Would It Be Rewarding To Invest In The Shitcoins? Cryptocurrencies are known as coins, tokens, and virtual assets, and they have altered the theme of the financial service industry. If you flip the coin of cryptocurrencies, you’ll see another side that contains a category of digital currencies having low or no worth and that do not perform proper functions. Their existence is considered as a joke, or these are known as the quick-rich scheme, and sometimes for making fun of already going projects. Simultaneously, they are called Shitcoins. Coins like Bitcoin are traded via profit revolution, which has a meaningful purpose.
All the cryptocurrencies that do not perform up to the mark or face a failure, stay under the roof of Shitcoins. Without any identifiable cause, the Shitcoins are present in the market, and there is nothing for their backing. Shitcoins have no base, so their endurance is low.
Dogecoin is the best example of Shitcoins, which was branched out from Litecoin and developed for trolling purposes. It was launched as a meme coin, and its logo contains a picture of the Shiba Inu Dog Breed.
How Do Shitcoins Get Value?
Shitcoins are valued only by their presence. Once they are developed, investors surround them and gain profits by trading them when they are created. Large-scale purchases accelerate the value of these coins in a shorter period. After launching, their value touches the skies.
When the investors get all the benefits from these coins, their worth falls at the same speed it increased in the beginning. Once all the instant benefits are reaped, the values of Shitcoins remain unchanged. Sometimes, this trend of pumping and dumping results in unsettling the investors, and in the end, they have the holding of useless Shitcoins.
For example, the commonly known shitcoin, Dogecoin, derives its value from the tweets of Elon Musk, the richest man alive. The value of Dogecoin depends on the public consensus and backing of Musk. Besides this, Elon Musk is interested in receiving payments in the form of a cryptocurrency called Dogecoin as a test and trial.
Is There Any Trick To Identify Shitcoins?
The developers of Shitcoins try their best to hide the identity of Shitcoins, yet they display numerous crystal clear red flags.
Developers Are Out Of The Sun
If the Cryptocurrency Developers do not conceal their identity, they gain considerable trust from the public and assist in legalizing newly launched cryptocurrencies. In case of no revelation, developers are suspicious, and more likely, they will deceive people.
The Functionality Is Unspecified
The purpose behind the development of Bitcoin & Ethereum Blockchain was an advancement of De-Fi (Decentralized Finance) by eliminating the role of a central authority and making the transactions more safe and secure. Thus Bitcoins and Ether are valuable reserves because they provide utility to the crypto users. Shitcoins are useless, and they exist because it is the only thing they can do.
The Projects Are Across The Board
If any project promises you huge gains, but it lacks any clear-cut functionality, it is shitcoin. These projects are often located on free domains, are prone to typographical errors, and are designed accidentally sometimes.
Currency Holders Are Limited
It is mandatory for a legal currency that at least 300-400 individuals are holding it. If the coin holders are less than this limit, it indicates that the activity is suspicious and dangerous. And a coin that produces gains contains at least five to ten transactions every minute.
Liquidity Pool Is Not Up To The Mark
If a cryptocurrency is currently developed, it banks intensively on liquid reserves. Any amount less than 30,000 Dollars in liquidity is a bright red light that indicates the danger zone. The coin can also list an unrealistic discount of thirty percent, which is not feasible.
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Things To Be Considered Before Any Investment In Crypto
The presence of a whitepaper in any project shows its validation. In its absence, cryptocurrency misplaces its authenticity. You do not have to compromise on the whitepaper quality. If its structure is not professional, it contains typographical errors, and there exists no coherence in the ideas, its legitimacy becomes doubtful.
Promise Of Developer
Often, we leave out technical details because we consider them incomprehensible. It is customary for fraudsters to exploit this material and embellish it.
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It is concluded from the given data that investment in Shitcoins is just a waste of time and money, and a rational trader must stay away from these cryptocurrencies.