So 2017 was the year the public’s interest in cryptocurrencies really spiked . As at the time of this write up, coinmarketcap has a staggering 1429 coins listed and this number is sure to increase in the coming months. However, among this number is a sizeable amount of what is known in crypto parlance as shitcoins.. coins that add no intrinsic value to the cryptosphere in fact most of these coins have no working product or known use case though more often than not, they rake in a lot of money for their creators.
So what are the red flags that point them out? before i outline a few tips on how to identify the possibility of a coin belonging to the shitcoin club it is pertinent to state that they are exceptions to every one of these rules and that these rules are for long term holds, indeed it is possible to make money on nearly any coin in the short term depending on if you sell and buy and the right time. Also it is pertinent to note that there are going to be exceptions to some of these rules i.e some coin might have one or a couple of shitcoin characteristics but still turn out to be a great coin however, as stated earlier these are mostly exceptions.
So, what makes a potential shitcoin?
If the team makes promises they cannot keep. If a team says that you are guaranteed to make tons of money all the time from some coin, well that is simply not true. It is impossible to guarantee anything especially in the cryptocurreny market.
If the team behind a project is anonymous, and its a normal project ( it is understandable that many privacy coins may have anonymous teams while this might be okay however, its still fishy). There is no reason for any team to be private if they are doing a regular project unless they want to hide something.
No Whitepaper: This should be a big red flag, a Whitepaper details everything you need to know about the currency before making up your mind if you want to invest, purchase or use it. An idea may be great, it may be revolutionary, but with no whitepaper The project simply looks shady and un-serious at best.
No Working Product : This basically means that the coin hasn’t accomplished its main purpose.They just have a white paper that says that this is what they are trying to make.
The team behind a coin is not on linkedin and little is known about them; There's simply no reason not to be on linkedin or give info about the team unless there is something to hide.
No social media Presence: If a project wants to be the next big thing and doesn't even bother to have a social media page,i.e cant be found on the likes of twitter and facebook.
The Whitepaper is Ambiguous : If after reading a whitepaper, you still don't know what a coin is set out to achieve, then chances are that you are a reading shitcoin whitepaper. Many projects throw a lot of buzz words in their whitepaper all in an attempt to hide the fact that they offer nothing. If the layman can’t understand their product, that is likely a problem.
Look for details in a whitepaper- if the whitepaper just explains what blockchain and bitcoin are, then it is likely fishy. look for specific details.
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