The crypto business landscape has its unique sets of narratives. It takes more effort on the part of businesses and entrepreneurs to transition into the crypto industry and subsequently record successes. As such, there are several instances when crypto businesses had failed the litmus test and crashed even before launching. However, in this category, we will cast the spotlight on crypto websites that had positive impacts in the crypto space and, for one reason or the other, had to shut down. We believe that the stories of these fallen crypto websites are worth mentioning on our platform and that their demise is a telling sign of the complexities of running a crypto business.
What Site Does Cryptolinks Consider as Fallen Websites?
For this review section, we have handpicked websites that had at one time or the other provided services and products to crypto participants but are no more operational. Furthermore, we have streamlined our review methodology to strictly acknowledge websites that had generated some level of buzz or recorded significant success before shutting down. This move became necessary due to the vastness of the list of crypto websites that had launched and closed up shop since bitcoin emerged. Hence, we have restricted our attention to their hay days and the aftereffects of their demise.
What Are the Reasons Why Crypto Websites Shut Down?
Several factors could force crypto websites to become non-operational. For this review category, we will focus on the prevalent factors that could force a crypto website to shut down. They are:
One of the prevailing narratives in the crypto space is the uncertainties surrounding crypto regulations in a majority of regions. While a handful of countries have taken a proactive approach to enable a conducive environment for crypto businesses, a majority are yet to establish a comprehensive framework that will guide the activities of crypto entities operating from their jurisdiction. Due to the disparities of crypto regulations in different locations and the constant change in the interpretation of existing laws, crypto websites often have to reassess their business models.
For one, a website that provides services to clients from different countries must always revisit its policy and enforce new restrictions whenever one of its supported nations introduces new crypto laws. Sites that do not have enough resources to stay abreast of the emergence of convoluting crypto regulations will eventually have to shut down. This issue is even more potent with local crypto websites. These sites have no other option but to relocate to another base of operation or close up shop once their home country imposes a ban on crypto activities. Judging by the fact that the global stance on crypto regulation has remained a source of concern for crypto entrepreneurs, it is safe to conclude that several websites have had to put their business on hold.
The Lack of a Flexible Business Model
The crypto space is a very competitive industry. Therefore, crypto businesses must always be on the lookout for new trends and evolve accordingly. The fast-paced nature of the crypto space keeps entrepreneurs on their toes. Those who are unable to keep up will most definitely be left behind. And so, crypto websites must ensure that they rely on a flexible business model that can adapt to new trends seamlessly. For instance, consider how platforms like Coinbase have managed to expand their business scope effortlessly and take up new crypto sectors. You will agree that it is somewhat difficult to envision the crypto space in the next ten years without Coinbase.
On the contrary, platforms with rigid systems and a knack of sticking to the old ways of doing business might find it hard to nurture a long-lasting legacy in the crypto industry. In light of this, a majority of the crypto websites that are no longer operating today could not cope with the competitive terrain of the market and had to halt operations because they stopped innovating.
The Precarious State of Security
Without any doubt, security is one of the pressing issues limiting the growth of the crypto landscape. The digital nature of the crypto economy makes it attractive to cybercriminals and puts extra pressure on crypto websites to maintain institutional-grade security. Thus, crypto websites, particularly the ones offering custodial services, must budget a significant amount of their operating cost for security systems. The inability to do this exposes them to unimaginable risks that could subsequently have adverse effects on their reputations or force them out of business.
A prime example of fallen crypto websites that suffered a similar fate is Mt. Gox. At one point, this crypto exchange dominated the crypto landscape only for a security mishap to send it into oblivion. Just as Mt. Gox became extinct as a result of security lapses, countless other crypto websites have lost prominence because they could not enable impenetrable security systems.
Crypto websites either rely on donations or run a subscription/payment model to ensure that the website remains available. The money raised is the primary source of funds to maintain the site, pay employees, and carry out other daily tasks. If the expenditure consistently supersedes the website’s earnings, it is impossible to guarantee the smooth running of the platform. Hence, sites with poor finances are often prone to fade into obscurity. This assertion is more potent when the demand for cryptocurrency is low. It is almost impossible to separate the successes of crypto sites from the price trends of cryptocurrencies. During a bull market, it is rare for crypto websites to shut down. On the other hand, bear markets always have a devastating effect on crypto entities, especially those with unflattering finances.
How Did We Pick Our List of Fallen Crypto Websites?
As mentioned earlier, this review category focuses on websites that have stopped operating for one reason or the other. We only included websites that are worth mentioning. In other words, they must have impacted the crypto space in some way. In each review, we will analyze crucial details about the website, why it shut down, and what became of its legacy.