Introduction
Complement of the season to all of you my fellow steemians. It is with a joyful heart that I once again wanna welcome every one of you to this week's lesson by professor @nane15 on "Shitcoin And How To Benefit From It" and having gone through the lesson as presented by the prof, I will take actions to answer the questions that follow, I remain @hisgeneral.
1. Explain your understanding of what a Shitcoin is.
Shitcoin being a disparaging word in the globe of digital currencies, is a term that encompasses failed cryptocurrencies. The fact that blockchain technology allows anyone the chance of developing tokens and cryptocurrencies is the reason for the development or innovation of currencies that have neither value nor purpose and also yield no factual results hence are referred to as shitcoin.
Cryptocurrencies that have little or no value or digital currencies that lacks instantaneous, observable purpose are referred to as shitcoins. Shitcoins is a derogatory term frequently used to characterize cryptocurrencies or altcoins that came into existence after bitcoin was created and became famous or prominent.
Shitcoin is a name given to cryptocurrencies that appear to be worthless and valueless which were developed as copycat currencies that haven't contributed anything modern to the world of cryptos. Dent (DENT), Dogecoin (DOGE), Shiba Inu (SHIB), BitTorrent (BTT), and TRON (TRX) are popularly known shitcoins. Dissimilar to Ethereum or Bitcoin that were invented or developed with explicit, well-stated purpose and forward-looking objectives, shitcoins don't have functionalities and consequently lack the quality of being long-lasting like other coins.
After the launch or introduction of bitcoin, there was an increase in curiosity about cryptocurrencies. Enterprises or firms that look forward to taking advantage of blockchain technology for the invention of their own altcoins (which isn't in line with the fundamental aim of bitcoin) were attracted by this success. The value of shitcoins is just based on their existence. Due to the supposition surrounding the invention of shitcoins upon takeoff, money is pumped in by instreaming investors. As a result, the price of these coins is pushed exponentially higher by their mass purchase but in a short space of time.
As soon as investors cash out for the purpose of making a short-term profit, the price of these shitcoins undergoes a rapid fall in price or value at the same rate with which it had risen. Its price continues at the same level as soon as all timely profits have been realized. Consequently, the buy, lie, and sell high trend always leaves inexperienced amateur investors with a pile of shitcoins that lack value.
To mention as a case or example, the value of Dogecoin is based on the tweets of Elon Musk (the CEO of Tesla) hence, the coin's value would be baseless if not for his support and shared widespread viewpoint. In addition, he also declared openly that payment in Dogecoin will be accepted by Tesla on a trial basis.
2. Do you think it is possible to profit from investing in Shitcoins?
Making profits from investing in shitcoins is actually possible reason being that the investment is usually a short-term investment but however, it is imperative to carry a thorough study on the successful shitcoins like Dogecoin and thereafter make a short-term investment.
There are a few number if shitcoins that are beneficial despite the fact that it is usually problematic for one to find a shitcoin that has the capacity of giving reasonable dividend. Diversification of investment is advisable for one to profit from investing in shitcoin.
Additionally, proper investigation and examination should be carries out to ascertain the shitcoin developer, and the objective of the project. Investors through this would be aware of what category of shitcoin to invest in which would probably give them good returns.
3. List advantages and disadvantages of investing in Shitcoins.
- Possible Sharp Increase Of Price
This is one of the merits of investing in shitcoins as price has the possibility of smartly increasing. The low price of shitcoin results in little amount of circulation as well as holdings. Consequently, the statement of a whale can momentarily cause the rise of shitcoin price.
For instance, Elon Musk's statement sometimes ago led to the increase in price value of certain shitcoins. Consequently, it can be profitable to invest in shitcoins.
- Low Price Lead To Holding Big Volumes
Due to the low price of shitcoins, an investor can hold a huge volume if it. Most crypticurrencies like Bitcoin is known to have a huge market cap with breathtaking price such that an investor can commence acquiring from a small little amount, but will require a huge amount of to make large gain. On the other hand, since shitcoins relatively low, there is a possibility of holding huge amount of coins.
- Purchase A Wide Variety Of Cryptocurrencies
This another advantage of investing in shitcoins as most shitcoins can be bought at a very low price and hence, one can hold a good number of currencies. Since diversification is applied, one can anticipate a tremendous profit be choosing the rightful cryptocurrency.
- Possibility Of Fraud
There are possibilities that shitcoins have the aptitude for fraud. Many kinds of cryptocurrencies exist, and there are coins that have been evolved with the objective of duping money. Investing in fraudulent coins simply means loosing your capital or cost of purchase which is indeed a huge loss. This is why it is very crucial to gather firsthand information from the perspective of purpose of development and expedience.
- Possible Price Plummet And Loss Of Value
Although shitcoins have the advantage price rising sharply, it however also stand the chance of plummeting and loosing their value. Shitcoins also have little future expectations due to the fact that they initially lack popularity. Consequently, shitcoins stand the risk of unexpectedly becoming valueless or inconsequential.
- Eliminated Handling Of Exchanges
Possible abolishment of handling cryprocurrency exchange is another disadvantage of shitcoins. When handling cryptocurrencies whose liquidity is small and demand low, from the perspective of the exchange, users trading will be problematic and hence there won't be ample merit.
Supposing the exchange is eliminated, the coin will experience further decline of liquidity and value. Shitcoins may be eliminated from the exchange though it may be traded therefore, it is imperative to discern whether they are dependable coins.
4. List at least 3 examples of Shitcoin that have been a scam, also explain what they consisted of.
• RACA DAO
This is the most recent shitcoins that was a scam, deployed on Binance Smart Chain on 3rd January 2022 with a total supply of 500,000,000,000 RACADAO, circulating supply of 500,000,000,000 RACADAO, liquidity of $28,850, 8 decimals, and 100 holders. As can be seen below, the coin is associated with scam.
• Baby Doge BNB (BabyDogeBNB)
This is another shitcoin that has been observed to be a scam. From the screenshot below, although the popularity of the coin rates #2827 with $50.18m volume (24 hours), the coin has $0 market cap and $0 circulating supply hence, js a scam.
• BitBull
This another shitcoin deployed on Binance smart chain that has been seen to be scam. Although is is seen to have a total supply of 10,000,000,000,000 BitBull and a circulating supply of 10,000,000,000,000 BitBull, but from the screenshot below, we see that Trading volume 24h reads $0 and Volume/Market cap reads 0.00%
5. Explain at least two examples of Shitcoin that have been successful and are currently keeping it. (Other than Dogecoin or Shibainu.)
There are numerous shitcoins that have proven to be successful which investors are still holding up to this day. For this question, I will be talking about BitTorrent and Tron
BitTorrent (BTT)
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This is a famous P2P file sharing and a torrent platform that has become more and more decentralized in the last years. It was initially circulated in 2001 and bought by TRON blockchain platform in 2018 and obtainment, it has annexed several tools alongside a devout native token "BTT" which was launched in 2019. BTT was initiated on TRON's blockchain, utilizing its TRC-10 standard.
BitTorrent is - according to its official publication - the largest decentralized peer-2-peer communication protocol in the globe.
According to CoinMarketCap, the price of BitTorrent as at the time of this post is $0.002426, it is ranked #55 with a market cap of $2,401,887,036.25, circulation supply of 990,000,000,000 BTT, and total supply of 990,000,000,000 BTT
TRON (TRX)
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TRON is an operating system that is based o blockchain aimed at guaranteeing that the technology is adequate for day-to-day use. Unlike Bitcoin that can handle about 6 transactions per second, and Ethereum that can take care of up to 25, TRON argues that its network has the capability handling 2,000 transactions per second.
Across-the-board, TRON splits its objectives into 6 phases which comprises conveying modest disseminated file sharing, propelling content creation via financial rewards, enabling content authors to launch their own unique tokens and making the gaming industry decentralized.
TRON is one of the most prominent blockchains for building DApps. The native coin of TRON is TRX which is one of the very shitcoins that is doing relatively good. According to CoinMarketCap, TRX is rated #27 valued at $0.06572 (as at the time of this post) and on 693,600 watchlists. TRX has a market cap of $6,693,094,330.92 and trading volume of $1,054,415,965.21.
6. Perform a historical analysis of the prices of any of the cryptocurrencies that you chose for the previous question. (Use screenshots.)
For this question, I will be doing a historical analysis of price of TRON (TRX).
TRON has a total supply of over 102 billion tokens and approximately 71.6 billion in circulation.
In 2017, when the sale of the token was held, 15.75 billion TRX was distributed to individual investors, while extra 40 billion were reserved for ICO participators. 34 billion TRX was allotted to the TRON Foundation, and 10 billion TRX given to a company owned by Justin Sun.
Altogether, this implies that 45% of the supply of TRX went to the project founder, while 55% was allocated to investors. The price of TRX as at the time of writing is $0.066037 alongside a 24-hour trading volume of $956,705,751. In the last 24 hours, the price of TRX is down –2.4%.
From the the above price chat, we notice that the price of TRX appears to be declining.
7. Based on your previous analysis, what do you think will be the development of the price of the cryptocurrency for this year? Be creative when explaining.
From the previous chart, we noticed that the price of TRX is in declining state i.e. retracement. From the above chart, we notice also two outstanding price movement impulse and retracement hence, there is a a great possibility that the price of TRX will experience impulse movement.
Conclusion.
Shitcoin is a name given to cryptocurrencies that appear to be worthless and valueless which were developed as copycat currencies that haven't contributed anything modern to the world of cryptos. The fact that blockchain technology allows anyone the chance of developing tokens and cryptocurrencies is the reason for the development or innovation of currencies that have neither value nor purpose and also yield no factual results hence are referred to as shitcoin.
A big thanks to you Professor @nane15 for the lecture.
Cc:.
@xkool24