Shitcoin: What Is a Shitcoin and Why Don’t You Want It?
By | Updated January 7th, 2022
What does shitcoin mean?
A shitcoin is a cryptocurrency that has little to zero value. A shitcoin may have been memed into brief popularity and then abandoned. A shitcoin may also be any altcoin introduced as a failed cash grab. Like its name implies, you don’t want shitcoins in your wallet.
What Is a Shitcoin?
As you might imagine, the term “shitcoin” is not a positive one – and no, it’s not a penny that you used to scrape whatever your dog ate yesterday off the bottom of your Keds.
In the simplest terms, a shitcoin is any token that is not worth owning. It’s the Zimbabwean dollar of the crypto world.
After Bitcoin’s meteoric rise to success, many aspiring blockchain developers began creating their own altcoins. Several of these devs weren’t acting in good faith, seeking only to capitalize on the investment world’s latest craze. Others genuinely intended to introduce the next BTC, only to fail for one of the thousands of reasons an idea never takes off.
In either event, these devs wound up creating … shitcoins.
How Do Shitcoins Work?
Every token is available in limited quantities. Without scarcity, any commodity or currency becomes worthless. (Hence the difficulty of selling ice to Eskimos.) But when demand for a token is so low that the number of them available does not impact its value, it becomes worthless – i.e. the defining characteristic of a shitcoin.
Shitcoins typically met with some investor interest upon their introduction to the Defi scene. Most of these investors bought significant quantities of the soon-to-be-shitcoin, thus spiking its market value, only to dump it almost immediately in order to realize short-term gains. Whoever is left holding those tokens once they have become worthless got the short end of the shit stick.
Alternatively, bad faith devs may introduce a soon-to-be-shitcoin in order to dupe investors. They often hype up their worthless token on forums and social media – i.e. memeing – and then abandon it like the shitcoin that it is.
But take care! Not every new token is destined to become a shitcoin. Only time can tell for sure.
Its name alone is probably enough to dissuade you from intentionally purchasing a shitcoin. To avoid getting stuck with a shitcoin, be wary of newly introduced tokens that appear to be gaining traction – they are very likely going to plummet in value after the initial surge. Also, treat any party trying to sell you an unheard-of token with extreme suspicion!