{"id":9045,"date":"2022-10-01T09:17:59","date_gmt":"2022-10-01T09:17:59","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9045"},"modified":"2022-10-01T09:17:59","modified_gmt":"2022-10-01T09:17:59","slug":"shitcoins-poopcoins-navigating-the-crypto-sewer","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/01\/shitcoins-poopcoins-navigating-the-crypto-sewer\/","title":{"rendered":"Shitcoins &#038; Poopcoins: Navigating the crypto sewer"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/mdr.foobrdigital.com\/wp-content\/uploads\/2022\/10\/image-9.png\" alt=\"\" class=\"wp-image-9046\"\/><\/figure>\n\n\n\n<ul><li>What exactly is a shitcoin?<\/li><li>What gives crypto value?<\/li><li>The shitcoin hype machine<\/li><li>The dangers of shitcoins<\/li><\/ul>\n\n\n\n<p>Decentralised. Unforgeably scarce. Backed by a committed developer community with a clear roadmap. These are the fundamental qualities that give cryptocurrencies value. None of these apply to so-called shitcoins, the crypto moonshots and meme tokens that, through humour and hype, are enticing waves of wide-eyed newbies in the hope of making fortunes. What place do shitcoins have in the crypto ecosystem? Are they an inevitable consequence of speculation, that should be tolerated, or a dangerous problem for the wider crypto industry that will lead to calls for consumer protection?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What\u2019s a Shitcoin?<\/h2>\n\n\n\n<p>Considered a pejorative by some, an affectionate term by others, shitcoin is the name typically given to cryptocurrencies that are hyper-volatile even by crypto standards \u2013 a consequence of the fact that they rarely have any real-world purpose or utility beyond provoking a chuckle and hustling newcomers to crypto.&nbsp;<\/p>\n\n\n\n<p>Shitcoins &#8211; also referred to as Poopcoins &#8211; are often inspired by memes and place a major emphasis on iconography &#8211; or less politely, style over content.<\/p>\n\n\n\n<p>Shitcoins are clearly self-deprecating, and often make no attempt to hide their lack of true function. Zooming out, you can view shitcoins as one symptom of a wider phenomenon of financial desperation within a lost generation that finds a voice through social media. It overlaps with Wallstreet bets &#8211; where losing is a badge of honour &#8211; and a kind of new financial kamikaze attitude epitomised by the Yolo mantra.<\/p>\n\n\n\n<p>The best-known example today is Dogecoin (DOGE), a joke cryptocurrency represented by a Shiba Inu dog that has been the year\u2019s wildest crypto moonshot.<\/p>\n\n\n\n<p>Despite its lack of fundamentals (10,000 coins are produced every single minute), Doge has managed to become a top 10 digital asset by market capitalisation.&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<pre class=\"wp-block-code\"><code>10,000\nThe number of Dogecoin that are created every \nminute through its mining process<\/code><\/pre>\n\n\n\n<p>At the time of writing, the world\u2019s favorite memecoin has a market cap of\u00a0$43 billion, having previously surpassed $80 billion. Having an enigmatic figure like Elon Musk in its corner has turned Dogecoin into a semi-legitimate (but, y\u2019know, not really) crypto, with a market cap that exceeds many Fortune 500 companies.<\/p>\n\n\n\n<p>Like pyramid schemes, where funds from new investors provide returns for those who invested before them, Poopcoins can only perpetuate as long as there are more new investors than sellers; also known as the&nbsp;<em>greater fool idea<\/em>. As such, the communities that spring up around Poopcoins have ample incentives to compel others to get in the game and buy.&nbsp;<\/p>\n\n\n\n<p>And calling it a game is a good metaphor. it is a bit like pass-the-parcel, except that when the music stops and shitcoins lose their tenuous claim to having any sort of value, you don&#8217;t want to be the one left holding it.<\/p>\n\n\n\n<p>At this point, many abashed investors pretend they were fooling around all along and cuss themselves for a failure of foresight. There are, of course, those intrepid individuals who specialise in profiting from crypto moonshots by buying and dumping at the perfect time, but they are seasoned professionals who know exactly what they are dealing with.<\/p>\n\n\n\n<p>A Manager Director of Emerging Market Sales for Goldman Sachs provides a case in point. They allegedly made fortune from Dogecoin &#8211; great headline &#8211; though many will overlook the 14 years spent with the world&#8217;s biggest investment bank learning how sentiment trading works.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Gives Crypto Value?<\/h2>\n\n\n\n<p>Investors who don\u2019t understand the numerous factors that give a coin value \u2013 its emission schedule and tokenomics, its developer base, strategic partners and security \u2013 are the kind most likely to FOMO into these thinly-veiled pump-and-dump projects that can enrich a small minority but mostly leave a trail of irate investors in their wake.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Bitcoin remains the number one cryptocurrency due to its strong market demand, genius proof-of-work consensus algorithm and difficulty adjustment, broad exchange support, and predictable stock-to-flow ratio.&nbsp;<\/p>\n\n\n\n<p>Bitcoin is also highly secure and immutable, giving users an opportunity to self-custody their wealth without risk of seizure. Bitcoin\u2019s revolutionary attributes make it a promising store of value and inflation hedge, particularly in an era when central banks print money ex nihilo.&nbsp;<\/p>\n\n\n\n<p>Bitcoin might be the best example of sound money ever conceived. Compare its properties to a poopcoin like\u00a0SafeMoon, which was conceived as a bit of a joke. Rather than being built on solid foundations like Bitcoin, SafeMoon came to public attention via a busy marketing campaign that included snappy YouTube videos and countless news articles.\u00a0<\/p>\n\n\n\n<p>Like an actual Ponzi scheme, SafeMoon has an inbuilt form of redistribution tax, wherein those who sell the token are charged a 10% fee, with 5% allocated to other holders. If this sounds like a cynical way to incentivize its users, well, call a spade a spade.&nbsp;<\/p>\n\n\n\n<p>SafeMoon also issued \u2013 wait for it \u2013 a quadrillion tokens (Bitcoin\u2019s hard cap is 21 million, and its emission schedule ends in 2140). That is a million-billion, or 15 zeros.<\/p>\n\n\n\n<p>Given all of the above, you might think no-one would be crazy enough to invest in SafeMoon. And yet it became a bonafide crypto moonshot when its value surged by 3,000% in the 60 days after release.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<pre class=\"wp-block-code\"><code>1 quadrillion\nThe supply cap for SafeMoon<\/code><\/pre>\n\n\n\n<blockquote class=\"wp-block-quote\"><p>We\u2019re in another bandwagon era where people out there who have low standards, low morals and low ethics, seem to be quite happy to put forward a very convincing-looking website with a whitepaper full of gobbledegook, using just the right terms, in order to promote their particular blockchain projects or defi app &#8211; Thinklair<\/p><\/blockquote>\n\n\n\n<h2 class=\"wp-block-heading\">Shitcoins: All Hype, No Heart<\/h2>\n\n\n\n<p>In a way, shitcoin developers are freed from the hassle of developing a sustainable project and viable cryptocurrency, and are thus able to focus their attention on creating and pushing a convincing message.&nbsp;<\/p>\n\n\n\n<p>Like the innumerable ICOs that seduced investors in during the 2017 boom before vanishing into thin air, many shitcoins have come and gone over recent years, capitalising on the avarice and naivety of the same punters drawn to get-rich-quick schemes since time immemorial.&nbsp;<\/p>\n\n\n\n<p>Oftentimes, the reasoning behind an investor\u2019s decision to FOMO into a poopcoin doesn\u2019t go beyond \u201cI saw it going up.\u201d They mighn\u2019t bother investigating the dev team, emission schedule, token utility or even taking the temperature of Crypto Twitter before loading up their wallet. Later, the vast majority will wish they\u2019d dug a little deeper.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Danger Shitcoins Pose<\/h2>\n\n\n\n<p>Obviously financial mania isn&#8217;t new. Tulip Mania and the South Sea Bubble are two obvious examples. Those bubbles inflated, popped and the world moved on. So what\u2019s the real problem with a dog inspired memecoin, or a crypto designed on multi-level-marketing principles?<\/p>\n\n\n\n<p>Aside from the losses that many ill-informed investors will rack-up, Shitcoinery poses a real problem for those crypto projects with genuine intent to improve the world. There is a real risk that shitcoins become a justification for regulation and bans.&nbsp;<\/p>\n\n\n\n<p>One of the reasons why $1trillion was wiped off crypto\u2019s market cap was China\u2019s negative comments, a lot of which was focused on protecting consumers from the speculative nature of crypto.<\/p>\n\n\n\n<p>So what is the solution? Crypto is about agency: the freedom to act. It is designed such that anyone can participate, but the onus is on the individual. DYOR is one of crypto\u2019s biggest mantras, but while you can lead a horse to water, you just can\u2019t force it to read a whitepaper.&nbsp;<\/p>\n\n\n\n<p>Another problem is that the crypto ecosystem has no defined structure or system of self-regulation. Should, for example, Binance Smart Chain place restrictions on the tokens they support? That sounds a lot like censorship, which would be a red line that many people within crypto would not want to cross.<\/p>\n\n\n\n<p>Read what&nbsp;Samy Karim, a coordinator of business and ecosystem development at Binance, said at CoinDesk\u2019s Consensus 2021.<\/p>\n\n\n\n<pre class=\"wp-block-code\"><code>BSC is a public permissionless infrastructure so \nanybody can deploy projects there, You have \nmalicious actors there and hacks, and exploits \nin DeFi are not new and definitely not unique to BSC.<\/code><\/pre>\n\n\n\n<p>If regulation isn\u2019t an option, then education seems the best option. If the wider industry agrees that investors should be free to buy into whatever crazy token they choose, but know the regulatory risk that poses, then similar efforts to the recent Bitcoin Mining Council might be coming.&nbsp;<\/p>\n\n\n\n<p>Bitcoin\u2019s biggest evangelist, Michael Saylor, appears to be the driving force in creating a loose organisation to counter negative narratives around Bitcoin\u2019s energy consumption. In the absence of a brand and reputation management team, we might see similar coalitions emerge to help people navigate crypto\u2019s sewer and the phenomenon of shitcoins.&nbsp;<\/p>\n\n\n\n<p>Black Wednesday\u00a0of 2020 \u2013 plus the equally black Wednesday May 19, 2021 \u2013 were a reminder of the market\u2019s inherent volatility, and a timely heads-up for those seduced by YouTube snake-oil salesmen touting the next 100x crypto moonshot. Do your due diligence or pay the price.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What exactly is a shitcoin? What gives crypto value? The shitcoin hype machine The dangers of shitcoins Decentralised. Unforgeably scarce. Backed by a committed developer community with a clear roadmap. These are the fundamental qualities that give cryptocurrencies value. None of these apply to so-called shitcoins, the crypto moonshots and meme tokens that, through humour [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[93],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9045"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9045"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9045\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}