A shitcoin is a term to describe digital coins other than Bitcoin. It is used to be derogative and as a warning. Many Shitcoins are designed to scam people, or are considered to have very little monetary value.
Some people don’t necessarily consider all shitcoins as a scamcoin though. Some shitcoins have other design principles and could even be seen as an experiment that has some merit. They have a lot less monetary value than a Bitcoin.
An altcoin is a alternative coin, different than Bitcoin. There are many Bitcoin enthusiasts that consider all altcoins as shitcoins, as cheap or even scam clones of the original Bitcoin.
What is a Shitcoin
- What is referred to as a “Shitcoin” is a digital coin that is released mostly in order to enrich the founders. These Shitcoins are also called “Scamcoins”.
The design is to scam people. It is designed in a way to “pump” the value of the coin fast, so that the main stakeholders can get rich quick or get even more rich than they already are.
It is not always clear if all existing or proposed coins that called Shitcoins is one. To call all coins Shitcoin other than Bitcoin is a common argument among “Bitcoin Maximalists” and other block-chain supporters.
A Bitcoin Maximalist is a strong advocate of Bitcoin. According to a Bitcoin Maximalist, Bitcoin is the only coin with intrinsic value, while most all other coins are shitcoins.
Many parodies exist about Shitcoins. These are websites that pretend or actually have released coins that are in fact called Shitcoin. Some of these projects actually made money with their coin. This is because of speculation.
The intrinsic value a coin represents can be totally zero. But if people think that a coin can get popular, then its market value will increase.
As such the shitcoin parodies can be seen as a perfect resemblance of actual shitcoins, those that were designed to trick people. Examples of these shitcoin parodies are Shitcoin.fun and Shitcoin.com.
Different Shitcoin Categories
The debate whether some coin is a shitcoin or not isn’t always very clear. We can distinguish 4 categories of Shitcoins.
- The first category are actual Scamcoins. It is very clear that they are designed to enrich some people and scam others. One very famous example is OneCoin.
- Then there are coins that are actually coins that do not seem to be so shitty in the first place, they have so-called ‘white-papers’ and they have a wider support network. Examples include well known coin such as Tron. These coins are less easy to be recognized as a Scamcoin.
- The third category of Shitcoins are Bitcoin clones that generally do not offer significant extra features. Or are simply not really developed further. Examples include Bitcoin Cash and Litecoin. A coin such as Bitcoin Cash goes even further by claiming it is “The real Bitcoin”. The latter can therefore be considered as a scam.
- A fourth category are coins that actually have different design and other features than a Bitcoin. The debate among analysts is wheather these coins are to be considered a Shitcoin or not. Main examples include Ethereum, Ripple and Stellar, or even privacy aware coins such as Matomo. Many would not agree these coins are shitcoins per se, while others again would rise up and start a flame war.
It’s very good to be aware than many persons have a vested financial interest to see a coin go up in value. It’s therefore not easy to distinguish between a good coin and a shit coin. Opinions, including those in this post, therefore are, by definition, very political and one could argue, even corrupted. There are very few unbiased opinions, possibly none. This can’t be avoided, for example a journalist that wrote about Bitcoin in 2012 and didn’t buy any “to stay neutral” can’t be considered neutral anymore in 2020, as they will probably have mixed feelings due to their missing the opportunity of a generation to become wealthy.
A lot of Bitcoin talk is about the Blockchain. A blockchain in the end is nothing more than a database that cannot be altered. A good functioning blockchain is a database that can be trusted. As long as the calculations that are needed to find the next encrypted key are not jeopardized, a blockchain can store all kinds of information.
Examples of information that can be stored include the amount of coins someone has, how many coins and by which wallet those coins have been exchanged, up to information such as contracts and how raw material moved around the globe.
A lot of people think that a Blockchain is a solution to a lot of issues in the world. They therefore design new coins, for example based on Ethereum ERC20, to make use of the Blockchain idea. These coins are not necessarily designed to enrich the founders but sometimes also have a more noble goal.
The question however is if a Blockchain is often really needed to do what they aim for. What these people are often looking for is no more than a simple publicly available and reliable database with safeguards against manipulation. Blockchain in these cases is used as a buzzword to get more attention.