That last thing that anyone wants to do is invest money in a shitcoin right before it gets flushed down the toilet. This can be an absolute disaster and can really be discouraging. However it is very important to address because there are a lot of people who have lost and who will continue to lose money in shitcoin investments.
But what is a shitcoin anyhow? This is the first topic that needs discussed. Then we will be able to dive deeper into shitcoins and how you can avoid them.
What Is a Shitcoin?
A shitcoin is just as it sounds…. a shit coin which is a cryptocurrency that is equivalent to a piece of shit. However, people that invest in shitcoins are unaware of this and believe they have a bright and prosperous future.
This term made its way to the cryptocurrency space when the popularity grew and the money really started to pour in. It was at this time, the boom of cryptocurrency, that shitcoins started to pop-up everywhere. Some where made with the intentions to be shitcoins but were disguised as great new cryptocurrencies while others were created with the best of intentions but fell short in performance.
There is always going to be controversy surrounding what is and/or isn’t a shitcoin. Determining such is very subjective in nature. What some may call a shitcoin others may covet or hold onto dearly.
Criteria that should be met for before calling a coin a shitcoin include the following…
- No real use
- Poor technology
- Lousy development team
- Lack of innovation
- Forseen future problems
- And so on
Now a shitcoin doesn’t have to meet all of this criteria but the more the better. The more it meets the shitier it is.
But of course there is going to be a lot of disagreement among the cryptocurrency community here. What some people may thing is very innovative others may see as not so different from other coins. What some may see as a massive future problem others may see as a hurdle that can easily be overcome. This is why it is so subjective.
You will never find a coin that everyone unanimously agrees on as being a shitcoin. There will always be parties on both sides of the argument. There will be some coins where the majority of people claim it to be a shitcoin but even then there will be a group of believers, whom often times have no idea what is going on and are only in it for the money. Cryptocurrency scams like Bitconnect fall into this category because this scam in particular had a lot of believers who had no idea how anything was working but were buying in because it was making money.
The Smelly History of Forks and Shitcoins
No I’m not talking about eating shitcoins with forks here. Instead I’m talking about the forking of different cryptocurrencies and how this the term shitcoin often gets thrown around a lot in these situations.
If you are unfamiliar with what a fork is, it is basically when there is a disagreement with where the cryptocurrency project is heading which results in some of the developers deciding to change the code and fork off in another direction with a new but similar cryptocurrency.
You see this happening all the time. With Bitcoin there was Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond, etc. With Ethereum there was Ethereum Classic. Then you have forks that you might not even know are forks, such as Aeon which is a fork of Monero.
There is no limit to how much a coin can fork and when it can fork. All it takes is a disagreement with what should happen next where developers decide to go in different directions.
What usually happens before, during, and after a fork is that there are a lot of nasty words thrown about. The act of forking a cryptocurrency is no small matter. It can damage the reputation of such cryptocurrencies and developers usually only do this when they believe there is no way to come to an agreement. There is usually a lot of argument, name calling, hair pulling, and calling the newly forked cryptocurrency or the original cryptocurrency a shitcoin.
Often times you have great developers on both sides of the argument. You will have great devs that were all for the fork and then you will have great devs that were against it. In this case it would probably be logical to believe that neither is a shitcoin and that all the name calling is just coming from anger, frustration, and disappointment.
Tips for Avoiding a Shitcoin Catastrophe
Identifying a shitcoin can be rather difficult at times. As I mentioned, there are always going to be people praising each and everycoin online, even if it is one. Shitcoins are also popular for pump and dumps which means there will likely be a lot of people promoting the coin online.
So how do you know what to believe and what not to believe? Well there really is no good answer I can give you here. What it all comes down to is what you believe…. your opinion.
Do your own research
Go out and do your own research, collect your own information and don’t listen to only one source of info. Sites like Reddit and Bitcoin Talk are great ways to see regular people’s opinions on the matter while popular crypto news sites will only give you one opinion usually.
Reading over the official whitepaper for a cryptocurrency is also a must.
Ask yourself questions as you look into things. Is there a real use for this coin? Are there concerns about future problems? See if things make sense. It might be worth watching a brief overview video on Youtube to get a general understanding of things before doing all of this though.
Look into the developers
You must, at the very least, look into the developers behind the project a little bit. After all, the entire future of the cryptocurrency in question rests on their shoulders.
Look for devs that seem legit and appear to be in it for the long haul. Its not always cut and dry. Its not like you are looking for diplomas and awards. Some great devs don’t really have much to show so you have to use your better judgement here.
Cryptocurrencies have the need to evolve with technologies. They have the need to change as vulnerabilities and weaknesses are exposed. Because of this they need a dev team that is going to stick around and help keep the project moving forward.
What to Take Away From This
Just know that there are a lot of shitcoins out there but every coin that someone calls a shitcoin isn’t necessarily one. Its all about perspective. A shitcoin is what you say it is. The criteria mentioned above are not set in stone and should only be used as a guideline.
Navigating the waters of what is real and what isn’t can be difficult but if you do your due diligence and keep a level head on without getting too caught up in how much money you can make then you will be fine.
As always… leave any comments or questions below and I’ll get back to you soon 🙂