Would you invest in a digital currency called "WhopperCoin"?
The announcement last week by Burger King Russia (NYSE: QSR) of this dubious new digital asset inspired us here at Money Morning to make a comprehensive list of cryptocurrencies with curious names and ill-conceived objectives.
WhopperCoin is basically a rewards program that uses a newly created cryptocurrency instead of a more straightforward rewards card. Customers earn WhopperCoins whenever they make a purchase. When you accumulate 1,700 WhopperCoins, you can use them to buy a "free" Whopper.
"Now Whopper is not only burger that people in 90 different countries love – it's an investment tool as well," Ivan Shestov, head of external communications at Burger King Russia, said in a press release. "According to the forecasts, cryptocurrency will increase exponentially in value. Eating Whoppers now is a strategy for financial prosperity tomorrow."
And if you believe that, I've got a bridge I'd like to sell you in Vladivostok.
While it's true that a few of the better cryptocurrencies will rise dramatically in value, it's extremely unlikely that WhopperCoin will be among them.
But the rapid rise in the value of the leading cryptocurrencies – Bitcoin is up 700% and Ethereum is up 4,600% in 2017 alone – has created a "gold rush" mentality.
Most of the "oddball" cryptocurrencies we'll look at today are certain to fail.
You won't believe some of these are even real…
A List of Cryptocurrencies Investors Should Avoid
- InsaneCoin: You'd think the name would scare off investors, but InsaneCoin has a market cap of nearly $2 million, good for 357th place on CoinMarketCap's list of more than 1,100 cryptocurrencies. The current price is about $0.12. While the website touts several improvements it has made to the open-source Bitcoin code, it's vague on what people are supposed to do with it. From the InsaneCoin website: "InsaneCoin is more than just a coin, it is a happening… a state of mind. You don't have to be insane to be part of our community but it sure couldn't hurt."
- Dogecoin: This cryptocurrency, created as a joke in 2013, was based on the popular Internet meme (the "doge" was a Shiba Inu dog). It was created for no other purpose, yet refuses to die. Astonishingly, Dogecoin sits in 38th place on the CoinMarketCap list with a total value of $219 million.
- Dentacoin: This cryptocurrency debuted over the summer. While Dentacoin's creators have lofty goals of "improving dental care" and "making it affordable," it's essentially a glorified rewards card. Like many ultra-specific cryptocurrencies, Dentacoin is a solution in search of a problem. Each token is worth a mere $0.00183, but the market cap of $2.96 million puts it in 315th place on CoinMarketCap.
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- TrumpCoin: Launched in February 2016, TrumpCoin was created originally as a trendy way to raise money for Donald Trump's presidential campaign. Now the goal is "to support President Trump and his vision to Make America Great Again" by supporting various causes and projects. (President Trump has no connection to the coin.) It's unclear why a cryptocurrency is required for this.
- PutinCoin: Why a PutinCoin? The website says, "PutinCoin was created to pay tribute to the people and the president of one of the largest and greatest country[sic] in the world: Russia!" The site has less to say about the functional purpose of PutinCoin, other than to "support the very fast growing Russian economy." PutinCoin may want to watch its back, however, as Russian Deputy Prime Minister Arkady Dvorkovich suggested two weeks ago that officials are discussing the creation of a state-backed cryptocurrency.
- EarthCoin: You'd think this coin would have something to do with saving the planet. But the EarthCoin website seems more concerned with libertarian principles. In particular, it rails against the evils of fiat currencies – it even quotes legendary U.S. Federal Reserve foe Ron Paul. It's intended to be "a coin that represents us all" – whatever that means. With a market cap of $11.5 million, EarthCoin ranks 197th on the CoinMarketCap list.
- MoonCoin: MoonCoin has specific features but lacks focus. It can do micropayments, has its own programming language, and – get this – can monetize things you like on social media. With "Smart Likes," just liking a company, place, or celebrity is all you need do to start earning MoonCoin. The current drawback, other than thin participation, is that MoonCoins have little value ($0.000062). Also not helping is the enormous supply of more than 222 billion coins (more than 10,000 times that of Bitcoin) and paltry demand.