Topic: To the Moon: Shitcoins are Ponzi Schemes (Read 600 times)

If bitcoin required 200 million dollars for its development then most likely it would not have been even released yet, do not deceive yourself, those developers do not need anywhere near that amount of money to create their coins, and if they do then they do not know what they are doing, Satoshi developed bitcoin on his own and he changed the world, if a bunch of developers cannot do better than him under better circumstances then you know their project is worth nothing at all.

A good project always has a clear target, when they encounter a problem of course the best solution is not to make a scam project, and the most important thing is that before making a project it must be supported financially strong and for the current size I have noticed in many discussions is a capital of at least $ 200 million .

In terms of their structure Ponzi schemes and shitcoins are different but the greed behind them is exactly the same, for example there are many people that know deep down that a ponzi scheme is a scam but they still invest in it as they hope to get in it early and then make a lot of money, and something similar happens with shitcoins, in which people know those coins have no future but they hope the hype is enough to make the price to go up and then earn a fortune in the process.

Shitcoins aren't ponzi scheme, but are somewhat a kind of scam which everyone knows but yet, people still invest in those coin because they all want to get rich real quick. Go to the subreddit of those shitcoin and you will see every investor trying to hype the coin  so others invest in the coin, cause the price to pump and then dump and exit with their profit. It is more like every investor trying to scam each other. But at the end, it's the developers who take all the profit and leaves.

Shitcoins are the rage now. And some of them happen to have some use cases and actually have MVPs. Example are our regular guys like Dogecoin, Shiba Inu, Saitama Inu and most recently Baby Doge Coin. I used to sneer at them, but then many people take them serious, and they are in top 10 coinmarketcap rankings

And that is the thing, if someone wants to use their money to invest in those coins knowing the risk they entail then they are free to do so, but they need to use only a very small part of their capital, probably something like 5% is fine, that way if you happen to lose that money you can easily recover it by simply waiting a little bit and bitcoin reevaluating itself by 5% during that time, however people put all their savings in those coins and that is when tragedy strikes and they lose all the money they worked for years to save.

Lots of alts & tokens carry a very high risk which is why the majority of them are extremely cheap. You must do your own research when buying a non mainstream coin. Obviously don’t invest too much in the less well known alts. That’s not to say you can’t make great profits from them but just be aware you can make big losses. I personally prefer to buy bitcoin, eth etc but tgere are many opportunities in others.

There were many shitcoins that have turned into a scam. As the rug pull became popular with such new projects. It's really one of the worries of the new investors.
But the bad thing is that, instead of them avoiding those new projects that are likely to rug pull. They're investing more money in there with the hope to profit first before anyone else. They take the risk even they know that they can make no money from there.

A great deal of shitcoins are scams as well but not all of them are, many shitcoins are simply bad projects which do not really have any hope to stay in the market for the long term and will eventually disappear, however people are so fixated on getting profits no matter what that even those projects receive a lot of attention, which they do not deserve, so while I do not like them it is likely that shitcoins are going to be with us forever, so long as people do not learn to not invest in those coins then those projects will remain popular with the community bringing them nothing but losses in the future.

Perhaps there are similarities between Shitcoins and Ponzi Schemes. But at the end of the day, it is still the investors responsibilities here, if you wanted to be the victim of shitcoins or not. I mean there are risk obviously if you invested on them, they could collapse, they can do a rug pull etc. But if you still wanted to pour your money on it despite the risk then it's your own fault, just saying.

I do not think that all new projects are seen as shitcoins. At one point SOL was a new coin, Avax was a new coin, ADA is very old but even that was new at one point, even ETH was a "new" coin at one time. If we look at only the "new" new ones, Axie could be considered new, dot and matic doesn't seem too old or at least I heard about them recently, shiba is as new as it gets and yes it is a shitcoin if you ask me but it has seen high levels.

So, we are talking about many projects being new and then reaching to close to top 10 or even be in top 10. Which shows that we do not really consider all new projects as shitcoins. Only the shit ones are called shitcoins because they are shitty.

Simple tipical for beginners without technicals in market patterns, I hope he doesn't declare sh*tcoins to bitcoin and other top altcoins during bear market because all coins will crash due to negative sentiment. Must understand the meaning of sh*tcoin clearly in the many discussions above so as not to assume all coins are part of sh*tcoin.

that's they typical of shit coin newbies. call everything as a scam when he was suffering the lose and he will be calling everything as the best investment when it gives him return but it can't also deny the fact that if meme tokens have pretty similar scheme like ponzi. I guess any investment will always be like that. When you able to join as early adopters and you win.

Dogecoin must be an exception but why don't you even see those hundreds or thousands of failed meme tokens that already dead? that will be fair if you are asking me. The fact that even if those meme tokens generate bunch of money for those early buyers and those are still meme tokens.

Ponzi offers attractive advantages to new people in the business world. I see a lot of people in my neighborhood who first got to know their investments got stuck in a ponzi and lost a lot of money. I believe in every country there are strict regulations on ponzi schemes. Still we have to be vigilant.

There are good shitcoins   and also bad shitcoins, I will only call a coin shit if I fail to make any profits from them after holding for long, I've seen some shitcoins do so well later for example doge coin, those who turned to millionaires because of shiba won't ever see shiba inu as a shitcoin.

Shitcoins and Ponzi Schemes have different meaning and I don't think as well that all of the shitcoins can be called as Ponzi Schemes.
Ponzi Schemes is almost the same as MLM that you will earn only thru referrals and some other things maybe but mostly thru referrals. Shitcoins is described as a coin that has no value and no purpose as stated here.

In other words, Shitcoins can't be ponzi schemes because there are other reasons why it is being called as a shitcoin. Number one reason is that the coin itself hasn't have any use case at all. Another is that the project has lack of traction and the project doesn't have any community that can support it. A coin that is being pumped and dumped can be considered as a shitcoin and we've seen many altcoins did this.

...But they are however similar because the only reason the people that generate them do so is because their intention is to rip people that invest in them off even when they know they are not offering any meaningful thing behind them and I agree as you said, mostly the first set of investors are usually the gainers. 

What does a Ponzi scheme means is explained in the previous post. It is similar to the MLM where people will be benefited with the amount from the new persons joining on both the legs. In my understanding shitcoins are projects that emerged for some purpose, but due to some issues they weren't able to progress. This can be of the problems out of finance, development, promotion. There are several projects that got launched, but didn't succeed in the short run. After years once again it got dusted and grown good. Shitcoins aren't Ponzi schemes, there are ponzi scheme pattern coins as well as scam coins.

All shitcoins aren't Ponzi/Scam.

This is the problem with people who do not understand what a confidence trick is. Ponzi scheme is not something you invest and it loses money and you get out with less money. Ponzi scheme is something you invest, and they pay you with the previous investors money, and then you see how wonderful it is and invest more and they pay the previous investor with your money and until both of you stop, you get money from each other thinking you are doing fine and earning a lot.

This is the problem here, you are not going to make that much profit, you are not going to earn too much but you are not going to get scammed in a ponzi way, nobody is giving you others money to make you believe you are profiting, it is an investment. It could go up, it could go down but it is an investment in the end and it is based on what the market decides to do, nothing more.

I won't mention one though as I might be seen shilling it, but sometimes those projects just do not get the public's eye that's why they get little to no investors at all. The word altcoin/s has been like painted to be "likely to be a shitcoin" by many. And to be honest, whenever I see newer projects just popping up, it have little to no expectation that it will push through.
And yes, even business outside crypto are also failing.
I recall some coffee shop businesses around here in my area that just started to close one by one pre-pandemic, even though their menu seems good.

yes, when a new altcoin has no fundamentals and only has an idea then apply a tax of more than 12% when we trade, then it will be detrimental to new investors who join, some shitcoins are made for the purpose of quick profit, but this situation is difficult to avoid because new investors those who want quick profits don't see the purpose of the project, and these want to quickly get a lot of profits ending in losses because of some new schemes on that shitcoin

It's pretty similar to ponzi scheme. The early you got in the market the more money you will get it as more and more early joiners will come to pump the price of the token. The same mechanism that happened with the pyramid scheme but this is more structured caused by people are seeing it as meme token and they are investing in it while they didn't know if they have become late joiners and they will always be losers. The more people join and more money earned by early buyers. So many newbies are falling into this new type of ponzi scheme coz they are investing based on gambling to get decent amounts of money and it's not about the fundamentals. So many people didn't even realize this.

The meme coin trend makes shitcoins no worse than ponzi schemes as meme coins gained early popularity and pump prices have increased since being listed on the medium exchange, technically different from ponzi schemes in that pure scams simply invite others to invest to cover profit payments for early members .

I think the only similarity between shitcoin and ponzi scheme is that most shitcoins are pump & dump. So those who buy it at the latest (before the bubble bursts) lose the most. Those who buy shitcoin as soon as possible and leave it on time gain the most - the same goes for the ponzi scheme. However, technically they have nothing to do with each other.

Of course, they don't care what will happen to the investors, they're ripping us, and the image of crypto which doesn't matter to these Ponzi scheme runners as what matters for them is to get money from innocent people. We have heard a lot of Ponzi schemes been trapped but no one had even gotten sentenced, they are still in the crowd looking for some fish.
While these people exists, it will lose confidence to us and might one day, we've got trick by them.

There's a similarity but they really not same technically as you explained already. The reason why people keeps comparing shitcoins to ponzi is due a lot of rugpull and honeypot happening on many shitcoins in different blockchain. Devs allowing user to buy cheap tokens while new user keep buying to pump the price to the peak then early buyers will take profit same time with the devs with there unlock tokens. The project will will disappear after that and the devs will create new token with same scheme.

I hope you see the similarities.

Even in theory, shitcoins and ponzi schemes have nothing to do with each other.
Shitcoin is a cryptocurrency that you can trade, sell at any time or buy in any quantity. Shitcoin may be a project that just went wrong, or it is not very popular for some reason.
A ponzi scheme is a scam involving the collecting fees from new entrants to pay wages to those who joined the pyramid earlier.

Most of the people that Generate these Ponzi schemes and shitcoins when it comes to crypto are actually ripping people or their investors off but I think most of them actually get away with it so when you say, "the odds are against them" I don't quite get that. All the rug pulled crypto projects, how many of them have been sentenced for their actions? even the Ponzi schemes perpetrators, most of them get away with it with only the investors losing at the end.  

In my opinion the Ponzi scheme is definitely a real scam, while shitcoin if it has a strong community can make many people become millionaires in a short time and much more can be increased in crypto, there are many examples of what was just a coin meme turned into something big in the world. this market.

that's true and im also thinking like that. So many shit tokens are ponzi and why? no utility, no usability, that's only full with hype and pump then it will be going down again to the bottom. The shit token was the worst thing that i have ever seen. So many people join just to make bunch of money and they didn't care about the fundamental. They didn't care anything about the project what they do care is about being able to make bunch of money from the shit token like that. This is crazy and how people are also creating more and more non shit scam token and newbies are also adding liquidity into it. That's so crazy as fuck. they are only pouring scammers with their money. You are no wrong. Your opinion was totally true.

There are so many of these kinds of coins in the market and many more launching, because investors are into short term or quick profit, these are pump and dump coins who thrive on very high APY and APR but don't have any usage or platform that the community can use, developers do rug pull and those late investors are the one that will suffer the most, t's better to not invest on this kind of coins and just stick with real usage and old coins like Bitcoin, Ethereum Binance.

Having a good experience is a big thing, early comers will always earn a lot and of course those risk taker are risking everything. This is profitable but not all the time, I also have friends who are making big money from those shitcoins. Enter as early as possible and if you think you’re late already, don’t buy anymore. Opportunities is there but you must be very careful on buying.

If you are a newcomer in this crypto market, it is better to stick with top alts, btc/eth/bnb in particular. Because most never-heard alts are very risky to invest with because their respective dev team can easily rug pull especially those anonymous projects. But with top alts as mentioned, you are confident that they will not disappear into thin air while you are sleeping. Some unfamiliar alts can give you good profits if you got the right timing, but if not, usually, holders will end up holding worthless coins.

Agreed, meme coins are shitcoins but not Ponzi schemes, a Ponzi scheme is something completely different in which the owner of the scheme pays previous investors with the money of new investors, shitcoins like meme coins are coins with no purpose at all but that somehow try to get popular by trying to appeal to investors to invest with them for reasons different than its fundamentals or its long term potential, and as unbelievable as it may seem it works and people invest a lot of money in those useless coins

Ponzi schemes are structurally different than shitcoins. However, the shitcoins are on the rise it seems! The trend that was started by Shiba Inu, has now taken up by thousands of shitcoins which we see regularly flooding the market. That's not healthy for crypto market for long run.

And I see that pancakeswap is the only place where these shitcoins are traded. This is very alarming because that's the only platform where I can see only shitcoins are getting listed on a daily basis. This madness truly needs to stop.

In fact, you yourself pointed out that meme-coins are still different from Ponzi schemes, and this difference is significant. Most importantly, Ponzi schemes are actually a scam, and meme coins, while mostly worthless, are not a scam. When investing in mem-coins, each potential investor can assess the risks of investing and independently decide whether to invest or not to do so. Another thing is that investors in meme-coins want to get a good and quick profit from their investments during the period of hype, however, in cryptocurrency, everyone is solely responsible for their investment decisions.

If there is actual development being made in a coin then that is not really a shitcoin because due to the open nature of cryptocurrencies someone could always study their code and see where they went wrong and avoid the same mistakes, so even failed coins can serve a purpose, however there are many shitcoins that are nothing more but a copy of another project that changed their name and that brings nothing to the community, those coins are what people often refer as shitcoins, and no one should invest in them.

Now there is only one thing that many people are waiting for, namely the Bullrun trend or the trend of market improvement which is better than last year, because this insane decline has become the basic reference for some people to leave the market even though the opportunity and utilization has been very good.

Ponzi schemes, shit coins and scam coins all are in same category to me, only the early birds became the winner investing in such coins, believe it or not I've friends that invested in shitcoins and they don't care about top altcoins yet they made more money than me, they get in early and leave highest in 4 weeks time

Pump and dump is inevitable in any industry

Especially with an uncontrolled market it's easier, we've seen the market go crazy with stuff that I find ridiculous and superfluous. But it's a development process, even if we deny it, but it also creates many new trends.

True, In my understand if you can become the early joiners and then you will always be a winner once it will be pumped to attract the little shrimp to join in the market. The pump will give the way for the early buyers to go out from the market once the whales are trying to make more money from the new comers that come to the shitcoins. It has almost similar mechanism with how the Ponzi work these days.
I would like to call that as a new evolution of Ponzi system but so many newbies didn't care about that and they are only aiming to make fast money from the shit tokens.
Shit tokens offer nothing to its hodlers and it was only full with bullshit promises. It's also a gambling at the same time as any shit token investors will always think whether their shit tokens can be pumped or not.

Some of them are fully aware but still decided to play with fire because making profits with shitcoin are totally possible if you do able to get in on the right time
and able to get out on the right time because we know that pumps could really happen even on the most shittiest coin in the market which means that you would
really need to be that aware on what you are doing rather than making yourself get blinded and able to make yourself get behind and ending up
on losing money and some do even bought on the peak on where most newbies do commit out.

From what i understand, people who are involved in ponzi often don't even do it on purpose. Even madov i think i remember it's the same case, maybe he said this to whitehash himself thought. But often you have people who want to start a legit buisness, and start to promise huge interest rate, but then they can't realise those interest, but ends up with lot of monney in their hand, and go into faking it until they make it by paying interest with the monney they have. But huge interest rates are hard to make and it often ends bad with those so called ponzi schemes.


I believe it must be very easy to slip on the slippery slope without even really being realizing that the outcome is going to be bad or realising how the dynamics is playing out in the long run. Especially in the first stage when the punchline work and there is a good stream of new investor flocking in.

So morality often be careful when big interest are promised without a solid plan behind. Because needs to be very good to pull good interest rates in a sustainable way.

I think the same way as well, there are out there some people that can think of nothing but to get profits for themselves and they are willing to invest in Ponzi schemes even if they know they are a fraud, and they do this because as you say if you are early enough then you may actually turn out a profit, but even if that is the case it is simply wrong as the person doing that is benefiting from the naivete and the disgrace of others, and that is simple unforgivable as they are also taking advantage of those that are ignorant about these kind of scams.

the pattern is still the same as usual the tactics and strategy are the same so I don't really care what they do, the projects they run as long as it's still the same as before I don't want to interfere with him.
the reason is very clear. too many things like this make a loss for some people who really don't understand how it works

the scariest part is that every month there are many new shitcoins coming on the market and always with innovative ideas like altcoins of memes, or altcoins of Japanese food or altcoins named after a Japanese dog and people believe in these nonsense altcons. I wonder if people love and value the money they have? why is it not normal that they are putting money in these shitcoins

Shitcoins don't rip-off folks but instead some have made huge money out of such coins. Coins like dogecoin in example has gone up last year when there was rally and also Shiba now occupying good position in CMC. You have to understand that shit coins are for fun they turn investors either into profit within few days or you doubt or regret in losses , it is about risk and not to profit all day,

They are all scams but that doesn't mean you will lose your money automatically. Some investors loves to take the risk and play with it,  but we have to understand that it's very risky, without proper knowledge, we might lose a lot of money investing in shitcoins.

On  Ponzi Schemes, usually, the ones who make money are those who invested early, but we should not support this kind of fraud as even if we make some money from it but the majority of people will lose and we only become an accomplice of the crime though no legal binding, but through conscience though.

We always need to be careful but we need to incredibly watchful of those that invite us to one of those scams, after all there are only two possibilities, the first one is that they legitimately do not know that what they are promoting is a scam, in which case you need to be careful because they are too naive for their own good, however the second scenario is that they in fact know that they are promoting a scam and in that case it is better to avoid such people at all costs as they do not care at all about the fact that you will lose money by investing in that project.

I definitely will not have different opinion on shitcoins.
Shitcoins are just cancer to this cryptocurrency world which slowly killing the health of all crypto adapters financially.

In my opinion as well, shitcoins are not having any big differences from ponzi schemes. Both are planned just for the reason of sucking innocent investors' hard earned money. I guess this community must start some initiative to safeguard those naive investors from all exiting and upcoming shitcoins. Otherwise, the actual investments which are intended to bitcoin and other good coins might get deviated and lost forever.

It is easier to define shitcoin than to identify one this days because any promising coin can lose it's value overnight due to team mismanagement, hacking, rugpull, or functional obsolescent.
The relationship between shitcoin and Ponzi is that they're both fraudulent schemes but they are not the same.

This is the need for us to make strict regulations for the creation of new projects and audits of existing projects in the market, maybe this is tiring but to go in a better direction, as investors it is certainly very difficult to distinguish shitcoins or not, they only think profit and look promising.

At first you have to understand what ponzi scheme is all about, ponzi simply means something or an investment that is not trustworthy, when scrutinizing ponzi scheme it only showing negative in investment, so to cut it very short, ponzi scheme platform or investment is made of pure scam weather is shitcoin or not, so op i want you to get it right, that any forms of ponzi is not trustworthy for investment.

some of them are like that but not all shitcoins have the same goal I think because sometimes there must be a project that is almost the same but with good intentions because we really can't equalize all of that.
on the other hand my view of them would not be a scam or anything because they are just doing business and the fault is not actually in the project, because they already know that it is a scam but people still intend to go there.

The goal is the same to scamm people but the method is very different, the ponzi scheme is really made to deceive but shitscoin may not initially, but the inability to develop their coin so that it ends up being a scam. Both really hurt a lot of people but the weird things is both are still chosen by many people to make a quick profit, it's very unfortunated.

Yes and a lot of people are falling for this scheme to the reason of they earn after they invite someone to invest but they didn't know what is the bigger picture or how things works in reality. I see a lot of people inviting me to invest on something and they say I will earn by inviting others and whenever I tell them that it's a ponzi scheme they laugh at me and say I don't know how things works.

ya.ya.yo!

The so-called shit coins are created to scam unsuspecting investors using some form of tricks by temporarily pumping the coin in a bid to decieve and attract a lot of investment by investors and thereafter dump it, this is very common in the crypto market, I will term those shit coins as Ponzi scheme and these common practice has been painting cryptocurrencies in a bad light, to avoid investing in such coins newbies need to research thoroughly before investing in any coin possibly investing in the well known and reliable coins.

I would like to call that as a new generation of ponzi scheme. Shit token using the new trick as scammers are creating more and more shit tokens to be listed on dex and they were also manipulating the price of their own tokens to attract the liquidity provider to come and then they make the liq provider feel confidence and it turns to be a new scam project after that. You're not wrong but shit scam token didn't the same like traditional ponzi scheme that already explained. Shit token were having the new mechanism as the blockchain makes the scammers tried to abuse the decentralized system through issuing the garbage tokens to be traded by the new users in the crypto market. that's why there are so many rug pull happened with various shit scam tokens in the market.

On the one hand, you are right, since now there are a lot of cryptocurrencies that really do not carry value, but are simply created to receive money from those who buy these cryptocurrencies. In this case, it really looks like using a ponzi circuit. On the other hand, these cryptocurrencies still have a certain positive direction, namely, they help to attract more people to study and own cryptocurrencies, although this ultimately leads to the disappointment of many who ended up using such a scheme.

A great deal of altcoins are scams, others are bad projects and a few are in fact Ponzi schemes, however there is a reason why words have different meanings, and I think it is a mistake to think of shitcoins exclusively as Ponzi schemes, after all that is only one way in which you could lose your money when there are so many ways in which could happen, so you need to learn to distinguish each one of them so you can better protect yourself and your capital if the time comes in which you decide to invest in new coins.

I do not know if this is true, but there are many scams of this type which I did not find it in connection to Ponzi scheme. The type you are commenting about are called 'pump and dump'. This is called pump and dump all because the developers will invest first, making other investors to invest later. But, later, the developers dump the project after making profit and sell the coin, making high amount of profit, but they sold huge amount which will result to bear market for the coin to become shitcoin. But, also know that some developers wanted the best, but the project failed. Aside from pump and dump, even new projects are risky.

Ponzi scheme and shitcoin do not follow the same rules but both are scams. At some point, they will scam you. Before investing in a coin, one should know the details of the project's background and never be persuaded or influenced by anyone.


In the same way that early investors get some profit in the Ponzi scheme, early investors also get some profit in shitcoin. No doubt dogecoin is a shitcoin with no fundamental background, you can't say no one benefited from dogecoin. It is true that many people have been deceived into buying dogecoin but the list of beneficiaries is not too short.

Welcome to crypto! I don't think there's another way of saying that... it's something we all encounter, sooner or later! There is no way to miss all those shit and Ponzi schemes coins, they are around, and we see them make spikes on charts, and going down to zero after! And most of us know it's just a game of "fast fingers", if you having fun it's like gambling, and if you have "fast fingers" maybe you can make some profit here and there, but at the same time there is a high risk that you will lose everything!

So... just don't invest in low cap coins for fun, do it only after deep research! If, in any case, you decided to have fun with low-cap coins at least be aware of all the risks you are facing with! People do it, we all know that, but most of them are short in the end!

The main difference between the ponzi scheme and shitcoins is that the organizers of the ponzi scheme pay a guaranteed profit to early participants, using the money of those who joined later. There is no guaranteed profit in shitcoins and you can lose your money at any time.

You are right, it might be useful to introduce a new category "ponzicoin" because new coins are often only launched to be a ponzi.

So many DOGE copies have been released providing no added value.
People should always avoid such coins because avoiding such coins will prevent price gains which makes ponzicoins unattractive and disliked.

Education is key and we should not support ponzicoins.

I think ponzi schemes are very similiar to some shitcoins, because the intention behind the launchment of these coins is the same intention of a ponzi scheme operator.

The method employed isn't exactly the same, but besides the goal being the same there are many common aspects: misleading marketing, attractive referral programs (bounties, airdrops or initial staking for shitcoins), lack or false content of informations about the team behind the project...

And just like in any ponzi, shitcoins' developers can use the investment made by early investors to pump the coin and make it look promising for more investors around.

It became very clear with the scam shitcoin Squid, which went from almost 3000$ to nothing in 5 minutes. Furthermore, investors were not allowed to sell their coins when they wished. That was a manipulative intentional move of the developers.

So shitcoins look like refined ponzi schemes for the new generations which obviously wouldn't fall for the old model.

Well i would say per definition shit-coins and ponzi schemes are different things. A shit-coin, so basically every meme-coin that is out there, is an absolutely useless token that is created by a "team" with almost zero effort in order to make money, but i would say that most people know that shit-coins are exactly that and only throw in a little money maybe in the hopes for a fast pump to sell them again quickly. No one, at least i hope that, would invest a significant amount of money into a shit-coin (meme-coin). A Ponzi scheme on the other hand is a project that may look very serious and professional on the first glance but that's only a trick in order to trick people into investing their life-savings into it.

I think they're similar (if we ignore the difficulties of sorting altcoins into shitcoins and legit projects), but there's still a difference. For example, there's a certain hierarchy in the company when it comes to Ponzi schemes, whereas all investors are formally equal when it comes to shitcoins (my 500 coins will be worth the same that someone else's 500 coins, and the question is only if I sell them at the right moment).
As for shitcoins not promising returns, I think it probably depends on a project but I doubt that no ICOs promised their investors good returns.

While yes, the majority of altcoins are indeed scams, many projects do come with positive intentions. Much of the time, it's just regular people attempting their own iteration of what they think cryptocurrency is. While we know that 99% of these chains will fail, this doesn't mean they don't have the right to try.

Firstly, if this isn't clear not all altcoins are shitcoins. In my opinion, shitcoins are any crypto that serves no real purpose, take meme-coins for example. And even these shitcoins are not exactly Ponzi schemes by defination, as others have mentioned since they don't promise any returns, but some shitcoins do work like Ponzi schemes.
Take these recent Shib, Squid Game, even Doge examples, early investors who were sensible enough to get out at the peak (just like Ponzi investors) made some insane profits but others who bought near the top are left with holding their bags or cuttings massive losses.

Not all of the shitcoins are ponzi schemes, although many of them really don't have an actual good product and they only aim to increase the value of their project.

But I won't count all of them are ponzis.

There are good projects that I've seen and called shitcoins during their early phase and I've even called a lot of them as shitcoins too then, this bull run came and proved their worth and became one of the top.

It's not it at all, at least for people who know what cryptocurrencies are all about.  I'd also suggest that investopedia shouldn't be relied on as an authoritative source of information--especially if that's what they (or whoever contributed to it) wrote about altcoins, because they clearly don't understand what they're talking about.

Consider that there's really no fundamental difference between bitcoin and your typical altcoin in terms of their nature.  Sure, there are a lot of little differences, but basically bitcoin is a crypto just like Litecoin is or Dash or you name it.  If you lump all altcoins into the category of "Ponzi scheme" you might as well put bitcoin into that as well--and that would be just as wrong.

Way back in the day I used to think bitcoin was a scam, or at the very least a bad idea that would never catch on (and goddamn was I so painfully wrong on that point), but I never considered it a Ponzi.  A Ponzi is a subset of scams that employs a very specific tactic, with some variations on the theme, which was described in the OP here.  Obviously whoever wrote that altcoin description for investopedia doesn't get it.

Edit: hatshepsut93, I swear I didn't read your post before writing mine.  I basically wrote the same thing you did about Ponzis being a specific type of scam.  Nice to see that others see things logically.

Well that's what it is.. It usually happen in some new projects wherein very promising "to the moon" but after all they all ended up into shitcoins. Lol never ever again because that's the common strategy of some influencer wherein " To the moon" and fake information and news, main reason investors always fell in such ways even nowadays. . Lol

Of course there are honest projects that try to build something, but this doesn't mean that they are worth investing in, from the fundamental perspective, because time has showed that blockchain and cryptocurrency has almost no applications in real world.


You are wrong, because a Ponzi scheme is a very specific type of investment scam, and shitcoins don't fall into this type, because shitcoins don't promise anyone fixed returns of investment and they don't make promised payments to early investors with the funds from late investment.

The problem with ponzi schemes is that the early birds do get to benefit from  their investment unlike the long term hodlers who loose out from their investments because all the value has been taken out... Hence not everyone will see these ponzi schemes to be ponzi schemes.
But in all honesty right from the start if the project doesnt look legit dont invest in it.

Not unless you are absolutely certain of what you are doing. I mean, you can make astronomical gains if you have a general idea of what to look out for, what are the red flags and all the shits, the community, dev updates, and so on.

And, from what I've seen, even good projects have been dubbed "shitcoins" because no one believes in them in the first place. I still believe that if you know what to look for, you can spot GEMS in a sea of shitcoins.

I get why altcoins are hated, but this is not it. No doubt a lot are really really flawed, but I'm pretty sure some projects actually have good goals with good intentions, regardless if they end up failing. Just like how there are scam companies/businesses, and companies/businesses that actually have goals but will end up failing anyway due to having a flawed product.

Ponzi schemes are scams which invites investments on the promise that they'll get ROI within a certain time and to a certain degree, they usually do not have any financial model or way of generating funds besides funds generated from previous investors, it differs from shit coins to a certain degree as those are designed to look attractive, like any regular scam, but do not promise investors xxx$$ returns within xxx time frame.

They both lack a functioning business model, and focus majorly on marketing and presenting an attractive outlook

Ponzis are more similar to pyramids which requires investors to recruit other investors and get payed directly off them with no functioning business model, bring 4 new investors and get payed

---

In summary, there is no need to really differentiate between them, they are all scams with similar models and should be avoided.

According to Investopedia, "The term shitcoin refers to a cryptocurrency with little to no value or a digital currency that has no immediate, discernible purpose."  They are characterized by short-term price increases followed by nosedives caused by investors who want to capitalize on short-term gains. On the other hand, "A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk."- Investor.gov. In my opinion, shitcoins are ponzi schemes, they have no goals, no direction nothing other than to rip-off folks who buy invest in  it  and hope that they're gonna make it big overnight not knowing that the odds are against them. I might be wrong but this is just what I think. Do share with me your thoughts. Thank you.

https://www.investopedia.com/terms/s/shitcoin.asp
https://www.investor.gov/protect-your-investments/fraud/types-fraud/ponzi-scheme