The market needs a sustainable mechanism to take care of dead or failed coins. We might have found one.
One of the most contentious issues for observers of cryptocurrency markets, especially the critics among them, is the fact that the barrier to entry into these markets seems to be low. From their perspective anyone with a half-baked idea can launch a coin and get some kind of following. With the hype that rising Bitcoin prices created over the last year, this can become a trap. Newcomers pour funds or other resources into coins thinking that they might just strike gold with the “next Bitcoin”. Arguably, this could create a bubble. Some say we already are in bubble territory, with a wealth of new ICOs flooding the markets, while older coins that are essentially useless as a medium of exchange, store of value or even as utility tokens, pile up. The market does not have a mechanism to deal with this.
Nevertheless, a mechanism that can recycle value within these failed coins while it decommissions them, is exactly the kind of idea that would make markets healthier and would take the argument away from those critics. Such a mechanism can show observers that cryptocurrency markets have the ability to take care of themselves in the absence of regulation, and that not all the value that has been relegated to oblivion is lost beyond recovery.
What is the Solution?
Creating such a mechanism however can be extremely challenging. After all, achieving a consensus on which coins should this mechanism recycle, agreeing upon the circumstances and designing the appropriate mechanism to do it is quite difficult. Any such mechanism or recycling project is bound to fall far away from the ideal solution because:
- It is likely to be centralized or suffer from consensus paralysis.
- Many might view it as an attack on smaller coins.
- The recycling effort requires funding which is difficult to obtain.
When it comes to recycling relegated value trapped in failed coins while simultaneously decommissioning them, a lot of pragmatism is needed. The most important task that any such recycling mechanism should fulfill, is to deliver benefits to everyone involved, including cryptocurrency markets in general. Keeping those basic principles in mind, CoinJanitor is the first project out there to produce a sensible recycling mechanism for failed coins that will benefit every party involved.
CoinJanitor will allow holders of failed coins to restore some of the value they have trapped in them and use it, while it delivers benefits to the markets by reducing market dilution when it decommissions those failed coins. In the process, it will create a new community by integrating all the holders of failed coins under its umbrella and it will fund the recycling effort through the creation of a token that will be used to buy failed coins out.
A pragmatic approach allows CoinJanitor to create a whole new economy centered around the decommissioning of failed coins, while at the same time opening the discussion about them. Although it might be criticized for not delivering on an ideal, decentralized mechanism that achieves consensus in record times, CoinJanitor will be the only mechanism available in the market to take care of this problem. This project will take the argument away from critics that view cryptocurrency markets as a bubble because the barrier of entry for a coin is so low that it creates bubbles.
The First Step
CoinJanitor is the first step to address this problem and work towards a systematic approach to remove failed projects from the space. This project dared to open that debate despite the challenges involved in being the first and only project out there to have the initiative and the pragmatism necessary to solve the problem. CoinJanitor will go beyond theoretical discussions on social media and it will evolve with the market to cater to its needs in the future as well. The CoinJanitor team understands the need to implement the mechanism and evolve with the market, but most importantly they are up to the challenge. CoinJanitor will be the first project that shows cryptocurrency critics that no authority is needed to regulate or to intervene in the markets when the people in the space are willing to tackle the issues with a grassroots initiative.