How Much Do You Know About Shitcoin?
As you’ve no doubt noticed, shitcoins are a vast spectrum of the cryptocurrency market. While most of these tokens are created as jokes, some have legitimate uses and some are outright scams. To differentiate the good ones from the bad ones, it’s essential to perform due diligence. To help you identify a good player, we’ve listed some common characteristics of shitcoins.
The main characteristic of a shitcoin is its lack of clearly defined function. Unlike bitcoin, which is a secure, trustless, and censorship-resistant decentralized payment network, shitcoins have no specific purpose. Ethereum, on the other hand, is a coin native to the Ethereum blockchain, which serves as a security system and a means of validation. Binance Coin, meanwhile, is a token native to the Binance Exchange and powers the Binance Chain blockchain.
A shitcoin has a cult-like following. These coins are largely speculative, and their price fluctuates significantly. It’s no wonder that they often have wildly varying prices. Inflation-based shitcoins are a prime example. The price of a shitcoin can skyrocket and drop dramatically in a matter of seconds. Unlike regular cryptocurrencies, these coins are highly volatile, and they are only worth investing in if you’re willing to accept risks and risk losing a lot of money.
The main characteristic of a shitcoin is that it derives its value solely from its presence on the Internet. This causes a significant influx of investors who buy large quantities of them. Then, the price drops sharply once the investors cash out. As a result, a novice investor could be left with a bunch of worthless shitcoins. It’s a pump-and-dump phenomenon.
Another feature of a shitcoin is that it was launched after a successful cryptocurrency. It is an attempt to copy a popular coin but ultimately, has no useful purpose or longevity. The underlying cryptocurrency itself is not backed by any fundamentals and lacks any functionality or longevity. A shitcoin’s value ultimately disappears due to the lack of a clear purpose. But it’s also a waste of money.
Many new coins follow the same pattern, and as a new investor, you might think that everything related to cryptocurrencies is a scam. Fortunately, this is changing as regulators move to create stricter guidelines around these new digital assets. However, the question remains: how much money can a shitcoin pump yield before Congress wakes up? So, before you start your own cryptocurrency investments, make sure you’re doing due diligence and investing in the right crypto coins.
A shitcoin’s price usually follows a similar pattern. Initially, the price will go up exponentially, but subsequently nosedive as investors dump their coins, causing the prices to fall dramatically. This is especially problematic for new investors as they can easily be ripped off by scalpers or panic sellers. There’s no definitive guideline for identifying a shitcoin, but here are some guidelines:
In the cryptocurrency industry, a shitcoin is a cryptocurrency with no discernible purpose and little value. Many altcoins emerged after bitcoin and gained popularity. These coins are generally known for their short-term price rises and sharp falls. The value of these coins is often dependent on speculation and no real purpose. In other words, shitcoins are essentially worthless and unreliable. So, don’t waste your time on them.
A shitcoin’s white paper is essential for investors to evaluate its legitimacy. A shitcoin’s white paper should be difficult to understand and distinguish from other popular projects. If it’s filled with confusing jargon and is written in a language that is difficult to understand, it’s probably a shitcoin. However, if you’re unsure about the legitimacy of a particular cryptocurrency, you can always look for the following warning signs.