In a recent article by Forbes staff writers Steven Ehrlich, Maria Gracia Santillana Linares, and Nina Bambysheva, the resurgence of Bitcoin has led to an increase in the value of blockchains, with over 50 of them now worth over $1 billion. Despite this, many of these blockchains have few users and little utility beyond speculative trading. Ripple Labs, for example, created the XRP cryptocurrency to revolutionize global money transfers, but it has not succeeded in disrupting traditional systems like SWIFT. Nevertheless, XRP remains one of the most valuable cryptocurrencies, with a market value of $36 billion.
Many blockchains, including Ripple, are considered “crypto zombies” because they continue to trade actively without a clear purpose. Some blockchains, like Bitcoin Cash, Litecoin, Monero, Bitcoin SV, and Ethereum Classic, are spin-offs or competitors to established cryptocurrencies like Bitcoin and Ethereum. These blockchains have minimal utility and struggle to attract users and developers. Despite this, they maintain high market valuations, with many investors holding onto these tokens based on their historical significance.
Other blockchains, such as Tezos and Algorand, have positioned themselves as challengers to Ethereum but have failed to gain significant traction. Despite reporting high transaction speeds and unique features, these blockchains struggle to attract users and generate meaningful revenue. In some cases, the market values of these blockchains are inflated based on the popularity of their creators, rather than the utility of the platforms themselves.
While the total market value of cryptocurrencies has surged, the vast majority of digital assets listed on exchanges lack utility or represent ownership in any tangible asset. Shorting zombie blockchain tokens is challenging due to the volatile nature of crypto trading and the inability to borrow significant amounts of these tokens for short selling. However, these tokens are still susceptible to risks and vulnerabilities, such as 51% attacks that can compromise the integrity of the blockchain.
Regulators have begun cracking down on crypto fraud and enforcing securities regulations on exchanges and tokens that operate without proper registration. Despite the billions of dollars stored in the treasuries of cash-rich blockchain projects, investors may struggle to access these funds in cases of fraud or misconduct. Overall, the rise of do-nothing blockchains underscores the speculative and unpredictable nature of the cryptocurrency market, warning buyers to exercise caution and conduct thorough research before investing in these assets.
