The undeniable rise of cryptocurrency has been a long standing question mark in the eyes of investors for several years now, many of which have only recently gotten into the space following the pricing of various cryptos rising substantially in 2016 & 2017.

This unprecedented rise garnered a ton of attention for the top tier cryptocurrencies, such as litecoin, ethereum, and bitcoin of course, however, the attention that illuminated the top players, also shined bright on the newer ICO projects that had been launching at the time.

Over the course of 2017, ICOs made an intense improvement, even in terms of investors and overall number of investments made as well, with that number estimated to be roughly $5.6 Billion USD. With these numbers, even in the face of adversity, cryptocurrency investments are a risk worth taking, however, there must be valid reasons behind the massive failure that has overcome countless ICO startups across time and that is what we are going to explore below.

In certain instances, there have been cases of outright collapse, while in others it seems to be a simple lack of forethought and follow through. Whatever the case may be, it is imperative that we are making in depth reviews of our options, prior to making any investment choices because let’s just face it: In some cases, it’s just a downright SCAM!

How to Spot a Failure

Before you get too familiar on how to spot an ICO with nothing but failing potential, take a moment to review our article on protecting yourself from cryptocurrency fraud, so that you can avoid the endless stream of scammers that have begun to infiltrate the space.

Moving on, as I said before, you will have to take an in depth look into any company that you are considering investing with, I mean… It’s only smart! Now, as we are reviewing the company, it is important that you take out the time to review their whitepaper, business plan, use cases and even test their beta version if it is available.

Generally, you will be able to ascertain whether or not this potential investment is worth your time, based on the information that is made available by the company, however, here are a couple more reasons that you may see them fail.

1. Issues with Project Technology

Several projects that have launched over the last couple of years had begun to exhibit signs of potential failure at an early stage due to various technical issues that, in turn, led to a lack of market traction and advancement. Whether it is the projects overall security, scalability or usability, technological issues will almost indefinitely kill your chances at success in this space. As a general rule of thumb, though you may not have expert knowledge of the technology behind a project, you should at the very least, understand Blockchain basics prior to investing.

2. Lack of User Adoption

Will the token be able to attain substantial user adoption? Something all investors look to confirm, while checking to see that the project will prove useful for real-world applications. Although there are many innovative and creative ICOs out there, some platforms simply start with a poor vision. If there is no foreseen potential for long-term adoption and value, it probably isn’t the best investment choice

Easy as it may be to jump the gun and assume that these failures are indicative of an industry ripe for an impending collapse, however, that couldn’t be farther from the truth. It is important to fully review a company prior to making a decision on where you will be making your cryptocurrency investments.

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