What is a shitcoin and how to identify them?
Unfortunately, the world of cryptocurrencies is full of projects that have little future or that are simply scams.
That is why we see currencies have projects that falter in some aspect. These coins are known as shitcoins, and then we will talk more about it.
Cryptocurrencies were born just over a decade ago and despite the fact that at first it was believed that they would not have much of a future, the truth is that they have impressed us all. The growth they have had has been overwhelming, causing their prices to have grown a lot.
However, the price is not the only thing that has grown, but it has also done so in quantity.
Today there are thousands of cryptocurrency projects on the market and new ones appear every day.
The ease with which a token can be created has led many scammers to create their own. The number of projects with a currency that lack a solid and stable project are many.
When a token has little support, an unbelievable whitepaper, or gaps, this is known as shitcoin. These coins do not necessarily have to be born as a scam, but they are projects that never get off the ground.
How to determine that a coin is a shitcoin?
Although at first this may seem complex, the truth is that distinguishing between a currency with a future and a shitcoin is quite simple. However, to make the process much easier, we are going to give you some tips to identify them.
1. Beware of "miracle" investments
We all want to make money, however, you must bear in mind that you cannot get rich or make a big profit overnight. If you come across a project or coin that promises to make a lot of money in a short time, it is most likely a shitcoin.
2. Read the whitepaper carefully
Another thing that you should be clear about is the whitepaper of the currency, this is the "roadmap" that the currency will follow, in the event that the whitepaper seems unrealistic or is underdeveloped, you will be in front of a shitcoin.
Every serial project should have one that indicates what the purpose of the coin is.
In addition, you must include the roadmap that the developers will follow so that the price adds up, or at least, so that it can remain stable.
3. Visit the website
A coin website is going to give you a lot more information than you think. What you should look at first is the design of the site and how it is structured.
Again, a serious project is going to invest time and money in having a flawless website.
If the coin has a website that leaves a lot to be desired or that looks cluttered, chances are you are dealing with a shitcoin.
4. Meet the developers
Usually on the project website you should find information about the developers.
This is quite normal and helps build confidence in potential investors. This is not a really fundamental step, let's remember that even today no one knows what the real name of the creator of bitcoin is.
However, if you find this information on their website, this will be a huge plus for the coin. If you do not have this information, we recommend that you do more research before putting your money into the project.
5. Not everything that looks like gold is.
There are some projects, especially those that are designed flat out to scam people that may seem like serious projects.
However, despite what it may seem they are not and this is because many people invest a few hundred dollars to earn thousands.
So, it is recommended that you always inform yourself very well about the projects to avoid falling into the hands of potential scammers.
How do cryptocurrency scams work?
Shitcoin scams are becoming more and more common, especially today when cryptocurrencies and the world of NFTs are booming. Although there may be different developers, the truth is that the modus operandi is quite simulate.
The first thing is to publicize the currency, usually with false expectations about them. Once it is available for purchase, scammers wait for more people to take an interest in it.
The next step is to make the currency "explode" that is, it begins to rise in price abruptly. This makes unsuspecting investors see an investment possibility and put their money in. Finally, the person in charge withdraws the money and disappears.
This means that those who bought tokens and did not withdraw on time, end up losing large amounts of money. It is possible to make money with these shitcoins, but it is more of luck than strategy.
If you want to try your luck with them, go ahead, there are people who have made a lot of money. However, as a recommendation, it is always best to stay away from these shitcoins. Even if you can win some money, the risk is too great and the vast majority always end up losing.
Shitcoin Vs. Memecoin
Not all projects that falter or that look not very serious are considered shitcoins and there is another classification and those are memecoins. These are not junk coins, since they have a project behind them, but for the most part, these were created for a purpose other than scams.
One of the best known cases of memecoins is Dogecoin (DOGE) which is a coin with the photo of a famous internet meme. This currency is not one of the most expensive nor is it one of the most used.
However, it has been in the market for years and has weathered its ups and downs, making it a consolidated currency.
Another well-known memecoin is shibacoin (SHIBA), however these two coins are quite regularly confused with shitcoins.