Not all digital currencies are created with the same goals. Each coin's creators have specific objectives and target certain consumer groups. Some chains are designed for developing dApps, others for secure anonymous payments, and some simply for entertainment.
The latter category includes so-called "meme" cryptocurrencies, created based on internet memes, and funny pictures shared for amusement. This article explores one prominent example of this category and its key features.
To learn more about other cryptocurrencies, their main characteristics, and their rankings, check out the article "Cryptocurrency ranking."
What are meme tokens?
Meme cryptocurrencies are a distinct category of digital currencies, with Shiba cryptocurrency being one of the most popular. Let's look at what these coins are and how they emerged.
Meme coins are based on internet jokes or memes, hence the name. Developers take a funny picture or character from the internet and create a cryptocurrency. Like other cryptocurrencies, these can be bought and sold, but they typically serve no purpose beyond entertainment. Thus, community support is crucial for such tokens. Without it, interest will quickly fade, and the token will vanish from investors' radar.
A classic example is Dogecoin, created in 2013. It gained significant attention, especially when Elon Musk tweeted about it, boosting its popularity.
Meme tokens do not offer real value or services, so most users see them as a tool for quick profit: buying early and selling at peak popularity. However, some projects have evolved into useful platforms. Shiba Inu, for instance, developed an ecosystem with various services, including an NFT marketplace.
What is Shiba Inu?
Following Dogecoin's success, developers created Shiba cryptocurrency. Launched in 2020 by an anonymous person or group known as Ryoshi, it started as an experiment to see if another meme token featuring a cute Shiba Inu dog could become popular.
The creators followed three principles:
- Create it without any financial investment.
- Buy the currency on par with other users post-launch.
- Spend nothing on promotion.
Shiba Inu is fully community-driven, with strong support from the ShibArmy. This support has significantly increased the token's value by millions of percent in a short period.
The project introduced a decentralized exchange called ShibaSwap, allowing users to trade digital assets, exchange coins, and provide liquidity, and stake.
Additionally, Shibarium, a second-layer solution, enhances the chain's scalability, enabling it to process millions of transactions.
An interesting fact about Shiba Inu:
Shortly after Shiba Inu's launch, Elon Musk tweeted about wanting to buy a Shiba Inu puppy. Users misinterpreted this as encouragement to buy SHIB tokens, leading to a surge in purchases.
History of development
As previously mentioned, there are many mysteries surrounding the creation of the digital currency discussed in this article. Even the identity or identities of its creators, who go by the pseudonym Ryoshi, remain unknown.
Initially, the Shiba cryptocurrency was created as a competitor to another, more well-known meme currency, Doge. According to another version, this token was not created to compete with DOGE, but to mock it and the absurdity of this currency’s popularity, which had no real value.
The creators' goal was not to invest any funds in the development of this cryptocurrency. However, there is mention of a certain "influential figure" in the digital currency sphere who provided 10 ETH to allow the currency to get listed on the Uniswap exchange and trade in a pair with ETH.
There is indirect evidence suggesting that this "influential figure" is Vitalik Buterin, the main creator of the Ethereum chain. One piece of evidence supporting this hypothesis is that immediately after the coin's launch, 50% of the total SHIB supply was transferred to Buterin, who then locked them.
The diagram shows the initial distribution of SHIB tokens after the currency launch.
The other half of the coins was locked on Uniswap to later open them for free sale. Interestingly, the project developer or developers did not keep any coins for themselves and had the opportunity to buy them alongside other users after the listing on this exchange.
The connection, direct or indirect, of this project with such well-known figures as Elon Musk and Vitalik Buterin increases interest in its own cryptocurrency. As soon as they take any action or make any statements regarding these currencies, it immediately affects their value.
For example, when Buterin donated a rather large amount of SHIB tokens to fight the coronavirus, the coin's value dropped sharply. Conversely, a tweet by Elon Musk about buying a Shiba Inu, which was not entirely correctly interpreted by users, led to a strong price increase in the discussed currency.
Shiba cryptocurrency
Shiba Inu's platform uses three tokens: SHIB, LEASH, and BONE, each serving a specific function.
SHIB is the primary token, created on Ethereum with the ERC-20 standard. Initially, one quadrillion tokens were issued, the largest in cryptocurrency history. Most were later burned, leaving about 549 trillion in circulation. Ongoing token burning during transactions helps stabilize SHIB's price and prevent inflation. SHIB cannot be mined; it can only be bought on exchanges or earned on ShibaSwap by staking or providing liquidity.
LEASH started as a rebase token tied to Dogecoin but has a much lower supply than SHIB.
BONE is a governance token that allows holders to vote on platform decisions. The number of tokens held determines the weight of each vote..
Ways to earn
We have already discussed the key features of Shiba Inu's native currency, Shiba cryptocurrency, and other tokens used on this platform. In this section, we will delve into the ways to earn income with this currency.
There are several main ways to earn with SHIB, including:
- Trading: This speculative method involves making profits from the coin's price fluctuations. Profits can come from both rising and falling prices. The key is to analyze and correctly predict the currency's future movement.
- Investing: This involves purchasing tokens for the long term, hoping their value will increase over time.
- Farming: This program involves providing liquidity to special funds or pools. Participants receive daily rewards for their involvement.
4. Staking: This involves locking funds for a specified period and earning rewards as a percentage of the locked amount. This method is quite similar to a bank deposit.
5. NFT Trading: The project has a specialized platform where users can buy and sell non-fungible tokens.
Since the value of coins like SHIB is not tied to real currencies or other assets, it can fluctuate significantly over time. Therefore, when choosing farming or staking as income methods, one must consider the risks and understand that the tokens might lose value while they are "frozen."
You can purchase Shiba cryptocurrency on many centralized and decentralized exchanges using other digital currencies or fiat money. Before buying tokens, you must register on an exchange, complete verification, then fund your account and make transactions.
Shiba cryptocurrency vs. Dogecoin
Let us take a closer look at the two most well-known meme cryptocurrencies: Shiba cryptocurrency and Dogecoin. Both emerged from internet memes about cute Shiba Inu dogs but have significant differences.
The primary difference is that both were initially created for fun, but SHIB later developed into more than just a meme token, having a developed infrastructure. Meanwhile, DOGE remains just a meme coin.
Both currencies have low values, making them suitable for small transactions. Additionally, both tokens have strong user communities that actively support the platforms and help them stay in the market and move forward.
Since Dogecoin appeared much earlier, its technology does not allow transactions as quickly as Shiba. However, this is not critical for DOGE, as it was not intended for large transactions. On the other hand, SHIB is a more versatile token used for various purposes.
Moreover, DOGE was created on the Litecoin chain and does not have the ERC-20 standard like Shiba. As a result, DOGE cannot be used for other purposes besides exchange and trading, whereas SHIB can be used for smart contracts, dApps, and other mechanisms available on the Ethereum chain.
Another shared property of both currencies is their high volatility. Their values fluctuate significantly and depend on many factors, although they lead the meme cryptocurrency sector. However, predicting their future is challenging as they lack real value.
Advantages and disadvantages
Like any other cryptocurrency project, Shiba Inu and its native currency, Shiba cryptocurrency, have advantages and disadvantages. Let us look at them in more detail.
Advantages:
- Own Decentralized Exchange ShibaSwap. This exchange allows trading and exchanging various digital currencies, including the project's native token, SHIB. The exchange also enables staking and earning additional income in the form of interest.
- Strong Community. The project has robust community support from active users called ShibArmy. Additionally, community members can actively participate in the platform's development through voting with the BONE token.
- Shiba Inu was created without any governing body, and as mentioned, currency holders can participate in project management. The more coins a user has, the greater their voting power.
- Own Shibarium platform. This platform aims to increase chain throughput and reduce transaction fees.
- The low cost makes this currency very accessible to many users who can buy and use it for their purposes.
Disadvantages:
- Huge number of coins in circulation. The initial issuance of SHIB was the largest in cryptocurrency history. Although more than half of the coins were burned, hundreds of millions of tokens remain in circulation, increasing the risk of inflation.
- Dependence on Ethereum. Since the token was issued on the Ethereum chain, it is reliable but also vulnerable to Ethereum's shortcomings.
- Lack of real utility. While the project has created new services for clients, it has yet to offer anything new or unique.
- Dependence on media personalities' opinions. The project's currency value is highly volatile due to social media posts from opinion leaders. For example, Elon Musk's posts significantly affect the demand and price of meme coins.
Prospects
Shiba Inu is actively developing, transforming from a meme token into an entire ecosystem. The project has launched its decentralized exchange, NFT trading platform, second-layer chain Shibarium, and other services.
Additionally, the project is launching SHIB The Metaverse, a virtual space where users can buy land plots. Users can build various objects on these plots and earn income from resale or rent.
An important factor is that Shiba Inu is directly connected to the Ethereum chain, as the project is built on this blockchain. Therefore, with the upcoming Ethereum 2.0 update, an update to the platform is also expected.
The value of SHIB is influenced by many factors. However, if the platform continues to develop and offer clients new advanced services, we can confidently expect increased demand for the project's utility token and its value.
Considering the enduring popularity of another meme currency, Dogecoin, we can confidently say that Shiba will maintain its position. It may show price growth, making it a potential investment. However, remember that diversification is the best strategy when investing capital. Your portfolio should include assets with different risk levels and potential returns, with cryptocurrencies, including SHIB, being just one component.
Conclusion
In this article, we focused on one of the most vibrant and unique digital currencies—Shiba cryptocurrency. Its symbol is a cute Shiba Inu dog, and the coin was created for fun, following the fame of another well-known meme currency, Dogecoin.
However, unlike Dogecoin, which remains a meme coin, Shiba has developed into an ecosystem with its decentralized platform for trading and exchanging digital currencies, an NFT marketplace, and other services.
This was made possible thanks to the strong support of the community, which manages the platform and is interested in its further development. It is noteworthy that this project has three utility tokens, unlike others with only one. In addition to SHIB, there are two more tokens, one of which is a governance token used in voting.
Shiba cryptocurrency was launched on the Ethereum platform and has many direct and indirect connections with this chain. Therefore, Shiba Inu's effectiveness largely depends on Ethereum, although developers have already prepared and launched a second-layer chain to increase transaction speed and reduce fees.
Currencies like Shiba heavily depend on external events, especially the opinions and actions of media personalities. Even accidental actions or statements by people like Vitalik Buterin or Elon Musk could noticeably affect SHIB's value.
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