The Shiba Inu cryptocurrency on Ethereum explained
Shiba Inu is a trending memecoin created in 2020 as a sort of delayed response to Dogecoin, the original and much more famous joke cryptocurrency created way back in 2013. Neither DOGE nor SHIB have any particularly useful characteristics, they exist just for the sake of a joke.
They have their own dedicated communities, which support these tokens for no reason other than because it’s unusual and fun. That’s what memecoins are, after all. SHIB is a newer coin that managed to gather value and reach 6 billion USD in market capitalization (the current level).
It’s greater than Bitcoin Cash, DAI, Wrapped Bitcoin, or Stellar. So, why is that? What does it have to offer?
Defining memecoins
Memecoins are mostly just a joke, they don’t have much vision besides that.
The original memecoin, Dogecoin, was created in 2013 specifically to mock the growing popularity of cryptocurrencies and the talk that surrounded them—about the imminent replacement of regular money with decentralized currencies and so forth. It attracted a lot of attention, ironically, because of this stance.
Since it attracted a lot of investors and entered the public spotlight, it eventually became an actual asset traded on crypto exchanges. The developers decided to capitalize on this and supported the growth with jokes, memes, and lighthearted projects. That’s how memecoins came to be in their current form.
There are currently three main memecoins: Dogecoin, Shiba, and Pepe Coin. All three are pretty volatile, trend-dependent, and can be influenced relatively easily because everyone is pretty lax about these coins. There have been times when their value rose overnight by over 100x just because someone made a joke.
SHIB history
SHIB was created in 2020 by a group of anonymous developers that go by ‘Ryoshi’. This project has a few unique startups that utilize SHIB as their driving force, but it’s not what people come here for. It’s a memecoin that was mainly created as a ‘killer of Dogecoin,’ which was basically a way to accumulate initial value by pointing fingers. That’s what memecoins do, and that worked.
The other big step was when Elon Musk made a joke about memecoins in May 2021, driving them up in value. They fell back down soon enough, which is a recurring pattern for these assets. Later in November, this coin grew by 1000% basically because several well-known people talked about it online.
It then fell again and rose again, then fell again. It’s currently on largely the same level as it was before that big 1000% surge, but it keeps growing again.
SHIB characteristics
Shiba was originally launched on Ethereum, which made it essentially Dogecoin’s counterpart for this network because the latter wasn’t on the ETH blockchain at the time. The latter made it to Ethereum in 2021, which made SHIB redundant, although a lot of people still use it.
As such, the main variety of this token is the SHIB ERC20 standard, which makes it a native Ethereum coin that can be used alongside Ethereum in any inner mechanisms in the ETH infrastructure. That includes running smart contracts, paying for services, or using it in decentralized finance (DeFi).
Decentralized finance is an especially important aspect, which is partly why this token was launched there. DeFi includes a lot of basically banking and commerce features, such as loan-giving, money transactions, e-commerce widgets, interest-building, and so forth. You can use SHIB for all of that.
The decision to launch it here was part of the ‘Dogecoin killing’ plan because Ethereum is a superior infrastructure both for developers and users. Despite Bitcoin’s much larger market cap, value, and popularity, Ethereum offers a lot more than just its native currency. SHIB decided to cash in on these advantages.
Use cases for SHIB
Although it is a memecoin without much general direction, you can still use it to achieve a great result. Thanks to its relative popularity and value, it became accepted as a mode of payment on many DeFi and dApp solutions on Ethereum. It was an original Ethereum memecoin, which cemented it in this position even after DOGE ERC20 came along.
So, what can you do with SHIB ERC20? There are several use cases:
- Development. SHIB can be used for development, seeing how it is a native token for Ethereum. It’s not terribly recommended because this token isn’t very stable. Still, you can do it if you have a steady supply of SHIB.
- Buying services. You can purchase services and even buy goods from any online and real store that accepts these coins. There are lots of online stores (like GameStop and Newegg) that do that, but not that many in the physical plane.
- DeFi. Decentralized finance is a way of moving and handling money in a comfortable way while on the blockchain. It was made possible thanks to the introduction of smart contracts, and SHIB can be used to take loans, build interest, etc.
- In dApps. Decentralized apps are basically regular applications built on blockchain. They have their own advantages, and you can receive rewards in SHIB or pay with SHIB while on these apps.
- Trading. As a memecoin, SHIB can always be trusted as a coin that constantly changes its price. That’s all a cryptocurrency needs to be a great target for investments.
The important thing to remember is that SHIB is pretty unstable. It’s a speculative token, meaning that speculating on its market price can give you a lot of money, although it can also lose you a lot of money because of how unpredictable this asset can be. In its history, there were big swings up and down, and you can never know where it will go next.
