Shiba Inu - Explanation and How it Works
Netgenz - Stock | Shiba Inu is a type of cryptocurrency, or digital currency, that only exists online. Prices go up in 2021, many times over, but they are still being traded for small fractions of a penny. However, that was enough to make the coin one of the most popular cryptocurrencies in the world, according to CoinMarketCap. But don't confuse this coin with the Japanese breed of dog that inspired its name.
Here's the Shiba Inu and what it's important to know about how it works
Is that Shiba Inu?
Created in August 2020 with a founder named Ryoshi, the Shiba Inu takes its moniker from the cuddly dog of the same name. And not to be confused with the same dog-themed Dogecoin, which features a similar type to its mascot. In contrast, Shiba Inu refers to himself as a "Dogecoin killer."
Like many other cryptocurrencies, Shiba Inu works on a decentralized network of computers that run databases called blockchains. This blockchain database searches and maintains crypto coins, confirms business transactions and writes every business transaction that occurs with them. So the database eventually becomes a record of the cryptocurrency movement that has been going on for a long time. Exclusively, Shiba Inu runs on the Ethereum blockchain, offering the security and functionality of that base.
Shiba Inu trades for just a fraction of a penny. In November 2021, one coin is trading for less than $0.000005, so around 200 coins equal 1 cent. Despite the ridiculously small price tag, the value of all Shiba Inu coins is over $26 billion, due to the roughly 549 trillion supply spread, according to CoinMarketCap. It has almost 1 quadrillion valid coins. However, around 40% of the coins are "burned" regularly by one of the founders of Ethereum, Vilatik Buterin, which means that the coins have been efficiently destroyed and cannot be reused. The Shiba Inu rose in price throughout September 2021, when it was added to the Coinbase base.
What is the Shiba Inu doing?
The Shiba Inu is completely separated into tokens that help all the functions of the cryptocurrency ecosystem:
- SHIB - This is the base currency of the Shiba Inu which can be traded and used as a medium of exchange.
- LEASH - This token is limited to 107,646 units, making it the most limited of the Shiba Inu-related coins. It rewards bets for verifying business transactions in cryptocurrency.
- BONE - This token has 250 million units, and is used to allow those who use Shiba Inu to vote on various proposals.
The Shiba Inu has other features of a commune, including ShibaSwap, its own decentralized base for trading coins, and Shiboshis, a kind of non-fungible token (NFT).
The cryptocurrency continues to riff on dog-themed coins across its ecosystem, including the crypto white paper, which the founders call “WoofPaper.” Meanwhile, referring to those who own and support the coin as "Shib Soldiers."
Is the Shiba Inu a good investment?
The Shiba Inu has grown significantly throughout its rapid presence, but that just doesn't make for a great investment. Instead of watching prices increase and falling into a fear of losing, it is important to understand what you are buying and why its value may or may not increase. In the case of the majority of cryptocurrencies, they are not backed by the assets or cash flow of the business that triggered them.
Asset support and cash flow are something that compares traditional investments to cryptocurrencies. With shares that you invest for the future of the business, then if it goes well, your investment will be successful over time. And you also have a legal claim for the business.
On the other hand, with cryptocurrencies like Shiba Inu, your investment is not backed by the same assets or cash flow though. One of the ways you earn money is when someone arrives and is ready to pay you more for your coins. So the specific drivers of cryptocurrencies by the day are confidence and stakes. Traders win when they can get someone to buy cryptocurrency at a higher price, or what the stupid bigger investment theory calls it.
If the traders' wells run dry, then they do not continue to run to the market to raise prices. This speculative character eludes legendary investors like Warren Buffett from crypto. Finally, the issue of the price of the Shiba Inu is small. Some traders see it as a type of crypto lottery ticket because they can afford, say, 1 million of these coins (for $50). Like penny stocks, they think if the coin only goes up to a penny, they will make a lot of money. Or even if the Shiba Inu went to a Dogecoin trading place, they would cash out their chips. While the price of the coin may eventually reach the moon - the odds of challenging it are very high.