Vaporware
Vaporware is a term derived from the field of technology 'software', which originally indicated a computer software product that has been announced, but which the developer has no intention of releasing any time soon or even ever. Within the world of cryptocurrency, this term has been adapted to describe cryptocurrency projects that have been announced and heavily promoted, yet, lack substance or feasibility of completion.
Understanding Vaporware in Cryptocurrency
In the crypto space, Vaporware refers to a project that makes big promises to revolutionize the financial system, disrupt industries, or fundamentally transform the internet. Yet, despite these flashy announcements and hype generation, the actual project is not technically solid nor ready to deliver on promises made. This results in disillusioned investors and users when the project eventually fails or does not materialize.
Examples of Vaporware in Cryptocurrency
- Petro: The Petro is a cryptocurrency announced by Venezuela's President Nicolas Maduro in 2017. Despite its disputed legitimacy and lack of prominent usage, it has been cited as a classic example of Vaporware.
- DAO: The DAO was a venture capital fund operating on Ethereum blockchain. It was supposed to be a decentralized autonomous organization but a major vulnerability was exploited leading to a huge loss of funds. Its launch and then spectacular failure has led it to being described as Vaporware.
Why Does Vaporware Exist?
The occurrence of Vaporware in the Crypto world is driven by a number of factors. The main ones include nascent regulatory systems, the complexity of blockchain technology, and the rapid funding boom in the form of Initial Coin Offerings (ICOs). The blend of these conditions creates a fertile ground for unscrupulous entities to launch projects that eventually turn out to be Vaporware.
How to Avoid Vaporware
While it can be challenging to steer clear from Vaporware, potential investors and users can safeguard themselves by:
- Undertaking extensive research on the team behind a project
- Analyzing the feasibility of the project
- Evaluating the project's transparency and communication
- Seeking the opinions of third-party experts