Over the past few years, the world has fawned over cryptocurrencies, but do they smell what’s cooking in the market? With over 4,000 cryptocurrencies in the world, there’s no way they are all worth something. Apparently, they have a name for a crypto that is meaningless and worthless. In 2021, some people made big bucks trading crypto. Others are just scams with no value. What’s their nickname? “Shitcoins”
What are “Shitcoins”?
‘Shitcoins’ are cryptocurrencies that are worthless and useless. In the crypto space, these are copies of other currencies that have not brought anything new to the table. Their goals are unclear. Unlike Bitcoin or Ethereum, shitcoins lack any form of functionality. As a result, they don’t last as long as other coins.
The risks of shitcoins
The market for cryptocurrencies has grown to over 4,000 in January 2021. But not all of them are at the same level as Bitcoin, Binance, or Tether. Stock market investments can be good or bad, and cryptocurrency investments can do the same. Stupid cryptocurrencies are created to profit from people who don’t do their research before hopping on the crypto bandwagon. Their value is purely speculative.
Shitcoins have caused hundreds to thousands of dollars in losses to many people. It can be very tempting to purchase cheap, lesser known crypto after hearing stories like that of Contessoto. Cryptocurrencies carry similar risks to the stock market as well. Research should always come first, and you should never invest more than you can afford to lose.
How to spot a shitcoin?
- Mysterious developers Projects should be run by trustworthy individuals, not a random group of strangers using false names. Would you buy stock from an anonymous group? Certainly not. By identifying themselves in videos posted on YouTube or Instagram, for instance, developers are presumed doxxed and much more reliable. Public knowledge makes scams much less likely.
- Big promises but no defined functionalities It is very easy to propose impressive sounding objectives. However, not every individual can provide a roadmap for how these objectives will be achieved. It is not trustworthy if a project does not define its functionalities.
- Copied or generic aspects A project’s website should be scrutinized for generic designs or free domains. An authentic, well-developed project has the sense of authenticity in it. Also, if the white paper looks the same as that of other popular projects, it’s probably an attempt to con people. If it’s written in such technical jargon that it’s hard to understand, it’s likely a scam.
- Check the number of holders. Invest in a coin that has a minimum of 200 to 300 holders, say experts. An un-healthy coin isn’t worth investing in because it doesn’t meet that minimum. A coin that’s healthy will have five to ten transactions per minute.
- Consider the liquidity pool. Most decentralized exchanges rely on liquidity pools as their backbone. Usually if the project doesn’t have at least $30,000 in it, it’s a shitcoin. It is a warning sign when the number is low, like a few hundred or thousands.
It is always a good idea to check multiple sources before you invest. If you are focused on the project’s website, or Telegram, you’re going to be met with attractive information.
Look at the Pros, but more importantly, look at the Cons!
I believe most coins are absolute shit. We’ve all fallen victim to them, and many reading this are probably holding onto some. Depending on how skilled the team is at marketing and advertising, you may even convince yourself it isn’t a shit coin.
Many people reading this still have shitcoins in their possession. Depending on the marketing and advertising skill of the team, you may even convince yourself it isn’t a shitcoin. As a rule, I avoid shitcoins because they usually don’t work in the long run, although I know plenty of people who would rather take a risk cheaply, and then profit on a bounce in the short term. It may work sometimes but to me this is too risky and unsafe.
Up until they can prove otherwise, all coins are shitcoins.
Good Luck and Happy Trading!