Shitcoin, A Cryptocurrency With No Value: All You Need To Know.

The diminished value of a shitcoin is often due to failed investor interest because it was not created in good faith or because its price was based on speculation.

What is Shitcoin?
‘Shitcoin’ is the term given to cryptocurrency that’s useless and has no value. These cryptos were created as copycats currencies that have brought nothing new to the crypto space. Some well known shitcoins are Dogecoin (DOGE), BitTorrent (BTT), Dent (DENT), TRON (TRX), Shiba Inu (SHIB). Unlike Bitcoin or Ethereum, which came about with specific, defined purposes and innovative goals, shitcoins lack functionalities. For this reason, they don’t have the longevity of other coins.

How Shitcoins Work?
Interest in cryptocurrencies increased substantially ever since Bitcoins were introduced in 2009. A shitcoin, people say, is valuable simply because it exists. Cryptocurrencies have limited, practical use and their values are based purely on speculation.

Shitcoins are easy to identify because they follow a specific pattern. They can be a copy of another well-known coin or they can be a brand new project. There is no specific definition.

Although there may be some interest in a coin when it launches, its price remains relatively level. But the price increases exponentially over a short period of time as investors begin to jump on board. This is followed by a nosedive caused by investors who dump their coins to capitalise on short-term gains.

Risk Factor in Shitcoins
There are over 4,000 cryptocurrencies in the market. They can’t all be generating interest and money like the best performing ones, like Bitcoin, Binance or Tether. Many shitcoins are created to capitalize on people who are jumping on the crypto bandwagon without doing their research first. Their value is based on mere speculation, and are thus, low on research.

Many people have lost thousand of dollars while investing in shitcoins. The risk of investing in crypto are similar to those of investing in the stock market. You should never invest more than you can afford to lose, and you should always do your research first.

How To Spot A Shitcoin?
Mysterious Developer: If the developers have identified themselves by video on Instagram or Youtube, for example, they’re considered doxxed and much more trustworthy. With their appearance known by the public, it’s much less likely to be a scam. Shitcoins usually have dubious developers.

No Functionality: Anyone can come up with impressive-sounding goals and promises. However, not just anyone can provide the roadmap as to how those objectives will be accomplished. If a project avoids defining the functionalities, it’s not trustworthy.

Generis Aspect: If a project’s website looks generic or uses a free domain, that should be a red flag. Additionally, if the white paper is indistinguishable from that of other popular projects, it’s likely a copy made to trick people into feeling secure.

Number of Holders: Experts say any new coin worth investing in should have 200 to 300 holders, at a minimum. Any coin that doesn’t meet that minimum isn’t healthy and isn’t worth investing in. Similarly, any healthy new coin should have five to 10 transactions per minute.

Liquidity: The liquidity pool is considered the backbone of most decentralized exchanges. If the project you’re investing in doesn’t have at least $30,000, it’s likely a shitcoin. Low numbers like hundreds or a few thousand should be a warning sign.

No Investment is Better Than Bad Investment

Shitcoins are generally terrible investments according to Investopedia. They require huge risk and very rarely offer rewards. The majority follow pump and dump schemes where only a few “insiders” really understand the price dynamics. With no real value, after a pump and dump scheme, other investors are left with worthless cryptocurrencies.