A Study of ICOs Show More than Three Quarters of ICOs are Scams

A Study of ICOs Show More than Three Quarters of ICOs are Scams

A study of Initial Coin Offerings from Satis Group has unveiled some interesting facts. The study is five parts of an analysis of the cryptocurrency ecosystem from networks such as ethereum to emerging blockchains like EOS and Cardano.

According to the study half of the existing crypto asset market which is roughly 1,500 are on existing blockchains like Ethereum. Ethereum has 86% of the platforms on it, while Waves has 2.9% and NEO at 2.3%.

Ethereum still has its benefits, with the report stating-

“It remains to be seen whether any platform will be able to surpass Ethereum’s adoption, which has a high degree of first mover advantage (nearly a three-year head start, plus the entire market share of the ICO discovery phase through 2017) in addition to high levels of community support, liquidity, and developer buy-in. Emerging platforms have been able to differentiate themselves with higher levels of transaction throughput (transactions per second), which generally comes at the cost of higher levels of centralization.”

However, there is one aggravating factor in the mix of ICO’s. The percentage that turns out to be scams in ICO’s are pretty high. These scams are according to the report  “did not have/had no intention of fulfilling project development duties with the funds, and/or was deemed by the community (message boards, website or other online information) to be a scam.”

What is the percentage of scams?

The report clearly indicates-

“On the basis of the above classification, as a percentage of the total number of ICOs, we found that approximately 78 [percent] of ICO’s were Identified Scams, ~4 [percent] Failed, ~3 [percent] had Gone Dead, and ~15 [percent] went on to trade on an exchange.”

Another report from Boston College pointed out that more than half of the token projects fell into the ‘inactivity’ zone within four months of the sales.

Satis Group reports on the cryptocurrency ecosystem are written by author Sherwin Dowlat. He aims to deliver ‘a comprehensive understanding of the pillars that comprise the crypto-asset universe.”

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