With over 14,000 tokens in circulation and a $2.4 trillion market capitalization, more might not always be better. Forbes has identified a set of 20 cryptocurrencies, nicknamed "zombie blockchains," that, in spite of their lack of user acceptance and real-world utility, continue to command high market prices.
Famous names like Ripple (XRP), Cardano (ADA), Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum Classic (ETC) are on the list; they are all distinguished by their continuous trading and operation despite not serving any useful purpose.
The phrase "zombie blockchains" describes blockchain initiatives that, similar to the undead, exist but show no signs of vitality in the form of significant user bases or usefulness.
Rather than because they have fulfilled their technological or useful objectives, many tokens survive—and occasionally even prosper financially—because of speculative trading and significant initial funding.
According to Forbes analysts, the original purpose of Ripple's XRP was to rival the SWIFT banking network by enabling quick and inexpensive international bank transfers. It hasn't been able to unseat SWIFT, though, and now it mainly depends on speculative trading to maintain its high market value, with very little income coming from actual network usage.
Analysts stated "that although the XRP token is essentially worthless, its market value of $36 billion places it as the sixth most valuable cryptocurrency."
"Crypto zombies are what ripple labs is. Its $2 billion worth of XRP tokens are still traded daily, but only for speculative purposes. Not only is SWIFT still in use today, but blockchains have made it easier to transmit money abroad. This is especially true for stablecoins like tether, which has $100 billion in circulation and is based on the US dollar," they said.
According to Forbes, hard forks such as Litecoin, Bitcoin Cash, Bitcoin SV, and Ethereum Classic are unused and worth over $1 billion, primarily as speculative speculations rather than useful uses.
These tokens endure because of their historical relevance or the speculative trading inertia; they are frequently the product of debates between developer groups.
Analysts cited a VC's statement as saying, "Liquidity is what's keeping these zombies alive."
An important contributing factor to this phenomena, according to analysts, is the "Ethereum killers," such Tezos (XTZ), Algorand (ALGO), and Cardano (ADA).
These tokens have not experienced much adoption or activity, despite significant prices and technological developments. Although they provide sophisticated transaction processing capabilities, they struggle to get developers to use or embrace these features widely.
According to their creators' fame, some blockchain zombies appear to trade exclusively. Analysts speculated that the primary reason for speculative interest in Cardano is its well-known founder. Cardano, another Ethereum rival, was introduced in 2017 following a rift between its inventor, Charles Hoskinson, and his Ethereum cofounder, Buterin.
The absence of financial accountability and governance frameworks in these blockchain-based organizations—which function without regulatory oversight or shareholder obligations—is another topic covered in Forbes' article. This makes it more difficult to evaluate their viability or financial health, as demonstrated by the example of Ethereum Classic, which is still regularly traded despite experiencing significant security breaches.
April 2024, Cryptoniteuae