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Vaporware is a deceiving crypto project. It overemphasizes the importance of a certain blockchain or crypto project even if the problem that it aims to solve is simple.
In its standard definition, vaporware is a product that overpromises but underdelivers.
Let’s understand more how vaporware applies to cryptocurrency.
Crypto Vaporware Definition
Vaporware in cryptocurrency refers to any cryptocurrency project or blockchain that does not have a functional product.
There are two reasons for this. First, the project is still under development. In this situation, the developers are not ready to release it. Second, the project is still in its abstract stages. This means that the developers have not worked on it yet but they already have the idea.
Companies or developers who promote vaporware often use decentralized apps (Dapps) as its main feature. They do their best to convince investors that the vaporware offers solutions to some of Dapp’s issues.
Blockchain as Vaporware
In a February 2020 article that BBC released, it seemingly called the blockchain technology as vaporware. According to the opinion piece, blockchain hasn’t fulfilled its full potential until now. Its usage is still centered around cryptocurrencies.
Many crypto experts strongly advocate for the integration of blockchain technology into real life. Nevertheless, there are still countless issues that its trustless nature encounters.
However, it has limitations once used for real world transactions. For instance, it is difficult to trust that the data entered by users in the blockchain are authentic. Participants can make various alterations to their college degrees, online voting records, medical histories, and even assets.
Even if the information stored in the blockchain is immutable, the problem comes from the possibility of inaccurate information. Another example is sales. To illustrate, people can store records of car sales in the blockchain. But, how do we know that the owner truly sold or turned over the car to a real buyer?
This is why the BBC article points out the blockchain technology’s tendency to become vaporware. It still cannot give concrete and feasible solutions to real world problems.
How to Spot Vaporware in Cryptocurrency
The problem with vaporware is that it is not too easy to detect. This is because overhyping is quite common in the crypto space. Well-funded projects from reputable developers can still qualify as vaporware if they turn out to be just hype without results.
Here are some ways you can protect yourself from investing in vaporware.
Research about the project and its developers. Conducting a comparison of various projects will show you if the teams behind the crypto projects are just focusing on marketing and campaigns to pump their prices.
Projects that are less likely to be vaporware should have a published roadmap that shows their timelines of accomplishing things to reach their end goal. Their deadlines should also reflect in their whitepaper.
Moreover, do a background check on the team member’s reputations as well. If any of them were involved in any suspicious activity in the past, that is already a red flag.
Check Their Websites and Social Media
Beware of cryptocurrency projects that flood their websites and social pages with flashy words and lofty goals. Cryptocurrency developers with good intentions use plain language to explain their objectives. They display a desire to pursue truth and do not confuse their followers.
Apply Critical Thinking
Take the time to fully understand the tokenomics of a new crypto coin or token. The inventors should have proper explanations about the solutions offered and how they will impact the market.
Learn to differentiate comprehensive explanations from exaggerated promises. Most vaporware projects often appear to have huge plans for the future, but most of them are just fancy words.
Any cryptocurrency project can become a vaporware if it is mismanaged by the team working on its development.
Many people have differing views on cryptocurrency vaporware and sometimes, even the already established crypto coins and tokens still become subject to the suspicion that they are vaporware.
As an investor, you need to be careful of all the crypto projects that are popping up. Don’t be too eager to invest money on new tokens right away. Research and reflect.
Beware vaporware CryptoCoin Believers!