As they say, a sucker is born every minute, and in the shitcoin space, one is minted every minute. Eventually, one of your loved ones will fall victim to this plight we currently find infiltrating wallets worldwide. If you thought inflation was an attack on your bank account, shitcoins are an all-out war for your remaining purchasing power; the problem is, unlike inflation, you’re willingly letting them into your account like a trojan horse.
Shitcoininig is especially hard to own up to because it’s a judgement error and a self-inflicted wound; our pride gets the better of us, and we don’t want to admit we were wrong.
As a recovering shitcoiner, yes, I am over two years sober now; I know how hard it is to listen to reason when you’re making sick paper gains, bro.
- Look at these gains; how can you tell me this is a scam?
- I put it in at X, and it’s now Y; how am I losing?
I was that guy, and now I am on the other side of those conversions, and I know how frustrating and infuriating it can be to try and reason with someone with that mindset. It’s not easy; to break through, as shitcoin indoctrination uses several marketing tactics to get you hooked.Â
Once you’re hooked you’ll defend your position even when the facts are against you, shitcoin Stockholm syndrome is real.
What is Stockholm syndrome?
Stockholm syndrome is a coping mechanism used by captives in an abusive situation. Instead of rebelling, captives look to support their captors. The hostages tend to develop positive feelings toward their captors or abusers over time and will sympathise with them and even defend them. This condition applies to situations of abuse, be it mental or physical abuse, and is clearly evident in these religious zealots we find in the shitcoin space.
Retail investors in the shitcoin space look towards these so-called tech titans leading the innovation as saviours, they’re going to deploy capital behind these digital token creators, and for their faith, they will be rewarded handsomely. This behaviour gives founders a god complex that they milk to death both for clout and capital, while the investors turn into acolytes that are a protective cacoon against criticism.
Why do people fall head over heels for shitcoins?
Wealth without work will always be a compelling pitch to the average person, even in the best of times. But when you factor in how fiat robs us of our time slowly and the wage deflation we’ve been having for the average working-class person, it only makes the narrative that much more attractive. The shitcoin market, because it’s unregulated, can get away with messaging that wouldn’t fly in other sectors, and people will tell you anything to get you to part with your hard-earned money.
Who among us doesn’t like to be told what they want to hear? I also want to be a fairy princess riding a unicorn and drink from rivers made of gumdrops; who doesn’t?
The idea that you can put a little bit of capital in and, with no effort, walk away a millionaire is appealing to most people. Shitcoin’s pitch you the idea that to get ahead, you need to get into a hypercharged version of fiat and then get out when you’re out ahead of inflation.
Bitcoin’s narrative is to work hard, produce goods and services people like, acquire money and opt out of fiat with your savings; when you compare the two pitches, shitcoins will capture the hearts and minds of most people.
Sunk cost fallacy
Now once the shitcoiner has been sucked in by the rainbow land narratives, they’ve most likely pulled out the credit card and signed up to an exchange, doxing their identity and bought a few of these leveraged bets. Once you’ve made the purchase, many do not want to walk away with a loss; they want to be told they are right because that’s why they took the bet in the first place.
Once you’ve committed the product of your labour into a project, you become emotionally attached, you’ve sold yourself on the idea and the potential outcome, and you’ll sooner double down than give up on that dream.
Complexity theatreÂ
When you explain the difference between bitcoin and shitcoins, you’ll be met with technical reasons why this coin is so much better. Never mind the fact that this person has no grounding in coding or cryptography; they’ll speak about the features and have no idea what trade-offs were made to provide these features.
They’ll talk about the speed of transactions, low cost of transactions, smart contracts, yield earning platforms, NFTs and a whole bunch of junk that is either centrally controlled or a massive attack vector; they’ll brag about it not knowing the full story.
There’s always a new feature coming up; there’s a whole roadmap of what they see as new aspects to the chain, where bitcoiners see new vulnerabilities to the chain. Safety, security and privacy are completely ignored in shitcoin land, and 100% of the focus is on how many features will be pushed out and how much money can be made in the shortest amount of time.
Confirmation bias
When you try to offer them information about the poor tokenomics, how the coin is up in fiat value but down in satoshi value, when you show them that there have been issues with the chain, or individuals with a sketchy crypto past are running the show. They’ll always have a new update, a news story, a new coin to feed their confirmation bias.Â
There is always a positive spin coming out of their echo chambers to obfuscate the apparent flaws of the ecosystem they are betting on. Unlike bitcoin, which has no marketing department, shitcoins spend millions to craft colourful stories and marketing material to keep you on the merry go round.
It could be something like smart contract audits, partnerships with big brands, influencers and celebrity endorsements or listings on new exchanges, the list of bullish sentiment is always as long as a romance novel, and the negative press gets drowned out.
Survivorship bias
When you explain to them that the coin they’re in is the same as the last ten coins that came before this one, they’re not going to listen because this one is still in the top 10. This one still has a clean record of now blow-ups; this one has only gone up since they held it.
This one made someone they know a bunch of money, and they use this survivorship bias to keep doubling down on their bets. At this stage, the hopium huffing has reached problematic levels.
Shaping the financially vulnerable
I can’t speak for everyone, but talking about money has always been a sensitive issue; people tend to avoid it; it’s seen as a sensitive topic. Since we’re not open to discussing money in households and social circles, misinformation runs wild and why normies tend to follow paths towards wrecking themselves under the guidance of financial advisers and banks.
You were being primed in the fiat system to be an exit liquidity sheep, and cryptocurrency is a natural extension of that financial syndicate where profits for me and empty promises for thee.
When you’ve always trusted third parties, your ability to discern bullshit from fundamental truths doesn’t exist. You don’t know how to price risk; you don’t know how to value a network. You’ve always outsourced those skills, so you don’t have them.
So you rely on compelling stories and authorities for guidance; crypto takes that frame of mind and dials it up to 1000 since it doesn’t follow securities laws or advertising standards and exploits people by the millions.
Can you make money with shitcoins?
Yes, there is a reality where you can make money in shitcoins; there is also a reality where Halle Berry is my baby mama, but it’s down to the likelihood of that happening. If you get in at the right time, if you time it just right, you could catch a wave and score; sure, I can accept that.
We often see PR puff pieces on the guy, kid or woman who rolled the dice and struck it lucky on a shitcoin; these stories are excellent marketing material to sucker you into thinking you’ll get your come up.
But do you have the edge to beat out professional traders, algorithmic trading and those with information asymmetries like developers and seed round investors? I highly doubt that, as a click trader in the crypto market, all you are is exit liquidity for people who started the project.
Paper profits
Most crypto trader bros are only in profit on paper; they hardly ever realise their gains due to greed; there’s always a new scam to roll your “profits into” or the unit bias of getting to, let’s say, $100k or $1 million.
Since people think in fixed unit terms and discount the risk, they’ll keep pilling in on their sunk cost, hoping for that one big win, and the more you pile in, the more you leave for the protocol owners and early investors to extract out of you.
Taxed to the max
If you take profit, you would also need to contend with all the taxable events you created moving in and out of tokens or staking over short periods. Capital gains laws don’t look favourably on short-term realised profits, but shitcoiners don’t think about tax efficiency because they’re investors in name only.Â
They’re not investing; they’re gambling, so they never factor in the tax obligations, and when they do realise a profit, it’s not near as much as they thought it would be when they cashed out.
Opportunity costs
Sorry to say it, but most retail shitcoiners aren’t very good at math, nor do they understand opportunity costs. All they understand is basic percentages and nominal increases, not real returns. So let’s say you held your shitcoin for 2-3 years and staked it, you put in $100, and now it’s worth a little more; sure, you made a profit, but was it the most efficient trade?
Consider the following:
- How much of that profit is due to fiat inflation and not purchasing power increase?
- How much liquidity is left in the market for you to exit that position?
- How much would your position in bitcoin have been if you bought it and held it over the same period?
Why do I bring this up?
Because this is the worst-case scenario for a shitcoiner, when they’ve hit it big early on, that breeds overconfidence in themselves and the market. The hot hand fallacy takes over, and you think what happened in the past will extend into the future. The intoxicating idea that you can replicate success is often the driving force that sees shitcoiners lose it all instead of walking away and counting themselves lucky.
Presenting the facts
Every shitcoiner will have a different level of resistance, and it’s up to you to decide if they are at a level where they are willing to have an honest dialogue. If they are, you can present the arguments I mentioned above regarding paper profits, opportunity cost and tax burdens as a basis for the argument for generalised shitcoining.
Then you can tackle the specific coin they’re in, show them some of the bad press they may not have seen, memory-holed or discounted and ask them about it.
Show them examples of shitcoins incidents like:
- Rug pulls
- Exit scams
- Hacks
- Insider trading
- RehypothecationÂ
- Custody risk
Share stories that you may have personally of your shitcoining days or stories of those you know in your social circle. Build a case and show them all the risks they’re taking and the possible outcomes other than them walking away from a trade as a newly minted millionaire.
Taking personal responsibility
Now that you know what you’re up against when dealing with a shitcoiner, you have to realise that no amount of shouting is going to break their resolve, you can offer alternative opinions and resources, but ultimately it’s up to them to make the decision for themselves. You can be a voice of reason and a guiding hand, but you can’t take the shitcoin out of the shitcoiner, only they can do that.
To truly be a self-sovereign bitcoiner requires critical thinking, you can’t hide behind group think and regurgitated talking points. The shitcoiner will need to break ties with the echo chambers communities themselves if you are to make it out of the shitcoin quagmire.
The best way to learn is to get burned
Sadly all the reasoning in the world, facts, and compelling arguments on why shitcoins are a losing game won’t get through to everyone. Some will have to learn the hard way by losing all the money they put into shitcoins first before they can revisit the ideas you’re trying to put forward. When that day comes, and oh boy, it will come, understand that this is a painful knock financially and mentally, and their ego is well and genuinely bruised. Try to offer some words of comfort, let them know it’s not too late to salvage the situation by getting on the right side of the trend, and that bitcoin’s NGU technology can repair some of the self-inflicted damage.
Bitcoin is the long game
Dealing with shitcoiners can be challenging; it’s even more complicated when it’s someone you care about, and you don’t want to see them get hurt. If you feel you’re not gaining any ground with your intervention, it’s time to take a step back and exercise patience, kill the conversion there and focus on your education and stacking.
As your commitment to bitcoin continues to reap the rewards, you become an example they can look towards as their path starts to lead them towards the riskier territory. Bitcoin is a longer-term game, their flavour of the moment may capture their attention now, but when it dies, they’ll eventually come looking for answers, so you best be ready.
So how have you been dealing with your shitcoiner friends and family? How did you get through? Let us know in the comments down below.
