Understanding Cryptocurrency Categories
1. Mainstream Coins
- Definition: Cryptocurrencies ranked among the top 20 by market capitalization, characterized by high liquidity, strong consensus, and robust use cases (e.g., BTC, ETH, BCH).
Features:
- POW/POS mechanisms with miner/validator support.
- Established development teams and transparent roadmaps.
- Widely accepted on major exchanges.
2. Altcoins ("Shanzhai Coins")
- Definition: Coins inspired by Bitcoin, often with modified codebases. Some have long-term value (e.g., LTC, XRP).
Risks:
- Lower market caps and higher volatility.
- Scams prevalent; verify dev team credentials and whitepaper quality.
3. Shitcoins/Aircoins
- Definition: Tokens with no utility, often ERC-20 based, created solely for fundraising (e.g., failed ICOs).
Red Flags:
- Vague whitepapers, anonymous teams, and inflated promises.
- Zero real-world adoption post-launch.
How to Spot Scam Coins
1. Investigate the Team
- Legitimate projects disclose team backgrounds. Avoid anonymous "experts."
2. Analyze the Whitepaper
- Authentic projects detail technology, tokenomics, and use cases. Aircoins lack specifics.
3. Check Market Metrics
- Low trading volume + erratic price swings = potential scam.
4. Community & Media Presence
- Mainstream coins have active communities. Shitcoins often rely on paid influencers.
👉 Trade securely on trusted exchanges
FAQ
Q: Can altcoins become mainstream?
A: Yes (e.g., BNB rose from obscurity to top 10). However, most fade due to lack of innovation.
Q: Are all ERC-20 tokens shitcoins?
A: No. EOS and TRX started as ERC-20 tokens but evolved into standalone blockchains.
Q: How to avoid pump-and-dump schemes?
A: Steer clear of coins with:
- Overhyped marketing.
- Locked liquidity or referral-based rewards.
Key Takeaways
- Stick to top-20 coins for lower risk.
- Research thoroughly—avoid coins without clear use cases.
- Diversify wisely; prioritize projects with transparent teams.
👉 Explore vetted crypto projects
Remember: "In crypto, BTC is the king; altcoins come and go."
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