Unraveling the Mystery of Zombie Altcoins

Forbes has recently identified a list of 20 altcoins, each boasting a market value exceeding one billion dollars. Despite their impressive market values, these cryptocurrencies have been labeled as "zombie altcoins" due to their limited use in markets and lackluster transaction activity. Among the top zombie contenders are XRP (XRP), Cardano (ADA), Bitcoin Cash (BCH), Litecoin (LTC), Internet Computer (ICP), Ethereum Classic (ETC), Stellar (XLM), Stacks (STX), and Kaspa (KAS). These also include Theta Network (THETA), Fantom (FTM), Monero (XMR), Arweave (AR), Algorand (ALGO), Flow (FLOW), and MultiversX (EGLD). The list ends with Bitcoin SV (BSV), Mina (MINA), Tezos (XTZ), and EOS (EOS). 
 
A prime example of this phenomenon is Ripple Labs' XRP. When it first came onto the scene in 2012, it made significant waves in blockchain technology development. The brainchild of visionaries Jed McCaleb, Arthur Britto, and David Schwartz from Ripple Labs aimed to revolutionize global financial transactions by offering fast and cost-effective money transfers for banks worldwide. 
 
Ripple Labs began its journey by creating an impressive 100 billion XRP tokens and raising $1.4 billion through public sales; at its peak in early 2018, it had reached a staggering market value of $132 billion. However, despite its initial promises to disrupt traditional banking systems globally—something that would inevitably impact SWIFT's control over daily trillions worth of interbank transfers—Ripple's blockchain ended up being primarily just a ledger for recording XRP transactions. 
 
Today, even though XRP maintains an incredibly high market value ($36 billion at present day rates, making it the sixth most valuable cryptocurrency overall—fifth if we're just looking at altcoins), Ripple Labs continues to see low revenue from XRP transactions. Data shows that in the last year, XRP's network generated only $583,000 in transaction fees—a figure that reveals an eye-watering "price-to-sales" ratio of 61,689. 
 
According to Forbes, this phenomenon is not unique to XRP; there are over 50 altcoins valued at more than one billion dollars each. However, they all share one thing: they lack significant utility or widespread adoption beyond speculative trading. These types of coins have been dubbed zombie altcoins. 
 
Despite the existence of superior alternatives such as stablecoins, which offer effective international payment solutions, these zombie altcoins continue to exist, with daily speculative transaction volumes exceeding $2 billion. 
 
The fact that these so-called zombies can survive is largely thanks to substantial capital reserves that sustain operations despite their limited utility. For example, Ripple Labs holds $24 billion worth of XRP in escrow and has enough resources to keep going for years. 
 
Moreover, unlike traditional companies where strict regulatory scrutiny and shareholder examination would be typical occurrences, these cryptocurrencies seem somewhat exempt from accountability due to a lack of regulation allowing them to continue operating despite their minimal function within markets. 
  
However, it’s crucial for investors to remember that investing in any cryptocurrency, including so-called 'zombie' ones, always carries high risks due to volatility, and they should therefore conduct thorough research before making decisions.