Bitcoin had better watch its step: a new cryptocurrency is in town, and it's taking the Internet by storm.
What started off as a joke intended to take the mick out of cryptocurrency has become a money-making sensation.
The shiba inu cryptocurrency has shot up in value by more than 45 percent in the last 24 hours, becoming the eighth most valuable cryptocurrency in the world and making some people very rich in the process.
In one case, an early investor who spent $8,000 on the so-called 'meme coin' last year now has a portfolio worth $5.7 billion after buying trillions of the virtual currency.
What is shiba inu and how does it work?
A spinoff of 'dogecoin', shiba inu (or 'shib') was created in August 2020 to take the mick out of other cryptocurrencies like Bitcoin which have soared in value despite having very little real-world use.
Like Bitcoin, it uses decentralised blockchain technology. That means that no central bank is in charge of regulating its value, creation, or circulation. Instead, it is controlled and verified by a huge network of people around the world who buy, sell, and trade with it.
Their transactions are listed on a blockchain, which records transactions in a 'ledger' to verify their authenticity. In this case, shiba inu uses the Ethereum blockchain.
Whereas Bitcoin is a currency that must be 'mined', Ethereum enables companies to build applications and new tools, so the value of cryptocurrencies on it comes from the community of people invested in it. As more people buy into it, the higher the value goes.
This means the value of cryptocurrencies like shiba inu can be extremely volatile. Just as it skyrocketed in value by 190 percent this week, it can also crash dramatically, causing you to lose money.
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Should I invest in shiba inu?
Cryptocurrency investments are incredibly risky, and you could lose all the money you put into it. This is the most important thing to remember before making any major decisions, particularly when it comes to 'altcoins' or cryptocurrencies that aren't Bitcoin.
There is no guarantee that shiba inu will continue to increase in value or even hold its present-day value, particularly as it is so sensitive.
To put it in perspective, a negative tweet about shiba inu from Elon Musk, who invests heavily in competitor dogecoin, sent the value of the crypto spiralling almost immediately.
"As I've said before, don't bet the farm on crypto! True value is building products and providing services to your fellow human beings, not money in any form," Musk wrote.
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