Digital currency experts consider shitcoins to be alternative currencies that have no particular function. These coins have no products and are not attached to any specific service. As a result, shitcoins are very often rendered useless after some time has passed.
There is no real purpose to the coins. They are designed simply for profit-making purposes in the crypto market. Therefore, shitcoins often experience what is regarded as “pump and dump” in the crypto market.
Pump and Dump is a term used to refer to the purchase of a digital currency hoping that its value increases. However, with a significant increase in the token price, investors quickly sell off the token and take profits which results in a fall in value. The act of pumping and dumping coins are bad because investor loses money from this practice.
We will talk more about this in our special article on crypto scams
Shitcoins can be identified by following a specific model.
Upon launch, a shitcoin will likely gain some attention, but its price will remain low. As other investors begin to buy that digital currency, however, the price will increase very quickly. Then, investors sell their coins to make short-term gains, causing a huge price drop and a loss of money to many other investors. So, you can buy a shitcoin at $10 per coin and the price can fall as low as $0.01 making it very worthless to you
Most times, the price increases for shitcoins are driven by hype and strong campaigns by creators of the digital token.
So how do shitcoins work?
In simple terms, shitcoins function like every other Altcoin and Bitcoin. However, shitcoins usually fall under the digital tokens section of altcoins. A digital token is an altcoin created and operated on a different crypto platform.
Users can transfer shitcoins from their digital wallets to another person’s wallet using their private keys, just as they can with other altcoins. In addition, shitcoins record their transactions through public ledgers as well. There can be no alteration or denial of these records, as they are permanent.
A foremost example of a shitcoin is the Safemoon coin. However, this shitcoin has gained worldwide acceptance despite having no specific use or attachment to any product.
Some other popular examples of shitcoins are Shiba Inu, Baby Dogecoin, Safemars, Panda Coin, Leash Coin, and many others. Early investment into shitcoins can reward investors with large amounts of money. However, late investors usually lose their money when price dumps.
In our next series of articles, we will look at how you can purchase some other valuable cryptocurrencies like Bitcoin and Ethereum.