Quote from: wxa7115 on Today at 08:26:23 AM

Quote from: Barikui1 on July 18, 2024, 12:00:37 PM

One major thing most investors has fail to understand is that, greed is never a good thing, especially in this crypto industry, almost all veterans investors knows that when it comes to digital currencies, Bitcoin is second to none, but due to greedy of making 10x to 100x, they will still go ahead and invest in shit coin without taking into consideration the risk attached to it, they gambles with their hard earned money, even when they know how risky it is, some of them don't even know that investing in shit coin or alt are just like gambling, which the possibilities of them losing their hard earned money, is far greater than the possibilities of them making something out of it.

Secondly, most newbies investors that falls for this, are mostly misinformed, they were mostly told the juicy part of it, which is the 10x to 100x, but they weren't told how risky it is to invest in shit coin, until that greedy aspect of most investors are corrected, I Believe that the only way they can learn is on their own terms, which is learning it the hard way, when they have lost all their funds.

I want to go a little deeper when it comes to this and let us use some actual numbers to illustrate more clearly the mistake that it is to invest in those shitcoins, and while it is impossible to calculate in a completely accurate way the expected value of putting money on a shitcoin, let us do it for illustrative purposes.

So, what are the chances that a shitcoin does a 10x while you are holding it and you keep it for long enough to enjoy those benefits? Difficult to know but probably around 1%, and with that number we can make a rough estimation of how much money in terms of percentage you can lose on average when buying a shitcoin.

Getting 10x: 1000% * 0.01 = 10%
Getting small profit: 20% * 0.2 = 4%
Breaking even: 0% * 0.2 = 0%
Small loss: -20% * 0.39 = -7.8%
Catastrophic loss: -100% * 0.2 = -20%

And when we add all of those results we get -13.8%, this number represents the expected value of deciding to put your money into a shitcoin, and while the numbers are arbitrary, they do reflect the reality, as it is often necessary for those interested in shitcoins to get burned several times before losing most or all of their capital, so basically anyone taking their chances with those coins should expect on average a loss close to that percentage of any money put into a shitcoin.

So I hope this illustrates how bad it is to try shitcoins, and anyone considering to use their savings to invest, sticks with bitcoin and nothing else when it comes to this market.

I don't actually agree with your -13.8% because the risk is far higher than that. Perhaps you have not invested in a shitcoin that died and became totally worthless, then you will see that the percentage is far higher than what you posted. I have lost my total invested capital in shitcoins on several occasions, when I was committed to spreading my money across several shitcoin a hoping that one of them that pumped hard will return my capital with enough profits.

Investment in shitcoin is best described as taking unnecessary risk because those who engage in it end up in pain most of the times. It is even shitcoins that bring bad name to Bitcoin.