Why is there a Market for Shitcoins?

  • Premine — If a company or individual created every coin or token prior to the network going live, this is a cause for concern for Vays. The issue is that these projects will often hold back a set amount of the total to enrich its creators.
  • ICOs — Premine is often behind another cryptocurrency phenomenon called the initial coin offering. These efforts at crowdfunding were all the rage in 2017 and 2018. The company behind an idea would create a load of tokens on a platform like Ethereum and then sell them to investors. Those buying them would hope that the project was successful in its aims and that the value of the token would increase. ICOs generated huge wealth for many of those holding them. However, Vays claims that such fundraising is just selling unlicensed security, which is illegal. Unfortunately for many investors, the US SEC agrees with him !
  • Proof-of-stake coins — Vays also claims that any coin that uses proof-of-stake over proof-of-work to secure the blockchain falls into the category of shitcoins . For him, the system does not allow for the same level of security for transactions as Bitcoin’s proof-of-work and is thus ill-suited for networks that potentially support tens of billions of dollars’ worth of value .
  • Developer rewards baked in — Some cryptocurrencies allocate a portion of each block reward to go towards the project’s development. In theory, this sounds like a great idea. Bitcoin developers often work part-time on improvements and would surely be able to focus more of their energies on Bitcoin if they were funded. However, Vays reasons that such developer rewards at the protocol level are contentious. Issues like who decides who is rewarded are behind his logic.
  • Clear scams — Although Vays uses the term “ scam “ very liberally, the most blatant scams are clearly “ shitcoins “. Over the years there have been many. BitConnect , OneCoin, and PlusToken are amongst their number.

Why is there a Market for Shitcoins?

Conclusion: Do Your Research and Invest Wisely

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Godex.io

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Anonymous Crypto Exchange Without Limits