If you spend a day in crypto, you will hear the term “shitcoins” multiple times, with everyone telling you not to invest in them.
Everyone seems to hate them, yet their number and market values keep increasing every day.
As old ones die or lose their initial hype, new ones with different tokenomics replace them and the show continues.
In this post, I will be sharing with you everything you need to know about shitcoins and why you should not invest in them.
We will be looking at what qualifies a cryptocurrency as a shitcoin and examples of shitcoins out there.
After reading this post, you would be able to identify a shitcoin by yourself and decide whether to gamble your money with them or not.
What are shitcoins?
Shitcoins are cryptocurrencies with no value or good economic purpose for existing.
They have no noble purposes and are created to be meme (joke) coins or pumped and dumped by the founders.
Characteristics of shitcoins
Below are the four major characteristics of shitcoins:
1. No value
Most shitcoins have no value.
Their prices or market capitalization are negligible due to little to no investors interest.
This lack of value is usually because the developers do not have enough hype power and marketing resources to attract new investors or the coin has been pumped and dumped already.
This is what the price of some of your shitcoins look like “$0.000000000055”.
2. No real-world use cases
Some shitcoins have good marketcap and reasonable prices but no real-world use cases.
Many of them will want to claim legitimate use cases such as being a payment currency but the world does not need another crypto CURRENCY.
So also is the over 11,000 different cryptocurrencies in the market. They all can be used as payment for goods and services.
So any new cryptocurrency whose only reason for being in existence is to be “yet another currency” is a shitcoin.
3. Structured like Ponzi schemes
Most shitcoins function like Ponzi schemes.
Their value is dependent on new investors buying the coin and their tokenomics are designed in such a way to:
- discourage selling,
- redistribute money from new to old investors.
- make the founders rich.
The system favours those who buy into the scheme early and take out their capital with any profit made before the hype dies.
4. Insanely high supply
Furthermore, shitcoins mostly have infinite or insanely high token supply.
Some of them come with a total supply in the billions, trillions, quadrillions, quintillions, sextillion, and infinity.
And because their prices are so low, you can buy billions of them with a small amount.
This seems to encourage people to buy the shitcoins, as it makes them feel good with that much many tokens in their wallets.
Eventually, everyone who didn’t cash out during the initial pump will be left holding a heavy bag of worthless tokens.
I know some of them try to burn tokens to create an illusion of lower supply but that’s just a gimmick and part of the hype mechanics.
Wouldn’t it have been easier to create a low supply ab initio than trying to burn tokens later?
5. Pump and dump
Shitcoins pumps (and dump) the hardest.
Early on, shitcoins pump really hard because of their promises of quick money and the team’s hype power and marketing efforts.
So new people rush in to be the first to put their money and hope to double or even x100 their investment.
Some lucky early birds may do exactly that.
But eventually, the founders and early whales will dump their coins on the market and everything will begin crashing faster than it went up.
It’s normal to see a shitcoin pumps 6,000% within 3 days and dump 99% in 3 hours or less.
This is the roller coaster some suckers paid for and got.
Shitcoins have no staying power. They cannot sustain their value let alone continue their ridiculous price increases.
That’s why if you ever catch yourself with a shitcoin and it’s pumping, the best thing to do is sell it immediately.
Then patiently wait for the dump that follows to buy more of it with part of the money if you wish to continue playing the game.
But don’t be surprised if it keeps dumping forever after you have bought the dip.
Because the bottom for a shitcoin is ZERO ($0). So never assume you’re buying the bottom. A shitcoin has no price floor.
Yes, I know some shitcoins like Doge can pump and dump repeatedly over many years, but those are exceptions.
It doesn’t make them less of a shitcoin.
Others may not have a strong enough community to keep resurrecting their shitcoins after the first few dumps.
6. Failed projects
Some coins started with strong use cases and a good business model and were even backed by a spirited team.
However, shits happen and the project fails to deliver and eventually turns into a shitcoin.
Either the team abandons the project or they have lost track so much that they’re merely surviving.
Doing one thing or the other to give the project a sign of life and hope.
Good examples of this type of shitcoins are Storiqa (STQ) and Money Token (IMT).
I was invested in these projects, back in those days but they’re now technically dead and special shitcoins.
These ones, you may have to forget about your money or cut your losses and move on to something productive.
6. Little to no development efforts or updates
A coin with little to no development efforts and updates from the team is a shitcoin.
Developers will most times abandon the project after they have gotten the money they want.
Or they are working on another shitcoin project, giving no attention to the old ones.
Slowly, the project would die.
They move onto a new shitcoin project and you lose money and cry in silence.
Any shitcoin that is left to die this way is also a scamcoin.
What are scamcoins?
Scamcoins are shitcoins that are created and designed to steal your money.
They are outright scams. And any money you put into them will never return to you.
Characteristics of scamcoins:
Airdrop token that you can’t sell or transfer them.
The most popular scamcoins currently just appears in your wallet from nowhere and they seem to be worth a lot of money.
You will find that they are listed on some decentralized exchanges like Uniswap, PancakeSwap, Quickswap, etc, but you can’t trade or transfer them.
Recently, most of them will direct you to their website where they will ask you to connect your wallet to be able to sell the free tokens.
If you connect your wallet to their smart contract, any real coin you have in it will be wiped (stolen).
Therefore, the next time you see a strange token in your wallet that’s worth some significant amount, ignore it. It’s a scamcoin.
Listed tokens that allow you to buy but not sell
You will find some tokens listed on popular DEXs that you can buy but you wouldn’t be able to sell afterwards.
Their smart contract is designed to accept only buy trades and no sell. So whoever buys them has lost their money forever.
Some of this shitcoins use the names and symbols of real existing coins to confuse unsuspecting investors.
That’s why, when adding a new token to trade on a DEX, make sure you get the token contract address from the official project website to be sure you’re not dealing with a fake.
Zero team effort or commitment.
Some scamcoins in this category that I have been involved in are NEKO and RCKT.
Both teams dragged investors through a lengthy process of inaction and minimal effort until all trading and liquidity for tokens dry off.
Yes! You can buy and sell these kinds of scamcoins but you will lose your money regardless.
NEKO was a farming token that dumps faster than an object respecting the laws of gravity.
RCKT was a deflationary, rebase, and staking token that punishes both sellers and buyers.
Both died very slowly.
And I consider them the most wicked of all scams as they take you through a long period with a maximum dose of hopium, emotional and psychological rape.
In crypto, we are used to high APRs/APYs.
And it can become easy to get blinded by the high staking, farming, or liquidity mining rewards, forgetting to ask where the rewards are coming and if they’re sustainable.
Those days, Bitcoinnect promised to pay investors 1% daily interest on their coins.
OneCoin had a similar program.
And both were some of the biggest scamcoins and Ponzi schemes ever.
Bitconnect (BCC) was one of the top 6 cryptocurrencies by market cap in 2017 before its inevitable collapse and subsequent extinction.
If the business a platform is doing does not explain how it is able to pay the returns it promises, it’s a potential scam or shitcoin.
Because the immediate and temporary gains, you make now will likely be wiped off when the platform finally collapses.
You need to ask questions and get satisfactory answers before investing your money in these high APR coins.
Where is the profit coming from?
Is it sustainable?
Can this platform grow further to be able to maintain what it’s paying as a reward?
What is the reward structure? Is it fixed, does it fluctuate randomly based on some formulas, drops by a certain amount or percentage at specific intervals?
Don’t put your money in because the APR is high. Otherwise, you may be buying the next big scammcoin.
These are only a few examples of scam coins out there.
There could be more. And new ones are being invented almost every day.
Stay vigilant and keep your greed in check at all times.
Why you should NOT invest in shitcoins
- Because it’s gambling, not investment.
That’s the first thing.
When you put your money into these shitcoins hoping to make some quick bucks, you’re gambling.
The chances of losing your money are higher than any potential profit you could make.
However, if you decide that this is what you want to do with your hard-earned money, go ahead.
After all, many people have made a lot of money with shitcoins and you could be the next success story.
Or one of the many more who lost their money and is too ashamed to speak out.
Good luck with your gambling career though.
- The game is rigged against you
The developers of these shitcoins have already secured a nice bag for themselves before listing.
All other gamblers are only helping to help them pump their bag.
When they have made enough money, they will dump the coin on the market and tank the price.
You can’t beat the devs to this game, because they conceived the idea and control all the factors.
The way this game ends, every time is, the developers make money off of suckers who came in hoping to get rich quick.
You’ll most likely only end up getting poorer quick.
- You’re helping fund scams and giving crypto a bad image.
Some people feel, “I will put only $20 or $100 into this shitcoin and see how it goes”.
it’s money they can afford to lose, so if they lose it, they move on, no questions asked, no tears shed.
And that’s the problem.
Remember, there are thousands and millions of others thinking this way, the developers of these shitcoins know it.
That’s why they will keep creating new ones every day to keep scamming people.
- funding the endless scams in crypto that’s giving the industry a bad name,
- giving regulators reasons to crack down on crypto and imposing unhealthy rules on even the legitimate projects,
- delaying mass adoption as people are scared of the many scam stories they hear about in the news.
Are these how you want to use your money to help the industry?
Stop giving these scammers your $20 or $100 and they will not have any more incentivizes to keep creating new shitcoins.
Examples of shitcoins
Here we’ll see some of the most popular shitcoins and scamcoins out there and why we consider them shitcoins.
Please note that some shitcoins categorisation is based on opinions.
Some people may not see them as shitcoins that they are.
In the end, you have to choose what is a shitcoin to you and what you consider a good coin for investment.
With that out of the way, let’s discuss some examples of shitcoins out there.
1. Dogecoin (DOGE) is a shitcoin
Dogecoin is a shitcoin with an unlimited supply whose only reason for existing is to make you laugh and be amused.
It was created as a joke or meme coin. Nothing more.
The fact it has gained so much value and made a lot of people rich in the over 10 years of its existence changes nothing about its shitcoin status.
Doge is now being branded as a payment cryptocurrency to give it some legitimacy but we all know the fact.
It’s a major shitcoin and mega Ponzi scheme that people seem to have fallen in love with.
2. Ripple (XRP) is a shitcoin
XRP is a shitcoin because nobody uses it for anything in real life.
The Ripple technology that banks use for international remittances does not require the use of XRP coins.
XRP is just a shitcoin that Ripple created for themselves and keep dumping on the market to fund their company.
It is the biggest shitcoin in the entire crypto market, in terms of marketcap.
3. Shiba Inu (SHIB) is a shitcoin
SHIB is a copycat of Dogecoin.
However, instead of unlimited supply like DOGE, SHIB only has a total supply of 1 Quadrillion (1,000,000,000,000,000).
The SHIB Army, as they call themselves, believe that if Dogecoin can be a successful shitcoin, they too can.
And so far, they have made remarkable progress with their scheme. They have even gotten listed on Binance and Coinbase, that’s something.
Again, like their predecessor, Doge, the Shiba Inu team is trying to create some use cases around the shitcoin to elevate its status.
But we all know what it is, a shitcoin.
The stupid part is, instead of using SHIB in their so-called Shibswap DEX, they created 2 different new tokens to incentivize users.
Just to ensure that SHIB remains and dies as a useless shitcoin.
4. Safemoon (SAFEMOON) is a shitcoin
If you love tokens that make you high like highway overspeeding and drugs, SAFEMOON would be a good dose.
This shitcoin at least tries to trick your brain into thinking about safety and the moon.
The exact opposite of what it is.
This token has a maximum supply of 1 Quadrillion as SHIB.
Every buy, sell, and transfer transaction incurs a tax of 10%. 5% will.
Half of the tax is redistributed to all existing holders of SAFEMOON. And the other half is used to supply liquidity into the SAFEMOON/BNB pool on PancakeSwap.
So immediately you buy SAFEMOON, you get a drawdown of 10%.
That means that the token needs to rise by at least 11.1% for you to break even.
5. Safemars (SAFEMARS) is a shitcoin
SAFEMARS is a clone of SAFEMOON. The only thing they changed is the tax percentage.
instead og the 10% SAFEMOON charges you, SAFEMARS charge only 4%. Gives 50% to exiting token holders and puts the remainder into the liquidity pool.
There are many other shitcoins with such tax features. They all end up getting you fucked up, eventually.
Other shitcoins worth mentioning are Ethereum Classic (ETC), Litecoin (LTC),
Some of these have little to no real utility or technology, but they have a fairly large marketcap and price.
Their value and continued existence are based purely on market irrationality and speculation.
They lack the utility and a working product to explain their market value.
And when real adoption comes and the crypto market matures their big names alone cannot keep them alive.
Only working products backed by a solid team, and a token with real-life use cases will survive in the long run.
There are over 12,100 different cryptocurrencies in the market, according to data from CMC, and most of them are shitcoins and scamcoins.
They usually come with the loudest noise and a hyperactive community whose religion is HODL.
They talk mostly about buying more, marketing, and getting in more new buyers to keep the price of the token rising.
Some shitcoins like Rich Quack don’t even hide the fact that they’re Ponzi schemes.
They tell you categorically that you will not make money if new people do not join the scam.
So you join in promoting the scam to your friends or lose your own money and some suckers are willing to do this.
But you’re not a sucker, and that’s why you will not promote or gamble your money on these shitcoins.
In this post, we have examined what shitcoins and scamcoins are and why and how to avoid them.
We have also discussed some examples of shitcoins and scamcoins so that you can easily identify them yourself with any new project you come across.
Some of them are so big that you will hardly accept that they are shitcoins and that’s the beauty of the scam.
For more insight on identifying shitcoins and differentiating them from good projects, check out my previous article:
How to perform a cryptocurrency fundamental analysis all by yourself.
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