92% of Blockchain Projects Fail, According to New Chinese Study
The Chinese government has just completed the most comprehensive study of blockchain projects yet. The results: 92% of all projects fail.
Sizing Up the Blockchain Industry
Since inception roughly ten years ago, the blockchain industry has witnessed the launch of 80,000 projects, according to the China Academy of Information and Communications Technology (CAICT). Of them, only 8% are actively maintained while the remaining 92% failed with an average lifespan of 1.22 years.
CAICT big data executive He Baohong recently commented on the failure rate of blockchain projects at an industry conference in Guizhou city.
“(These projects) came out very quickly, but die quickly as well,” He said, as quoted by the China Money Network publication. “In this circumstance, governments globally are accelerating their efforts to establish unified standards in order to help blockchain projects to achieve real-life applications.”
Though startup companies are notorious for their high failure rates, certain industries are more vulnerable than others. Research from Small Biz suggests that information and construction industries are among the highest in terms of failure rates.
That said, it is generally believed that nine out of every ten small businesses fail, which puts blockchain projects in the normal range.
Blockchain Project Rankings
The Chinese government recently ranked global blockchain projects based on technology, application and innovation. The results, which were released May 17, concluded that Ethereum was the top blockchain prospect with a total index rating of 129.4.
Steem, Lisk, NEO and Komodo rounded out the top-five.
Meanwhile, bitcoin was ranked all the way down at 13, a reading that was immediately rejected by the coin’s backers. Perhaps more surprising was the fact that bitcoin was tied with Verge, a privacy-centric altcoin that has already been hacked twice this year.
Cryptocurrencies and digital tokens continue to flood the market. with hundreds of projects raising more than $5 billion this year alone. According to one measure, ICO crowdfunding topped $6 billion last year.
Funding has slowed in recent months amid investor fatigue and ongoing regulatory uncertainties facing new token launches. Officials at the U.S. Securities and Exchange Commission (SEC) have deemed all ICOs to be securities, which has complicated issuers plans to enter the world’s largest economy.
ICOs have raised over $700 million this month with three days left to go. Total funding amounted to just $561 million in April.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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