What is Shitcoin (Type/Categories of Cryptocurrency)
Definition/Examples
- Shitcoin is not a real categories for any cryptocurrency but it is a way for investor to describe a cryptocurrency that has little to no value or potential.
- Based on Google Bard, 98% of all cryptocurrencies in the market is called or categories as a shitcoin. This was according to a study conducted by the University of California, Barkeley which analyze over 1000 type of cryptocurrencies and found only around 2% out of the 1000 cryptocurrencies had a real value and use case.
- Out of that 98%, 50% is a memecoin, 30% is utility token and the rest is exchange token and DeFi token.
- Some examples of a shitcoin is Meme Combat (MK), ApeCoin (APE) and Floki Inu (FLOKI).
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Different Type of Shitcoin
Memecoin
- As you guys already expect, a lot of memecoin is called a shitcoin. Memecoin dominate around 70–90% of cryptocurrencies in the crypto market.
- It was based on popular meme in the internet and it’s value is mostly drive by the community around it. You can know more about memecoin here.
Pump and Dump Schemes Token
- There are a lot of cryptocurrency out there that is vulnerable with the pump and dump schemes. This schemes usually work when a scammer artificial make a certain coin pump in price and then they will start to hyping it up in any social media.
- When peoples start to notice and invest in it, they will wait for the price of the coin to reach a certain level before they start selling it in a large scale leaving investor with worthless coin.
Rug Pulls Token
- Rug pulls on a certain crypto usually is done by its own developer or creator. This scam is executed when the developer start to release the token inside the crypto market and hyping it up for peoples to buy it.
- When peoples start to buy the token, the developer will shut down the project and disappear with the investor money.
Clone Coins
- This coin usually copy other popular cryptocurrency and they often does it without doing a major changes on the things that they copy.
- They usually copy the use case, the tokenomics, the development, and other important thing to mirror the success of the crypto that it copy. The changes that usually occur in a clone coin are sometimes only the name for that coin itself.
Other
- There are a lot of cryptocurrency that is also can be called shitcoin ranging from utility token to a governance token. It is usually highly noticeable if you look at the use cases for that token.
Why Do People Invest in Shitcoin
- I just don’t know why peoples in their right mind will invest in a shitcoin. But we are human after all and we tend to make a stupid decision and mistake. Usually a shitcoin investment is tend to relate with human phsicology itself.
- One of the reason peoples invest in shitcoin is FOMO. This usually will affect a beginner investor that don’t know anything about crypto. They will just invest in any crypto that they saw pumping in price without analyzing the reason behind it. The pump and dump shcemes and rug pulls use this phsicology trick to bring people to invest in their token.
- The weirdest reason that people invest in shitcoin is because it is fun. Think of it like this, imagine that I use a dollar to invest in any shitcoin and I can get a million supply of that shitcoin and even if it dump it will have little to no effect toward me. Can you imagine the excitement of having a million crypto with a 1 U.S. dollar investment. I can certainly imagine it because I almost does that myself.
Conclusion/Other
- What I can say is, shitcoin is a really bad investment for the majority of crypto investor ranging from beginner to expert.
- This is my advice to any people that want to avoid investing in a shitcoin, don’t fall into all of that fancy word shit that you might saw on any advertising of a cryptocurrency. What I mean by fancy word is, a long and complicated word that doesn’t mean anything on a certain ads about crypto.
- If we are not careful, this almost innocent looking thing called shitcoin can destroy the reputation of the crypto market as a whole.
Thanks for reading and as always keep learning more about crypto everyday.
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