Just stepped into cryptoland and are attracted by projects such as Shiba Inu coin and Safemoon? then this one’s for you!
Cryptocurrencies provide users the freedom to control their funds. Paired with blockchain, this technology removes the need for intermediaries. Holders are free to buy whatever coin they like, supporting projects they truly believe in with no restrictions.
But as with all great things, this freedom comes at a cost. You may control your money with cryptocurrencies, but that also means no one can protect it aside from you. A lack of understanding combined with the desire to get rich quickly has seen many buyers lose their holdings to projects that aren’t what they seem.
Shiba Inu & Safemoon – Safe Choices or Questionable Money Sinks?
For every legitimate project like Bitcoin or Ethereum, there are ten scam coins designed to steal your money. These sketchy assets often take the form of a meme, having no purpose other than to get a minority rich very quickly.
Essentially, early holders will promote a coin, promising high returns and a great platform to help grow. As word spreads, users buy-in, and the price pumps, which spreads the word even more, making the project a type of pyramid scheme. Suddenly, the early holders have multiplied their earnings and sell out, crashing the price and scamming those they invited in.
The only ones profiting are those on the ground floor, which is a few compared to the many who will get rekt.
It’s the retail investors that lose out on these projects. By the time a coin gains traction on social media, it’s often too late. The early buyers are already prepped to sell.
Two recent projects, Safemoon and Shiba Inu coin, exhibit similar signs of uncertainty.
Shiba Inu
The latter is a self-proclaimed “Dogecoin Killer” and meme token exchange platform. It’s banking off of the Dogecoin fame, using the now-famous Shiba Inu face to attract users. Compared to Safemoon, Shiba Inu is a more blatant meme coin.
Recently, the anonymous creators of Shiba coin sent Vitalik Buterin – the creator of Ethereum – 50% of all Shiba in existence, hoping at best that Vitalik would endorse the project or at worst that he’d burn them and generate scarcity. Not wanting to cause drama, Buterin burned (got rid of) 90% of those holdings, donating the last 10% to a covid relief fund in India. That 10% was worth $1.2 billion, and the project value crashed shortly afterward. Users wanting to get in on the next meme coin sensation got rekt.
Safemoon
Safemoon is looking to build an NFT exchange, a video game, and has other promised features. However, it’s also been considered a meme coin for various reasons. Namely, one Dave Portnoy, the founder of Barstool Sports, has been shilling it despite having “no idea how this works.” “It could be a Ponzi Scheme for all we know,” he states.
Generally, when a big figure promotes a coin, tons of regular day traders get involved. The ones who got in on the ground floor then sell, losing those new investor’s funds. There’s no legitimate growth from long-term holding. Just a cycle of pumping and dumping. This is where crypto’s bad reputation comes from.
There’s Always A Catch
What’s problematic isn’t so much the projects as it is their supposed appeal. Early investors are involved with both, looking to spread the word on Twitter and other social media. They’re appealing to the newbies in the cryptocurrency space, promising riches if they invest. Dogecoin is a big example of this, having seen its first TikTok pump and dump last year. Some YouTube channels dedicate their content to such pumps. It’s perfectly understandable how newer traders could fall for this so-called “expert” advice.
If a project like Dogecoin could help people pay for college and housing, why wouldn’t Shiba Inu? As for Safemoon, the project saw a massive social media push this April. It pushed the price up over 1000%. As of this writing, Safemoon is ranked 49th in terms of market cap, putting it largely above many projects with functioning and legitimate products.
It’s worth noting that Safemoon appears to have a somewhat reliable mission and team behind it, but many are skeptical and for good reason.
Do Projects Like Shiba Inu & Safemoon Put Crypto At Risk?
Projects like Safemoon and Shiba Inu – that have the potential to absolutely wreck outsiders coming in – contribute to the poor public opinion of cryptocurrencies. They claim it’s a scam and that everyone in the space is out to get you. While that’s the case for some projects, it’s certainly not the case for all. In fact, a little research goes a long way in protecting yourself here. It’s entirely possible to learn about legitimate projects and acquire cryptocurrencies for reliable, long-term profit.
If users fail to invest in long-term projects, scam coins are much more likely to take over. Such a scenario would put cryptocurrencies in the same league as multi-level marketing schemes or Ponzi Schemes – taking advantage of get-rich-quickers rather than building something legitimate.
Funding dependable projects with an achievable use case is the only way to give crypto the reputation it deserves. With great power, comes great responsibility.
Things To Look Out For
The number one thing to keep in mind is a project’s team. If you want something worth your time and effort, look at the people building it. Check their credentials and their mission statement. Is the team open about their backgrounds, or are they shrouded in mystery?
Does the project have a relevant and long-term use case? Do you genuinely believe in it? Are others on the same page? Check social media and see what people are saying about the cryptocurrency. If the team is consistently communicating with their users, and discussions are civil and informative, a project is probably worth their salt. Also, make sure token allocations are up to snuff – if the team holds a ton of locked tokens or the market cap is suspiciously high.
You can check such wallets on blockchain explorers like bscscan or etherscan, for example. If the vast majority of tokens are in one wallet, you might have a project to worry about.
Number one rule is to always DYOR (do your own research). And never go all in, favour DCA (dollar cost averaging).
Education Is Key
Companies in the cryptocurrency space, like Ledger or some exchanges such as Gemini, Binance and Coinbase are a great choice. These sources provide comprehensive, easily understandable guides and videos for beginners. Of course, it’s vital that your educational sources are solid. It might be easy to follow a random YouTube and Tiktok influencer or join a Discord channel, but your best bet is to learn from vetted experts.
Once you finally decide on a project, don’t forget about security! Considering it’s best to hold your assets for the long-term, you’ll want the best storage possible. This is where we come in. Our hardware wallets come with top-of-the-line security, and we provide a beginner-friendly user interface that even your grandma can understand. If you’re going to acquire cryptocurrencies, make sure to treat them right.
All that being said, Ledger does not provide investment advice. This article is simply to help make you more aware of the risks prevalent in the cryptocurrency space. We want you to be safe on your cryptocurrency journey, and education is the best way to do so.