At the height of the ICO bubble, it was common for project promoters to use big-name ads to pump their chips. Every day, we heard about a new company that would have signed a partnership with a global brand such as Microsoft or Google, to make us believe that these tech giants supported this idea. In reality, most of the time, it was just a trivial matter, such as allowing the project to use free services from the tech giant, as do countless things other startups. The tactic is still used today and crypto investors must keep in mind that this is not a guarantee of success.
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Big name pumping
As if cryptographic investors had not learned anything in recent years, some project promoters continue to try to push their chips with announcements about large-scale partnerships. These normal trade agreements can sometimes be used to suggest, insinuate or even irresponsibly predict the price increase of a related item. Businesses and startups enter into numerous cooperative agreements that do not constitute a guarantee of an agreement that will bring in more money or more users.
Moreover, this is not just misleading for investors – it can also be very detrimental to the projects themselves. Authorities around the world, such as US SEC and Chinese financial regulators, are actively seeking to create examples of IOCs and crypto-companies to tarnish the entire industry as a promoter of unregistered securities. Making grandiose partnership declarations in order to pump a token provides them with ammunition.
#TRON will be associated with a $ 100 billion megacorporation next week. It will not only benefit $ TRX but all TRC10 and 20 tokens, including $ BTT And $ WINNER etc. It will distribute widely #TRON Dapps and tokens to billions of customers. To come up. Make a proposal?
– Justin Sun (@justinsuntron) October 25, 2019
A notable recent example came from Tron's founder, Justin Sun. Last week, he tweeted about a deal with a $ 100 billion "mega-company" that will "take advantage" of Tron, Bittorrent and Wink's native chips. Many traders have reacted positively to the news by buying the coins, despite widespread cynicism on cryptographic forums about all the previous hype from Tron's founder. He revealed Tuesday that the company's blockchain is now part of the Samsung Blockchain Keystore software development kit, which means that smartphone app developers can create services running on the system as they already can with their main competitor, ETH.
High level partnerships are not a guarantee of success
Cryptocurrency investors should keep in mind that all companies in this ecosystem are very risky investments and there is no certainty that the ICO token or other digital asset in which you have invested will still be useful in two or three years. The absolute majority of technology start-ups in all fields do not survive, with a failure rate estimated by the venture capital industry of over 90%.
This may be despite an intelligent team, a brilliant idea or a great technological innovation. In the end, what matters to all businesses is if you have enough paid customers to cover your bills and make a profit. Otherwise, you only spend money from investors until new investments are made or you have to close. Partnerships that do not bring in new money or pay customers will not change anything.
In the field of digital assets in particular, with the lingering effects of crypto-winter, many projects that once seemed promising are now being forced to close. Platin, a recent example, is a secure proof of location proof protocol that encourages nodes to scale using its own token based on a chain of blocks. On Monday, the Medium team announced the closure of the company on November 1, 2019, after which all services would no longer be available. This despite all the recognition of the big names of the last two years.
"Japan has noticed that Platin has been selected by the Tokyo Metropolitan Government as one of the world's leading blockchain innovations. Germany has noticed that its start-up Autobahn has chosen Platin to present a proof of location to Mercedes Benz, Rolls Royce, Porsche and other giants of the automobile, "says the last letter of the team. "IBM has noticed that Platin has been chosen for its AlphaZONE technology accelerator. The European Space Agency noticed when it admitted Platin that it was part of the Galileo positioning system working group. EOS and Block.one noticed that they were investing in Platin and presenting our technology on the international stage. "
However, in the end, the founders explained: "One of the biggest challenges was how to keep moving forward as our resources ran out and turbulent market forces did not create stable environment in which to operate. We did everything in our power to extend Platin's operations as far as we could, month after month, without stopping in the face of great uncertainty. In addition to developing the visionary technologies of Platin, we worked hard every day to get the next round of financing, which always seemed to be close. Unfortunately, we could not arrive on time. "
What do you think about the big partnerships in the cryptography industry? Share your thoughts in the comments section below.
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