoin XT)

There was a time when this project known as Bitcoin XT was up and running. It was an attempt to upgrade the Bitcoin protocol so that it could handle more transactions at faster speeds before eventually becoming obsolete after failing to attract enough support.

Conclusion

While it might be too early to call certain coins like ZCash (ZEC) or Monero (XMR) “zombie coins,” there is reason to believe that any coin which previously spiked in price but continues to struggle to hit previous all-time highs could end up on the list of “zombie coins” in the future.

After all, it is a common trend to see more and more digital assets getting listed on exchanges only to later be de-listed as interest in the project dwindles.