Invest in shitcoins or not?
All the investors out there or people who are wondering to invest in cryptocurrencies must be wondering what shitcoins means. And what if they are worth buying or not. But, as you know if they exist and circulate in the market, there must be a reason for sure. In this blog, we will try to understand what does the term shitcoins means. And what if should you invest in them or not. Also, we will see how shitcoins works and why people are buying them.
The term shitcoins refers to a cryptocurrency with little or no value or a digital currency that has no immediate and identifiable purpose. The term shitcoin is a derogatory word and is often used to describe altcoins, or cryptocurrencies, that were developed after Bitcoins became popular.
How shitcoins work
Interest in cryptocurrencies has increased significantly since Bitcoins were introduced in 2009. Their success has led companies to use blockchain technology to create their own altcoins as altcoins are the digital assets that carry the basic design of Bitcoin in tow. Developers generally announce how many tokens will ultimately be available: the supply of Bitcoin is capped at 21 million, while the supply of Ether is capped at 18 million per year.
Setting a bid limit creates scarcity, as investors understand that after a certain point in time, no additional tokens will be created. Theoretically, more tokens would dilute the value of your holdings, just as a new share issue can lower the value of a share.
When determining the supply of an altcoin, its value should depend on the demand. However, since most cryptocurrencies have limited practical use (buying and selling of real goods and services with cryptocurrencies is not yet common), their values are based on pure speculation. Therefore, a shit coin is something that people believe is valuable just because it exists.
Shitcoins become easy to identify as they follow a certain pattern. Although there may be some interest in a coin when it is tossed, its price remains relatively constant. But the price goes up exponentially in a short period of time as investors start to jump on board. This is followed by a nosedive caused by investors ditching their currencies to take advantage of short-term gains.
The development and commercialization of altcoins, which will one day be considered shitcoins, is unlikely to slow significantly while interest in cryptocurrencies remains high. Some governments, particularly in South Korea and China, have shown great interest in rooting out cryptocurrency mining operations, while others, such as Japan, have encouraged the use of cryptocurrencies in the broader market.
Why people are actively looking for shitcoins?
There are possibly many reasons behind this. Humans have a very important aspect that is their brain and it works non-stop. Our brain wants us to keep investing in something new just to take a chance of getting a good return. But as a responsible person, it’s always good to read about what you are investing in and what will it provide you in return.
Some of the reasons that people are investing in shitcoins are:
Some people are actively looking for the next bitcoin or rocket to the moon because they feel like they have missed the cryptocurrency boom. You see the BTC prices and how they have gone from pennies to thousands of dollars and you feel like you missed that train. If you look further down the list, there are new coins on the market and it seems like new opportunities! They cost less than a dollar and in some cases less than a penny! With a hundred boxes, you can buy many of these cheap coins. Just imagine a future where those coins turn into one more bitcoin and become super-rich and millionaires!
But with great reward comes great risk! You have to learn your lesson! If you are lucky, you will learn these lessons and become a smart trader who trades well, whether the market is going up or down. But the odds are against you. Human nature is against you. Emotions are against you. Everything is against you
And yet there is hope!
Lack of knowledge
The price of becoming a good trader is really very expensive. Nothing in the world of investing beats the knowledge you gain from your personal research on an asset. In fact, it is urgently needed.
Blockchain is a complicated and technical matter. There are many pieces involved and you should have at least some basic knowledge, such as the importance of circulating supply, market capitalization, and the price of these currencies. You need to know if they are degradable or pre-terminated. And also if the new coins can be minted in the future or not. shitcoins
Every precious commodity or metal like gold has a limited supply and that is what makes it so valuable. The same philosophy also applies to cryptocurrencies. With crypto, the founders determine the maximum bid rather than nature!
In some cases, developers decide to issue only a limited number of coins but keep in mind that the most important factor will always be market capitalization. [Market Cap = Price * Circulating Supply]
So, what’s the reason for a selected cryptocurrency which you are fascinated with?
Does it remedy real-global trouble? If not, neglect approximately it, and circulate it directly to the subsequent one. Note that, equal trouble might have extraordinary solutions. Likewise, some of the penny cryptocurrencies are probably seeking to remedy the equal trouble in extraordinary ways. You ought to weigh which one is better. shitcoins
Unfortunately, a maximum of shitcoins simply reproduction different cash, and with open-supply codes on GitHub repositories, it`s less difficult than ever to fork a coin. But a smart investor continually examines the GitHub repos to peer how plenty of improvement is happening. You can see the contributors, the celebs it received, the open troubles, and more. shitcoins
Pumps and Dumps
Artificially growing the rate of an asset after which promoting to make an income is understood as “Pump and Dump”. Doing so is unlawful in conventional inventory markets like NYSE and NASDAQ, however, it became a part of the exchanges withinside the early days.
As there’s no right law round penny cryptocurrencies, and as they`re developing like mushrooms day via way of means of day, a number of pumps and unload schemes hapen. Moreover, it is simple to govern penny cryptocurrencies as their rate could be very low.
Sometimes the crypto whale, who’s a dealer with large belongings and marketplace influence, takes element withinside the pump and unload schemes via way of means of transferring a massive bite of his belongings. Hopefully, there are robots tracking the public to be had Blockchain records and you could examine approximately them at the crypto information websites and subreddits.