Edward Snowden, former NSA agent consultant, has cautioned his followers against investing their hard-earned money into Shiba Inu.

Shiba Inu is a currency is a low-utility meme coin that has generated and sustained widespread interest and engagement. According to John Wu, president of Ava Labs, the team behind Avalanche, meme coins are driven by culture, and they represent an underlying theme or movement, rather than special use cases. The creators of Shiba Inu have said that the token was more a social experiment in community building and understanding the online memetic behavior of a group of high-risk traders, rather than being a financial investment on its own. Shiba Inu optimists argue that the smart-contract capabilities, non-fungible tokens, and opportunities for liquidity mining offer utility beyond community.

Naysayers argue that the rally may not be sustainable due to the coin’s valuation, pointing to the greater fool theory. The greater fool theory, according to Investopedia, argues that prices go up because people are able to sell overpriced securities to a greater fool, irrespective of possible overvaluation. When an investor acts in accordance with the greater fool theory, an investor will purchase even overvalued shares without giving consideration to their value, hoping to palm them off to someone else who will sell them to a “greater fool.”

Shiba Inu’s amazing rally

Snowden’s concern revolves mainly around people making huge financial sacrifices, like mortgaging their farm to buy Shiba Inu. He is not concerned about the fact that people buy “garbage.”

Shiba Inu was up 826% this month, becoming one of the ten largest cryptocurrencies by market capitalization, and threatened to unseat Dogecoin as the biggest meme cryptocurrency the week of October 25-31. Its value at the time of writing was .00006230. 

Shiba Inu’s history

The Shiba Inu token was created in August 2020 by a pseudonymous founder by the name of Ryoshi. Ryoshi calls Shiba Inu “an experiment in decentralized spontaneous community building” in the token’s whitepaper. The Shiba Inu token is an Ethereum-based ERC20 token, and has a total supply of one quadrillion.

The largest risk with meme tokens such as Shiba Inu token is the potential for its creators to scam the community by using rug-pulls, or that it would be shut down without giving notice to its users, resulting in them losing their money.

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The post Snowden Warns Against Meme Tokens Following Recent Shiba Inu (SHIB) Mania appeared first on BeInCrypto.

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