What is a Shitcoin and which coins are labeled as such?

With the expansion of the crypto market comes the inevitable increase of scammers looking to take advantage of others with less skill. While most cryptocurrencies are helpful in some decentralized applications or blockchains, some have no actual worth. In the crypto community, a “shitcoin” refers to a worthless cryptocurrency.

How are shitcoins used?

Satoshi Nakamoto’s 2009 introduction of Bitcoin boosted cryptocurrencies’ appeal. Following Bitcoin’s success, other organizations are exploring blockchain technology. Several initiatives use digital money. “Altcoins” are alternative cryptocurrencies built on Bitcoin’s foundation.

Coin developers disclose token distribution caps. Bitcoin’s whitepaper includes a hard maximum of 21 million coins, while the Ethereum whitepaper limits the annual supply of Ether (ETH) to 18 million tokens.

This causes scarcity. Investors expect a token’s supply to decline. More coins than promised will diminish investors’ shares’ value. When a cryptocurrency’s total supply is capped, its price should fluctuate based on demand.

Since shitcoins are useless, demand is low. Speculation determines the token’s value. Despite having no actual worth, many people believe in shitcoins as they always look for the best Shitcoin to buy.

Which characteristics define a shitcoin?

Many shitcoins have a recognizable format. Initial interest in shitcoin’s token is expected, but its price will likely remain modest. Demand and low supply drive up pricing. This usually causes a value decline. This reduction is due to traders selling their tokens to take profit from short-term price changes. “Pump-and-dump” can leave abundant investors with worthless coins.

Shitcoins have a modest market capitalization. Due to the small market size, a few big investors can quickly boost the price.

Lack of purpose is a shitcoin’s defining trait. Bitcoin was designed to be used without a central authority or trusted third parties. Ether, Ethereum’s native coin, certifies transactions and protects the network. Shitcoins have unclear functions.

History and projects can help you detect a shitcoin (if it exists). Is this notion on another coin platform? Is this white paper plagiarized? If any of these concerns are contested, the cryptocurrency may be a shitcoin.

How should you investigate cryptocurrencies before buying?

• Carefully read the project’s whitepaper.

Whitepapers are the best way to spot shitcoins. First, look for a whitepaper’savailability. A shitcoin may lack a whitepaper.

Consider the whitepaper’s tone. A whitepaper should have flawless English. A cryptocurrency’s shoddy website or marketing materials are red flags. Top-tier coins invest in whitepapers.

Third, investigate the developers’ promises. Non-technical people rarely read a project’s whitepaper in its entirety. The individuals behind shitcoin know this and plan to capitalize by inflating the project’s goals, use cases, and roadmap. These recommendations’ technology remains unknown.

Too many photos is a red flag. Whitepapers should contain technical details about a project. Heavy-image whitepapers with few solutions should raise warning flags.

Study exemplary models to spot a poorly written whitepaper. Ethereum, Bitcoin, and Cardano all have excellent white papers.

• Keep your eyes out for warning signs in ICO.

Investors can buy a cryptocurrency through an ICO before it’s publicly distributed. If the ICO offers early investors a 30% discount or more, the cryptocurrency may be a shitcoin. Early investors can earn money by buying coins at a bargain and selling them immediately, which is higher than the ICO price. If the development team is confident in their coin, they shouldn’t need to incentivize token sales.

Another red flag is the absence of a product, source code, or demo. Researching project team members is also helpful. Do they use social media? A lack of profile activity is discouraging. A group that wishes to remain anonymous must be hiding something.

Places to get shitcoins

In the previous section, we said shitcoins are controversial. Because any alternative cryptocurrency is a shitcoin, it’s hard to say where to buy them.

Most have low market capitalization, making them less liquid on Binance and Coinbase. A coin must be reviewed thoroughly before being traded on a major exchange. Few shitcoins get there.

Popular shitcoins

Below are some of the most high-profile shitcoins currently trading on cryptocurrency platforms:

1. Dogecoin (DOGE)

Origin and Concept: Dogecoin was created in December 2013 by Billy Markus and Jackson Palmer as a joke to satirize the explosion of altcoins. It features the Shiba Inu dog from the “Doge” meme as its logo.

Popularity and Community: Despite its origins, Dogecoin has garnered a robust and active community. It’s known for its charitable activities, such as raising funds for the Jamaican bobsled team and various other charitable causes.

Endorsements and Media Attention: Elon Musk’s tweets have significantly boosted Dogecoin’s profile, contributing to sharp price increases and media attention.

Utility and Adoption: Although it started as a joke, Dogecoin has seen increasing acceptance for online tipping and small transactions, particularly on social media platforms.

2. Shiba Inu (SHIB)

Origin and Concept: Shiba Inu was created anonymously in August 2020 under the pseudonym “Ryoshi.” It positions itself as a “Dogecoin Killer.”

Popularity and Community: The coin quickly built a large community, leveraging the viral nature of dog-themed cryptocurrencies and the DeFi craze.

Features: Shiba Inu aims to build a decentralized ecosystem with its decentralized exchange, ShibaSwap. The project also introduced other tokens, like LEASH and BONE, to complement its ecosystem.

Speculative Investment: Much of SHIB’s price movement is driven by speculative investments, with significant price spikes following endorsements from influential figures and listings on major exchanges.

3. SafeMoon (SAFEMOON)

Origin and Concept: Launched in March 2021, SafeMoon aims to encourage long-term holding by implementing a transaction fee that redistributes tokens to existing holders and locks part of the fee in a liquidity pool.

Popularity and Community: SafeMoon quickly amassed a large following, driven by aggressive marketing and community engagement on social media platforms like Twitter and Reddit.

Criticism and Controversies: The tokenomics of SafeMoon, particularly the transaction fee, have drawn criticism and comparisons to Ponzi schemes. However, its developers emphasize its potential as a long-term investment.

4. BitTorrent (BTT)

Origin and Concept: BitTorrent Token was launched by the BitTorrent Foundation in 2019 after the acquisition of BitTorrent by TRON Foundation. It aims to tokenize the BitTorrent protocol.

Utility and Adoption: BTT is intended to improve the efficiency of file-sharing by incentivizing users to share files and resources. However, its practical utility and widespread adoption remain debated.

Popularity and Speculation: BTT gained attention due to its association with the well-known BitTorrent brand and TRON Foundation’s marketing efforts.

5. Elongate (ELONGATE)

Origin and Concept: Inspired by a tweet from Elon Musk, Elongate was launched in March 2021. The project aims to combine cryptocurrency with charitable activities.

Popularity and Community: Elongate quickly gained traction due to its humorous name and connection to Elon Musk, alongside its promise to donate a portion of transaction fees to charitable causes.

Charitable Contributions: The project has made several high-profile donations, which have helped boost its profile and attract a community interested in combining crypto investments with philanthropy.

6. CumRocket (CUMMIES)

Origin and Concept: Launched in April 2021, CumRocket aims to provide a blockchain-based solution for adult content creators and consumers.

Utility and Platform: The platform allows for the purchase, sale, and trade of adult content using its native token, CUMMIES, offering an anonymous and decentralized alternative to traditional platforms.

Popularity and Speculation: CumRocket garnered significant attention through viral social media campaigns and endorsements from influencers.

7. Hoge Finance (HOGE)

Origin and Concept: Hoge Finance is a deflationary meme coin launched in February 2021, where each transaction burns a portion of the tokens, decreasing the total supply over time.

Community and Engagement: Hoge has built a dedicated community focused on promoting the coin and developing additional use cases and applications.

Speculation and Investment: Much like other meme coins, Hoge’s value is driven by community support, speculation, and social media hype.

8. Akita Inu (AKITA)

Origin and Concept: Akita Inu is another dog-themed meme coin launched as a decentralized community experiment, often compared to Shiba Inu.

Popularity and Speculation: Akita Inu has seen price surges due to its low initial price and the overall trend of dog-themed cryptocurrencies gaining attention.

Utility and Adoption: Akita Inu lacks significant utility beyond being a speculative investment vehicle.

9. Kishu Inu (KISHU)

Origin and Concept: Kishu Inu is a meme coin that launched in April 2021, aiming to follow in the footsteps of Dogecoin and Shiba Inu.

Community and Marketing: Kishu Inu focuses on building a strong community and uses aggressive marketing strategies to attract investors.

Utility and Ecosystem: The project has launched features like Kishu Swap and Kishu Crate to build an ecosystem around the token, though its long-term viability is uncertain.

10. Baby Doge Coin (BabyDoge)

Origin and Concept: Baby DogeCoin was launched in June 2021, positioning itself as a cuter and smaller version of Dogecoin.

Community and Popularity: The coin quickly gained popularity due to its branding and endorsement from figures like Elon Musk, who mentioned it in a tweet.

Speculation and Investment: Baby Doge Coin relies heavily on its meme value and community-driven growth, with significant price volatility.

Conclusion

Investing in shitcoins is highly speculative and comes with significant risks. While some investors have made substantial profits, many of these coins lack fundamental value and can experience dramatic price fluctuations. It’s crucial to conduct thorough research and understand the potential risks before investing in any cryptocurrency, especially those classified as shitcoins.