Shitcoins as Another Type of Crypto Scam. What Are They and How to Avoid Buying Them?
Blockchain technology has provided an opportunity for anyone to create their own cryptocurrencies and tokens, as well as, unfortunately, shitcoins. However, it should be understood that not all of them will retain their value over time, especially, shitcoins. Looking back at Bitcoin, many novice traders buy new coins hoping that they will bring them excess profit.
Today we want to talk about shitcoins — coins with a small capitalization and lack of prospects, which can lead to significant losses, and also talk about how to avoid buying such coins, in other words, how not to fall prey to this crypto scam.
What is Shitcoin in crypto?
Being the first cryptocurrency, Bitcoin was able to grow to a global scale and become one of the most talked-about phenomena of our time. In addition, bitcoins mined 11 years ago brought their owners a profit exceeding the profit of any, even the most highly profitable traditional asset.
Namecoin was the first Altcoin born in 2011, around two years after Bitcoin. This marked the beginning of the process of creating new coins. The possibilities of creating your own cryptocurrencies attracted a huge number of users with different goals, views, opportunities, and ideas, among which were both enthusiasts and crypto scammers.
The term “shitcoin” is slang and defines a cryptocurrency that has neither value nor prospects. What criteria can be used to define a shitcoin? Not everything is clear here. For bitcoin maximalists, any coin that is not bitcoin is a shitcoin; for some, it is a coin that is not included in the top 100; and for some, it is a coin that has lost value over time. For this reason, we will not limit ourselves to any one factor and define “shitcoin” as a coin that:
- has low liquidity and trading volumes;
- lost value over time;
- has no technological and practical value;
- traded on crypto exchanges that cannot be trusted;
- has a very low value (<0.01$). Keep in mind that a shitcoin price is usually unbelievably low!
Why Shitcoins appear
Shitcoins can be purposefully created to benefit from user investment. Crypto scammers create coins and a website where they can be purchased with another cryptocurrency. Such coins are often presented as tokens of an innovative project and can be traded on some exchanges. After a rise in price amid the hype, the coins held by the organizers are sold, and users are left with devalued coins that no one needs.
Crypto fraud schemes can be varied and multi-layered. With each new cycle of growth of cryptocurrencies and hype, more and more sophisticated ways of earning money from users with the help of shitcoins appear.
In the case of crypto scammers, the coin is originally a shitcoin, but coins can often depreciate over time for several reasons. For example, after the ICO boom in 2017, many projects that launched their tokens were never able to implement their plans, whether due to lack of interest from users, high competition, or the irrelevance of the implemented ideas.
Shitcoins are also many of the joke coins created due to the hype and the rise in popularity of cryptocurrencies. Such joke coins are, for example, FuckToken, SexCoin, PutinCoin, and others. The shitcoins list is constantly growing. In addition, many users create coins simply because they can be created.
LATOKEN cares about its users and honest crypto enthusiasts and does everything possible to keep them safe when dealing with cryptocurrencies. LATOKEN is an international cryptocurrency exchange and IEO platform with over 1.5 million users across the world. That’s why you can trust this exchange and forget about the LATOKEN scam!
How to avoid buying Shitcoins?
It will not be possible to completely avoid buying shitcoin because it is necessary to know the future of a particular project. To reduce the chances of purchasing a hopeless coin, you need to study the selected project carefully. LATOKEN has more than once shared some helpful recommendations that should be considered when choosing coins to buy.
Check out these articles to stay informed and protected:
- How to Avoid Falling Victim to Common Crypto Scams
- How to Avoid Crypto Scams: Essential Tips from LATOKEN
- Checklist From LATOKEN: 5 Ways to Secure Crypto Assets From Scams
- Most Common Crypto Scams on Mobile Devices
If you want to learn more about safe crypto storage, check out our article “LATOKEN Review: essential rules for safe cryptocurrency storage.”
It is also worth noting that new tokens appear every day, and it is rather difficult to determine which project will bring value in the future, and which project is just another crypto scam. Therefore, only a detailed analysis and independent research will allow you to avoid buying a “promising asset with low liquidity.”
LATOKEN, an international cryptocurrency exchange and IEO platform with over 1.3 million users across the world.
LATOKEN, a leading crypto exchange, makes trading and payments easy and safe worldwide. LATOKEN brings trading and banking to blockchain technology to automate transaction processing and save billions of work hours per year. A single year after its initial launch, LATOKEN got over 850k downloads on Google Play and over 1 500 000 followers on socials. Entrepreneurs looking for funding can consider the LATOKEN IEO Launchpad. There are 240+ digital assets available for traders with the option to connect using RESTful or WebSocket APIs on the LATOKEN platform. In addition, LATOKEN is planning to launch its own NFT Marketplace.
LATOKEN does not provide investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like many other assets, cryptocurrencies are subject to high market risk. Please trade with caution.