Bless me Satoshi for I have Shitcoined, this is one of many confessions
During my time in Bitcoin, I have shitcoined, it’s a path many of us will have to walk, very few of us will ever remain on the Bitcoin path without being lead into temptation. To the untrained eye shitcoins, I mean sorry “Digital Assets” are all alike and some are cheaper than others based on your unit biases.
It takes a while to make the distinction between Bitcoin and the rest of the pack and we all take our own time to get to that realisation, some never get there but that’s a topic for another post.
I have shitcoined for several reasons, out of greed, out of curiosity, out of drinking the kool-aid marketing pitch and most if not all of those times, I’ve been swindled, or as we like to call it “rekt”. When I put money into said coin, if I do the calculations on if I had bought BTC instead over a certain time period it always comes back to BTC being the superior trade.
A fact I’ve had to learn the hard way, I still have access to wallets with plenty of shitcoins, many of them are not even worth selling, so I don’t even think that there’s a point in trying to salvage those satoshis short of a majestic bull run that rips up valuations of anything remotely tethered to Bitcoin.
The superior trade doesn’t always feel like the right one in the short term when you see valuations moving up and down especially if you’re still measuring in fiat, so I don’t blame people for missing the opportunity. It takes time for it to click, for me, it took around 4 years.
Fiat debasement makes shitcoining attractive
As fiat currencies continue to lose their relative purchasing power, I get the desperation for the moonshot. You want to risk a few bucks and hope you can hit it big at the casino. We’ve got to a point where dogecoin and other meme coins are producing better returns in purchasing power than your fiat and as long as the debasement goes on the casino will be allowed to get bigger and bigger.
Look, there is nothing wrong with gambling, gambling can be fun. The problem arises when you either put your life savings on a gamble or worse sucker in others by shilling your gamble so that you can make a quick buck at the expense of others.
As a shitcoin holder, you never want to accept that you could be the shitcoin bag holder but the fact of the matter is, if you’re not an insider, pre-miner, ninja miner or an exchange, then you’re most likely the bag holder.
Where shitcoins do get it right
Due to Bitcoins proof of work nature as a distribution mechanism, it makes it pretty hard to come across. You either need to:
- Buy it with your fiat
- Mine it with hardware
- Render services to be paid in Bitcoin
Since the majority of us won’t be mining, our only way to get into the ecosystem is to purchase it. The problem here is that many people aren’t willing to put their money into something that can have a 50% drawdown because of some news.
They are behaving rationally, and I completely understand. If you have little to no disposable income, why would you consider putting it into an asset like Bitcoin? Yes I know Bitcoiners are going to say but look at the CAGR, but not everyone has that level of conviction in the system.
So the only other method of getting your hands on some Bitcoin is through working for it.
This is where I do think shitcoins have a leg up on Bitcoin in the short term. Since many of these coins are sitting with the founders or can be created in all sorts of ways, especially within the proof of stake method it makes it easier for projects to set aside funds to attract users.
I’ve seen and used many of these “earn cryptocurrency” platforms where users can get paid to perform microtasks, engage in social media and other online activities. Due to the lower restrictions on acquiring new inflation, these token projects can compensate users with the inflation.
They are successfully trading labour for their coin and helping with the distribution of their token. People feel more comfortable with this system because they don’t value their time, and any time they can monetise, they are grateful for it, even if that monetisation isn’t all that effective.
For many of these coins you earn, users are suckered in by the fiat value, but because these coins are often so illiquid it puts a cap on how much a user can unload without slippage. It makes it harder for users to acquire that value and they are often locked into these ecosystems.
Why this is only a temporary solution
I think the earning Bitcoin part of the circular ecosystem is very much lacking and a place where shitcoins have found a niche to exploit. Naturally, Bitcoin doesn’t make for the ideal microtransaction medium anymore due to on-chain fees and the number of UTXO’s microtransactions would create. This issue has held Bitcoin back in a way that allowed these less restrictive chains to surge ahead.
Now what I see is a hunger to earn something that is not fiat, a need to service micro-labour across the internet, these coins have proven that and now Bitcoin needs to improve on it. Now that we have the lightning network and a host of lapps (lightning network apps) being built, along with platforms that could plug into lightning I think it’s only a matter of time before we close the loop on this one.
Once users become accustomed to earning Bitcoin for their labour and with the instant transfer of Bitcoin via the lightning network, I think this will be the next killer app for Bitcoin. Once labour can be exchanged directly for Bitcoin, it opens up a host of opportunities, especially in the more disadvantaged communities and allows labour to compete as long as they have an internet connection.
