What Is Shiba Inu And How Does It Work?

Last Updated October 14th 2022

6 Min Read

When millions of people throw their support behind a virtual currency, then you know it is an asset worth investing in.

With the returns on investment (ROI) Shiba Inu Coin (SHIB) has provided its investors, we can all agree that it is one of the hottest cryptocurrencies in the market today.

The announcement of huge purchases of SHIB constantly results in the value of the token rising significantly.

So much so, that a single Shiba Inu Coin went from being worth $0 in January 2021 to more than $0.000088 in October the same year.

As talks of the digital currency have gone global, several industry analysts and experts have made suggestions that SHIB could replace Dogecoin as the go-to meme-inspired crypto coin.

However, cryptocurrencies continue to face opposition from numerous regulatory bodies. In June 2021, the Head of the Bank of England, Andrew Bailey warned citizens of the United Kingdom about the unpredictability of BTC and digital coins in general. He pointed out that its patronage makes him nervous.

With all the hype, you may have been wondering – what is Shiba Inu and how does it all work?

What Is Shiba Inu Coin?

Shiba Inu Coin (SHIB) is often described as a cryptocurrency, a digital currency, or a virtual currency. It is a type of money that is completely virtual.

SHIB is like an online version of cash. Based on stores that list it as an option of payment, you can use it to buy products and services.

Due to the popularity of the use of cryptocurrencies as a medium of exchange, many companies are beginning to buy into the growing influence it commands. As a result, several companies are considering listing SHIB as a payment method.

Several petitions have been signed to allow PayPal customers to buy, hold, and sell Shiba Inu Coin just like other coins such as Bitcoin (BTC) and Ether (ETH).

You should note that the physical representations of Shiba Inu Coins you see online do not have any real intrinsic value without the private codes printed inside them.

How Does Shiba Inu Work?

Each Shiba Inu Coin is a computer file that is stored in a digital wallet on mobile applications and cryptocurrency exchanges.

Digital Wallet Holders can send and receive Shiba Inu Coins among themselves through the internet without any help from financial institutions.

Every single transaction is recorded in a public ledger called a blockchain. This makes it possible for transactions to be traced. What's more, this also helps prevent fraud and double spending of the digital tokens.

How Do People Get Shiba Inu Coins?

There are three main ways people get Shiba Inu coins.

You can buy Shiba Inu Coins using real money (USD, EUR, or GBP).
You can sell things physically and digitally and request payments by Shiba Inu Coins.
You can get Shiba Inu Coins through rewards from mining using personal computers.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

How Are New Shiba Inu Coins Created?

For the Shiba Inu system to work, people build special computers to enable the generation of Shiba Inu Coins.

The computers responsible for the creation of new SHIBs normally solve complex problems. This results in rewards of SHIBs that are kept by miners. The process of setting up special machines to try and get Shiba Inu Coins is technically called mining.

If you decide to go into the mining of Shiba Inu Coins independently, it could take a long period before you get rewards. You could end up spending more money on computer hardware and electricity than the number of SHIB tokens you could get. The risks outweigh the rewards.

This is the reason why several people get into mining in “pools” (groups) so that they can share rewards.

Why Are Shiba Inu Coins Valuable?

Shiba Inu Coins are valuable because they have the two attributes of currency which are a store of value and medium of exchange. In line with what economic experts symbolize value with; Shiba Inu Coins are valuable because fans of the token are willing to exchange them for real goods and services, and even cash. Aside from that, people are willing to buy thousands, millions, and billions of the coins to make gains in the long term when there is an increase in its price.

Why Do People Want Shiba Inu Coins?

Many people like the fact that transactions involving Shiba Inu Coin do not have to go through the hands of centralized banks.

Moreover, fans of the token can spend their SHIBs anonymously. Although all transactions are recorded, it would be difficult for someone to know the real identity of the person behind a particular transaction.

Others have expressed the consistent stream of income Shiba Inu brings them through day trading and short to medium-term investments.

On social media, millions of people share their interest in the currency and these unofficial endorsements of the coin have seen the coin rise significantly to heights so-called experts could not forecast.

Check Out: Is Shiba Inu Coin A Good Investment And Should I Invest In SHIB?

Is Shiba Inu Secure?

Thanks to the complexity of blockchain technology, it is extremely difficult to counterfeit or double-spend Shiba Inu Coins. This does not mean that your coins cannot be lost.

If you lose your passcodes to your Shiba Inu wallet, there is a high probability that you are not going to regain access to the wallet again. In that way, you could lose all your SHIB holdings.

Moreover, there have been numerous instances of hacks on several cryptocurrency exchanges. Therefore, it would be in your interest to find reputable organizations to buy, hold, and sell your holdings.

Due to the highly unpredictable nature of digital coins, many people feel there isn’t a need to hold tokens such as SHIB. Although its price increases and decreases within short periods, having the right investment strategy in place through a secured wallet or exchange can bring you the peace needed to carry on with your cryptocurrency investments.