CoinJanitor | Why do we even have dead coins?

The value of any item depends on what it does for its end users. This could range from a single use case to a couple of benefits, how fast it executes commands, its storage capacity, and durability among many other factors. One could literally predict the price of any commodity out there by merely considering it’s usefulness.

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The fundamental principle that value is a function of utility came from an Austrian economist Carl Menger. This theory is also used to explain the value of money based on how it can aid us in meeting our financial obligations. How much money is what depends on two basic things;

• The ability of money to be used as a means of initiating transactions
• The ability of money as a store of value (i.e. saving)

The same is the case for cryptocurrencies since cryptocurrencies are nothing but money in a digital form so the same principles can be applied. In order for cryptocurrencies to be a widely used means of facilitating transactions, they need to meet these two basic needs. These two needs also explain the Keynesian theory of the motive behind the demand for money. John Meyner Keynes listed three motives behind the desire of all humans to hold money;

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• Transactions motives
• Precautionary motives
• Speculative motives

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Fundamentally, the principle of value depends on the forces of demand and supply. For every participant in the free market, a high demand means that a high value is attached to the commodity while excess supply signals the possibilities of a future loss in its value. The coin market currently has over 4,500 coins part of which only about 1,500 are still tradable. How can one express the value of a currency that cannot be traded?

The emergence of every new project necessitates the creation of new tokens in order to fuel and maintain such project. This means the token for each project will only be valuable as long as the project is still in existence. Take for example; if an emerging exchange launches a token and this token carries the promise of providing a discount on trading fees to all of its holders using that particular exchange. So traders begin to buy (demand) for that token because it offers a cushioning effect on transaction fees (utility). However, this token loses its usefulness once that exchange goes out of business.

That explains why we have a lot of dead coins in the cryptocurrency market. Some projects cannot just hold on any longer. The highly volatile cryptocurrency market is characterized by instability and fluctuation. This fluctuation sometimes affects the amount of revenue that these projects are able to generate for maintenance and development purposes. A friend of mine always says that if a business isn’t growing the simple truth is that it is already dead. A dead project automatically explains why tokens die. If I would like to travel out of Nigeria and never return, then I don’t have any use case for the naira notes I’m holding at that particular point in time. The best thing to do is trade my naira for another currency that would serve me at that point in time.

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The case with cryptocurrencies is entirely different, tokens don’t announce that they are about to die. The sudden swing we saw in the price of the giant cryptocurrency, Bitcoin a few days ago explains a lot about the uncertainties that lie in the cryptocurrency markets

This uncertainty creates a great aura of doubt to skeptical or potential investors. It’s hard to vet which tokens are viable and are in for the long run. The brilliance of whitepapers doesn’t always explain this, most of the dead projects leaving thousands of investors in the pool of loss weren’t started to defraud anyone. However, it still boils down to how uncertain cryptos can be and how flexible they can be in both ways.

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CoinJanitor is here to cushion the shock that may lead to any loss for all those who trade and use cryptocurrency. It’s like a recycler that takes the waste (dead coins) and in turn, gives you a whole new value.

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I like to picture CoinJanitor as a man in his late 60’s and who is so dedicated to what he does which is sweeping the crypto market. He’s on his way and loves his job. What does he do basically?

his primary mission is to reduce cryptocurrency market dilution and restore lost value to the Crypto Economy. He does this by providing to the holders, community members and creators of failed coins, a buy-out, a way to join a project that has the network effect that the projects they created or supported failed to achieve, and implementing a subsequent systematic burn of the coins bought out to reduce supply that may in the future lead to further loss in value of cryptocurrencies.

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Many investors are bold enough to deal with the risks involved when it comes to handling losses as a result of the swings in the business cycle, but not many of them like to deal with the uncertainties of a dead end.

Cryptocurrency investment sounds good as long as you have the assurance that all you need to do to recover lost value is to wait, but it doesn’t sound very good once you know that the death of projects suddenly snatches all hopes away.

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CoinJanitor will make your portfolio kick again with signs of life. If you are curious and would like to check this project out, kindly follow the links below this post.