How Shiba Inu Coin Got Its Value

Like Shiba Inu Coin What Actually Gives A Cryptocurrency Like Shiba Inu Coin Value?

You may be wondering how did Shiba Inu Coin get its value? Or may how did Dogecoin get its value? Or maybe how did Bitcoin or Ethereum get their value?

Well, let me explain…

How Cryptocurrency Gets Value

So let’s start from the beginning and ask ourselves where the coin actually came from for example Bitcoin, Bitcoin is generated every time a block is mined and there’s a hard cap on the total number that will ever exist.

Having a hard cap is what makes the coin more scarce and more valuable than a coin generated from thin air. Many projects like this will pre-mine the sum total of coins that will ever be on the network, then release them slowly over time to users, or they’ll create a large supply for a crowd sell and then continue to generate more through mining on the network.

This approach isn’t wrong or bad, but it’s the more difficult route when creating value for the coin. The coin with 1 million in existence will substantially be worth more than the coin with 1 billion in existence so this is important to keep in mind.

Is the supply of the token growing or shrinking? If so, how fast?

Another factor in the value of the coin is the method in which it is created. Is it brand new? or is it built on top of an existing coin? A brand new coin like Shiba Inu Coin, Dogecoin, Pi Network, Bee Network, TimeStope, etc. has huge potential with a strong team and good marketing. A lot of value can be hyped up around these new projects if it can deliver on its promises that will bode well for its value. If it can’t, then it has a little safety net to prevent it from zeroing out without the community’s support of a fork or chain it’s built on.

It lives and dies purely on how well it can prove itself. A fork of an existing coin has the benefit of building off infrastructure and community that already exists. This is good if it’s something the community has wanted for a long time as they’ll gain users very quickly, but if the fork is contentious the coin could split the community or be attacked. These are all important in determining the coin’s value.

Similarly, a coin built on top of an existing ecosystem like Ethereum can leverage the same community and developer support that a fork might but without much of the risk. Your app simply exists on the chain and people can use it if they find it useful.

Coins built on coins have a hard time growing beyond their parent currency. You’re also at the mercy of the chain you built on. The major change in the parent chain destroys your project which there’s not much you can do. We can now see that how you generate coins are very important to how the market will value them.

One more major faucet of devaluation is the type of coins you generate there’s a ton of different types but we’ll look at the big ones. Is the token fungible or non-fungible? Basically is it a currency or is it a collectible? Any given collectible can be worth more than one unit of currency but as the word collectible would imply there’s very few of them.

Fungible tokens are prolific meaning millions of them, they get this property because they can reliably trade them with other people for a set price. A non-fungible is the exact opposite it’s rare. Since it’s rare, its value is much higher but at the same time, it’s only worth something to the right people. Now is the token a utility or security this is extremely complex but at the minimum, you should ask yourself does this token allow me to access a service that I couldn’t otherwise? Does it perform a function or is it just the token I’m holding with the hope that it increases in value?

This is one of the main factors that go into determining the value. So now you know what actually gives a cryptocurrency like Shiba Inu Coin its value.