Footprint | Can those fallen crypto stars in the bear market rise again in 2022?

Internet Computer, Bitcoin Cash, Ethereum Classic, NEO, EOS could not withstand the bear market in 2018. Can they rise again in 2022?

Mar. 2022, Grace 
Data Source: Footprint Analytics

New projects in the blockchain space emerge constantly. While it's a blue ocean, success is still rare. Once highly hyped projects now mostly fade away like small waves in the sea after the hype has passed. However, even in defeat, they still inspire those who come after.

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This article takes a look at the rising stars that failed to shine in the bear market of 2018. From tokens like Bitcoin Cash and Ethereum Classic, to public chains like NEO and EOS, and platforms like Internet Computer.

One Bitcoin Cash

Bitcoin Cash, BCH, also known as Bitcoin Cash. It serves as both a payment network and a cryptocurrency. As of March 9, it ranks 27th in the cryptocurrency market. Created in August 2017, it is a hard fork of the Bitcoin blockchain. On December 23, 2017, it reached its all-time high with a value of $3,923 per BCH. Its price generally fluctuates in a similar pattern to BTC.

Bitcoin Cash was created to increase the 1MB block size limit of BTC during its fork and has now achieved a maximum block size of 32MB. It can handle far more transactions per second than BTC and has lower transaction fees. However, in terms of market value, Bitcoin Cash has never been able to surpass BTC.

Why it didn’t work?

BCH continues Satoshi Nakamoto's vision by focusing on peer-to-peer support systems. It is commonly used for payments such as cross-border transfers. BTC, on the other hand, has evolved more towards being a store of value and is now considered digital gold, with its payment function gradually fading. The difference in the functions of these two coins naturally leads to a gap in value. BCH has not been able to surpass BTC due to its inherent positioning limitations.

The reasons why Bitcoin Cash has not been successful since the bear market of 2018 include not only its own positioning but also the impact of the Federal Reserve's interest rate hikes, balance sheet reduction, and the decline in the US stock market. It missed the optimal timing to surpass BTC.

With a new bear market on the horizon and political factors at play, BTC may face new downward pressure. BCH, as a peer-to-peer payment method, may see a greater need for circulation and payments. Many believe it could become the next big event, much like people's current views on Solana.

Two Ethereum Classic

BTC hard forked into BCH, and alongside BTC, ETH also has its own counterpart, Ethereum Classic. Despite being a network that combines ETH technology and BTC concepts, it has yet to challenge Ethereum's leading position.

The hard fork of Ethereum occurred in July 2016 to recover assets stolen by hackers from TheDAO. Vitalik Buterin, the founder, proposed the hard fork idea, resulting in Ethereum splitting into Ethereum and Ethereum Classic.

Ethereum Classic, abbreviated as ETC, ranks 34th in the cryptocurrency market. It has maintained the original vision and principles of Ethereum during the fork, with higher decentralization and community autonomy, but it only has 15% of the hash power support. Today, in terms of token price and ecosystem applications, it lags far behind Ethereum.

Why it didn’t work?

From the beginning of the hard fork, the original Ethereum founders and team left and supported the current Ethereum. Ethereum Classic was taken over by a new team.

In terms of support, during the Ethereum fork, 85% of the hash power supported Ethereum, far more than Ethereum Classic. The demand for Ethereum is also higher than for Ethereum Classic.

In terms of ecosystem completeness, Ethereum has become the leader in public chain TVL, while there are not many projects deployed on Ethereum Classic.

Therefore, despite Ethereum Classic's initial commitment to decentralization and community governance, it ultimately failed to become a prominent player in the blockchain world.

Three NEO

NEO, originally AntShares, is a public chain launched in China by Da Hongfei, Zhang Zhengwen, and the team in 2014. It was open-sourced on Github in 2015 and completed its ICO capital accumulation.NEO supports its own cryptocurrency, digital assets, and smart contract development, capable of processing thousands of transactions per second. This makes its token Neo a "thousandfold coin."

Neo saw a rapid rise in price. Initially sold at $0.08, it reached a peak of $198.38 on January 15, 2018, a 2,478.75% increase. However, as shown in Footprint Analytics data, there has been an evident overall downward trend, with the current price at $21.27.

Why it didn’t work?

The once "thousandfold coin" has fallen from grace to rank 77th in market value, relatively unknown. This is not due to external market factors but primarily to NEO itself:

• Inadequate code updates for NEO
• Almost stagnant ecosystem development
• Weak decentralization. Only 7 voting nodes, all deployed by the NEO official team.

As the saying goes, a weak foundation leads to a shaky structure. If NEO cannot address these issues, it may continue to be surpassed in the next bear market onslaught.

Four EOS

In May 2017, block.one introduced EOS as a smart contract platform and distributed operating system. It briefly became a strong competitor to the public chain king Ethereum in 2018. Ethereum faced transaction congestion, high Gas Fees, and the absence of sharding technology, leading to market doubts.

EOS differentiated itself by offering fee-less transactions and extremely fast transaction processing speed. In less than half a year after its launch, it surpassed Ethereum with 30,000 daily active users compared to Ethereum's less than 3,000, earning the title of "Ethereum killer."

Why it didn’t work?

1. Essentially a centralized public chain

This young "killer" ultimately failed to dethrone the king of public chains and instead succumbed to its own downfall.EOS's lightning-fast transaction processing speed came at the cost of decentralization. EOS's consensus mechanism involves 21 super nodes processing transactions, with small node operators unable to participate. Super nodes are elected by token holders, posing a risk of bribery.

While Ethereum and Bitcoin's POW consensus mechanisms are inefficient, EOS's Delegated Proof of Stake (DPoS) consensus mechanism is highly efficient. However, at its core, EOS is more like a centralized chain and cannot reign as a king in the decentralized world.

2. Weak ecosystem, lacking killer applications

Most active top public chains have their own phenomenal applications or popular protocols to support their development. For example, Anchor on the Terra chain. EOS lacks these. Although there are some scattered projects deployed, they have failed to spark significant interest.

While the EOS official team has expressed support for EOS's ecosystem development, as of March 9, the EOS chain's ecosystem still resembles a barren land. This directly impacts the value of EOS tokens, which lack solid support and are prone to collapse.

Five Dfinity / Internet Computer

Dfinity is a decentralized cloud computing platform. Founded in 2016, it received significant attention from venture capital firms. Despite the bear market of 2018, it secured a $102 million investment from a16z, the largest external investment by a16z that year.

Dfinity's vision is to create a more efficient, secure, and available public cloud computing platform than AWS, transferring control of the blockchain network to a distributed computing network. It was expected to launch the Internet Computer in the second half of 2018 or the first half of 2019, but the actual Alpha mainnet went live in December 2020.

Why it didn’t work?

Dfinity took over two years to deliver a product since its fundraising, and that product is not a unique market scarcity. The team's progress has been too slow.

• Regarding the goal of being the blockchain AWS, Alchemy, which provides blockchain development platform services for Web3 developers, was established in 2017 and now powers most blockchain companies globally.
• Github, a platform for source code hosting, has been around since 2008, and is used by the vast majority of blockchain protocols today.
• Allowing community-managed tokens for community governance has also been achieved in numerous projects.

Moreover, Dfinity's design concept is very appealing and highly decentralized. However, the gap between design concepts and reality is significant. Internet Computer has faced continuous delays, losing market trust to some extent.

Some Thoughts

Although the blockchain world is intangible, it resembles an undeveloped planet spinning at high speed. For all explorers, the opportunities are equal, and success is rare with no unified reference model. From the experiences of the five projects that once came close to success in this article, we can draw the following inspirations:

• Keep up with blockchain developments and deliver solutions to problems in a timely manner.
• Avoid excessive centralization and build a decentralized network.
• Unlimited freedom without boundaries is not true freedom, and absolute democracy cannot achieve true democracy. Exercise caution in community governance and maintain the rights design of a democratic structure.

This article is contributed by Footprint Analytics Community.

Footprint Community is a global cooperative data community where members use visualized data to create influential insights together. In the Footprint community, you can get help, build connections, and exchange knowledge and research on blockchain-related topics such as Web 3, Metaverse, GameFi, and DeFi. Many active, diverse, and highly engaged members motivate and support each other in the community, creating a worldwide user base to contribute data, share insights, and drive community development.