In what is believed to be a world first, a community project aimed at releasing the potentially enormous value currently lost or trapped in crypto-currencies that are no longer supported or developed, is set to make its international debut with an initial coin offering (ICO) in May.
The project, CoinJanitor, is the brainchild of former South African entrepreneur Marc Kenigsberg, who has been a passionate Bitcoin and blockchain advocate since 2013 when he founded (as a hobby) bitcoinchaser.com.
According to Kenigsberg, who now lives in Israel, there are many more crypto-currencies than people realise - at least 4 500. The vast majority of these cannot be traded or sold. In fact, only around 1 400 crypto-currencies are listed on crypto-currency markets. The rest, many of which are no longer being maintained, are effectively failed or "dead" projects.
He believes the situation is only going to deteriorate as the creation of new crypto-currencies becomes progressively easier, driven by the rapid rise of Bitcoin and other crypto-coin prices.
"While a lower barrier to creation is a good thing, the lack of a counterbalance such as a threshold of utility can lead to a dilution of resources and a weakened market over time," he told ITWeb.
"People who created, supported or were otherwise involved with crypto-currency projects that are functionally dead, have all the value they invested in them trapped. They can't transact or trade these coins.
"However, this trapped value can serve as a source of growth for crypto-currency markets if it is freed. It will also be beneficial for those who hold these failed coins because it will allow them to join a new community that can achieve the network effect that the coins they hold failed to achieve," he explained.
CoinJanitor is being set up to "free" the value in the failed coins. It will take over failed projects and exchange CoinJanitor tokens (JAN) for the delisted coins.
To avoid being overwhelmed by demand, CoinJanitor will currently only consider coins for exchange if they meet certain criteria: they should be proof of work coins as opposed to proof of stake; be at least two years old; not traded on any crypto-currency exchange; and have a market cap of less than US$50 000.
Kenigsberg maintains that through this mechanism, value will be restored to individual users who can sell or trade their JAN, as well as to the community at large through the recycling of project assets back into the community.
The dead or failed coins acquired by CoinJanitor will be burned, and CoinJanitor will also disable or decommission the underlying blockchain.
In addition, every piece of code CoinJanitor acquires from these projects will be added to an open source 'blockchain library' that can be accessed by any member of the community to use for any goal they choose, such as for future project development or for academic purposes.
"By reducing resource dilution in the market, CoinJanitor will contribute to the network effect of functional coins, more effectively leverage fragmented communities and implement a mechanism for the recycling of spent resources back into future projects.
"As a result, CoinJanitor will also benefit from network effect and create a highly engaged, loyal community of coin-holders working towards the improvement of utility and value in the crypto-economy," Kenigsberg concluded.
Share