Dogecoin, Bananacoin, Putincoin: Jokes and Scam Stirring Up Interest to Crypto

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Last December American software developer Rishab Hegde launched his own cryptocurrency called Ponzicoin. As its website put it: “The world’s first legitimate Ponzi scheme… shill this coin heavily to your family and friends like a f*cking sociopath”.

Despite Hedge saying frankly in FAQ the currency is a facetious scam with easily hackable protection, some would actually put up into Ponzi tokens. So the developer had to close the project having claimed the prank went too far.

Ponzicoin is a striking example of gold crypto fever spreading around the globe. Manifold rate growth of Bitcoin and altcoins has sparked interest among investors and market speculators who started investing into crypto with the view to make a fortune. Along with Bitcoin, a top-in-the-line currency, the market is occupied by altcoins of all sorts from truly reliable cryptocurrencies or tokens to sheer scam or mock projects.

The names for some of them are indicative indeed: jesuscoin, bananacoin, putincoin, trumpcoin, titcoin and potcoin. Given lack of regulation and accurate information on some projects low skilled investors find it hard sifting out ashes from cinders.

How did it come? The point is hundrends of altcoins are created during ICO. Some companies actually want to collect money while others deliberately cheating its investors and making away with the funds. The latter ones are called scam in the crypto community. It is often challenging for unexperienced investors to tell the difference between scam and real project so cautiousness and thorough analysis are needed before investing.

But what is to be done with ludicrously-named cryptocurrencies? Some of them though called amusingly are in fact committed projects with far reaching goals. For instance, bananacoin with each token backed by one kilogram of bananas grown on eco lands of Laos. That is how investors can make profit on banana rate growth.

There are also other examples for prank-went-too-far cases when a cryptocurrency created for fun comes to fame. Thus, Dogecoin established in 2013 adopted its name from the Doge meme. Finally the token gained popularity in the community with market cap making up to $1 bln at the start of 2018 and about $500 mln to date. Remarkable enough, despite its joky name Dogecoin is quite efficient and reliable cryptocurrency.

How is it? The point is that crypto community comprises in the main young people hooked into Internet, they see value in good humor and like memes.

While Bloomberg and other reputable companies are the source of stock exchange news, crypto community prefers more social-oriented resources like Twitter or Reddit.

This causes another problem of pump & dump. A group of anonymous users may choose some unpopular cryptocurrency, put up money, make use of social platforms for advertising and attract people from outside thus increasing the price several-fold. At this moment the anonymous ones withdraw funds having augmented their investments considerably. The people from outside get outsiders indeed as the token rate sinks.

Such schemes and crypto scams get into the focus of regulatory bodies which try to inform and protect people. Exchange and Securities Commission's chairman used to warn ICO tokens may well be subject to manipulation, while Facebook, the world’s largest social network, began blocking crypto ads.

Regardless of these measures, crypto market still remains a wild territory many unexperienced investors go exploring every day. Yet they can easily be distracted by a pop meme or fast and high profits.

Robin O’Connell, Chief Revenue Officer at Uphold exchange, has got something to recommend for such investors:

“Do your homework. Evaluate the management team and track record. Don’t just track Twitter, as the chances are people are just pumping coins they own”.