Shiba Inu (SHIB -6.33%) is a decentralized cryptocurrency and is one of numerous cryptocurrencies that are often categorized as meme coins. These coins are generally inspired by internet trends like widely shared memes. Like many other cryptocurrencies, its value is primarily driven by community engagement and market trends.
Overview
What is Shiba Inu in cryptocurrency?
Shiba Inu was created in August 2020 by Ryoshi, an anonymous individual or group. The Shiba Inu is an altcoin of Dogecoin (DOGE -6.22%). Its design features a Japanese hunting dog, the Shiba Inu.
The coin was designed as a humorous alternative to Dogecoin, with a large initial supply of tokens and a strong community focus. Shiba Inu was created as an experiment in decentralized community building. The project started with a total supply of 1 quadrillion tokens.
The Shiba Inu gained popularity through its association with the adorable dog breed, as well as tweets and headlines from well-known individuals like Elon Musk and Vitalik Buterin. It quickly became a worldwide phenomenon and is now accepted as a form of payment at hundreds of locations.
In 2021, Ryoshi sent 500 trillion tokens, half of the total Shiba Inu supply, to Buterin, the Ethereum (ETH -4.82%) co-founder. Buterin famously burned (removed from circulation) about 90% of his tokens and donated 10% to a COVID-19 pandemic relief fund.
The price of Shiba Inu peaked in October 2021 when it was added to Coinbase (COIN 9.17%). Shiba Inu has decreased considerably since then, along with many other cryptocurrencies.
How it works
How does Shiba Inu work?
Shiba Inu is based on the Ethereum blockchain. It is an ERC-20 token that operates on the Ethereum blockchain and follows the ERC-20 token standard. ERC-20 stands for Ethereum Request for Comment 20. ERC-20 tokens are a type of cryptocurrency that is created and issued on the Ethereum blockchain.
This means investors can interact with Shiba Inu using an Ethereum wallet and trade it on Ethereum-based exchanges. ERC-20 tokens like Shiba Inu are smart contract-enabled assets that can be sent and received on the Ethereum blockchain. These characteristics can simplify token interactions, making it easier to exchange and incorporate tokens.
The broader Shiba Inu Token ecosystem supports numerous projects. These include a non-fungible token (NFT) art incubator and ShibaSwap, a decentralized exchange that lets users trade ERC-20 tokens, including the Shiba Inu token.
The exchange is built on the Ethereum and Fantom (FTM 7.32%) networks. The ShibaSwap exchange allows users to swap Shiba Inu for other tokens, stake Shiba Inu, and provide liquidity. The Shiba Inu ecosystem also includes the Doge Killer (CRYPTO:LEASH) and Bone ShibaSwap (CRYPTO:BONE) tokens.
How it's used
How is Shiba Inu used?
Shiba Inu can be used for payments between users or as a payment method at businesses that accept the token. The cryptocurrency can be used for payments, trading, and more. It's also used to create and trade NFTs and participate in the metaverse.
Holders of Shiba Inu can use tokens to pay on platforms that accept it, such as some retailers and other businesses. It's also possible to use the decentralized exchange ShibaSwap to trade or swap tokens within the Shiba Inu ecosystem.
Companies that accept Shiba Inu generally use a special cryptocurrency payment gateway that supports the token or offers other integrations with cryptocurrency payment solutions. However, Shiba Inu has not been widely adopted as a cryptocurrency.
It's less widely used than other cryptocurrencies like Ethereum, mostly due to its limited utility. Shiba Inu has few real-world applications and doesn't necessarily offer clear advantages over other cryptocurrencies.
Related investing topics
How to invest
Investing in Shiba Inu
You can buy Shiba Inu with fiat currency on most popular cryptocurrency exchanges like Coinbase, Binance (BNB -2.23%), and Gemini. The token is also supported by many crypto wallets, or you can use a decentralized exchange to trade it for other currencies.
Bear in mind that investing in Shiba Inu is inherently very risky. The meme coin's value is driven primarily by social media trends and speculation, and use cases for Shiba Inu in the real world are still minimal at best.
The other issue is that Shiba Inu has a serious oversupply problem. It has more than 589 trillion tokens in circulation (remember, Shiba Inu was created with a total supply of 1 quadrillion tokens). The Shiba Inu investor community and developers have diligently worked to burn tokens, removing them from circulation permanently.
It remains unlikely that enough tokens will be burned to significantly move the price. This would require that hundreds of billions of tokens be erased from the supply, a feat that would still not even suffice to move the token's price to a penny. Instead, investing in cryptocurrencies with high market capitalization, wide adoption, and strong fundamentals, like Ethereum or Bitcoin (BTC -0.91%), can offer investors the opportunity for more stable returns over the long run.
