Cryptocurrency has taken over the world by storm. With recognizable names like bitcoin and Ethereum gaining popularity even amongst people who aren’t as knowledgeable in cryptocurrency, more and more digital currencies have started to appear.
The Shiba Inu coin, the most popular cryptocurrency in 2021 with 43 million views more than Bitcoin, is one of them. In this post, we’ll be discussing the basics concerning the Shiba Inu coin, the difference between a token and a coin, meme coins, the volatility of cryptocurrencies, and how to invest in them.
The Shiba Inu Coin
Along with other coins like the Dogecoin, Doge Dash, and Dogelon Mars, the Shiba Inu Coin are several well-known meme coins. So far, the Shiba Inu Coin, listed as SHIB on their official website, is the only one to pose a challenge to Dogecoin so far.
Its inception is believed to be a result of the popularity and trend gained by Dogecoin after gaining the support of Elon Musk and his tweets. Elon even managed to drive the SHIB token’s value close to 300% by tweeting about how he was getting a Shiba Inu dog.
The Differences Between a Token and a Coin
The main difference between a token from a coin in cryptocurrency terms is that coins have their own blockchains. On the other hand, Tokens are created and reliant on the top of already existing blockchains. In the case of the Shiba Inu Coin, it’s a token built on the Ethereum-blockchain instead of actual competitor coins like the DOGE and BTC that have their own blockchains. To put it in simpler terms, a token represents what you own, while a coin denotes what you are capable of owning.
With a trait like Shiba Inu’s, where its value rises out of nowhere to 300% just because of a single tweet, it’s obvious that these tokens and coins are heavily reliant on hype, pop culture, and an understanding of how the internet and memes operate. For example, the Dogecoin was coined from a viral photo of a Shiba Inu in 2010 that has since then become one of the most recognizable memes in the internet.
While it’s safe to say that meme coins are definitely innocent in nature, meme coins are incredibly risky ventures. Like most cryptocurrencies, without proper guidance and understanding of how trends and the market works, it’s easy to lose a lot of your investment to frauds, exploitation, and blissful ignorance.
The Volatility of Cryptocurrencies
In comparison to other investment tools and currency like that of entire countries, cryptocurrency, aside from stable ones like Bitcoin and Ethereum, which are less likely (but still very possible) to drop in value, Cryptocurrency is volatile because a majority of them are still at a very nascent stage.
Considering the law of supply and demand and other factors like media hype, government regulations, and of course, investor and user sentiments, the volatility of cryptocurrencies is very high.
Investing in Cryptocurrency
There are three ways to earn money through cryptocurrency. The first is to mine cryptocurrencies through computer equipment. The second is to become an investor (which implies long-term or at least mid), and the third is through trading.
Crypto mining is the most complicated, and it demands background knowledge in setting up computers and computer software. Investment is generally long-term and is risk-averse, but still definitely high considering the volatility of cryptocurrencies like the Shiba Inu. On the other hand, trading is actually a preferred way to earn money in cryptocurrency because even if a currency’s value drops, profit can still be made, and losses can be cut.
For meme coins like the Shiba Inu, momentum trading and day trading are two of the better approaches towards it.
When investing in cryptocurrency it’s important to understand that dedication and willingness to understand is a prerequisites. However, there are a lot of specifics that have to be learned before you can start trading, mining, and long-term investing, and it’s highly suggested that you take the time to understand it before opening your wallet.
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