What are the benefits the market brings bad cryptoprocta
According to August, only 36 cryptoprocta of the top 100 have a working product. The question arises: why does the rest of the 64 continue to exist and attract investors? Shared his opinion of Anthony Lo, founder Hodlbot.
To understand why an efficient market requires that the individual items were fragile, I’m going to take some important ideas of Nassim Nicholas Taleb.
Fragile, sustainable and anthropia
Big tree falls loudly
David Kirsh, Professor of entrepreneurship at the University of Maryland, found that the chances of survival for dotcom were not associated with the size of the investment — good funding is not saved.
GovWorks, eToys, Flooz.com, Garden.com raised more than $ 1 billion each, and yet disappeared.
The lower the market capitalization of cryptocurrency, the more likely her death
The market capitalization of most of the 350 dead cryptocurrencies, are present in the directory Coinopsy.com were below $ 25 million.
I was even afraid that we haven’t seen crashing really big cryptocurrency (with the obvious exception Bitconnect, but it was blatant fraud).
Cryptocurrency too reliable
Cryptocurrencies are experiencing almost zero economic pressure, no need to earn them:
After a successful ICO have produced a huge financial cushion, and they can waste a very long time.
Operating costs are low, since most of them shifted to the members of the network in the form of mining.
Unlike a traditional business there’s no pressure associated with the need to earn and profit — projects are evaluated by the quality of the code, and not on ability to generate income.
The founder has no incentive to close the project — you can simply stop to participate in it, and it will evolve on their own, like Dogecoin or litecoin.
Due to its redundancy blackany stable and reliable:
The decentralized blockchain is very difficult to die while alive at least one miner, the network is working.
The blockchain is designed with redundancy and very reliable.
Blockchain also is not afraid of disagreements in the team — you can make a fork, as it happened with Bitcoin and Ethereum Cash Classic.
Investors interested in attracting new capital — cryptocurrency withdrawal of social investment to a whole new level:
Cryptocurrency is very easy to attract capital because they have access to international markets and retail investors.
Cryptocurrencies traded in the secondary market, receive the award for liquidity, which allows founders to raise capital at a higher valuation.
The cryptocurrency is no mechanism fundamental valuation, therefore, possible infinite speculative growth.
Investors interested in the project and attracting new members, especially if it’s bad.
Many investors pretending to read a technical description of the project, but in practice, few delve into the intricacies too difficult to distinguish a good project from a bad one.
Institutional investors can pursue their own goals and to put pressure on the team, but the consensus among thousands of retail investors to organize difficult.
We need to either learn fundamental assessment cryptocurrency projects or invent some mechanism, which increases costs for a presence on the market for bad projects.
If each of cryptocurrency is too stable, would suffer the entire market.