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Best Meme Coin: Shiba Inu vs.
Dogecoin (CRYPTO: DOGE) and Shiba Inu (CRYPTO: SHIB) were both initially created as parodies of other coins. Dogecoin was launched as a parody of Bitcoin (CRYPTOCURRENCY: BTC) in 2013, and Shiba Inu was created to mock Dogecoin in 2020.
Dogecoin and Shiba Inu have both been nicknamed “meme coins“because they were both named after the popular “Doge” meme, which featured a Shiba Inu dog. Many investors initially dismissed them as jokes, but both generated massive gains.
Image source: Getty Images.
A $100 investment in Dogecoin at its initial price of around $0.0004 would be worth around $995,000 today, while the same investment in Shiba Inu at its initial price of $0.000000000056 would have grown to a whopping $46.43 million. Let’s take a look at why Shiba Inu has outperformed Dogecoin by such a wide margin — and whether it can stay ahead of its biggest rival this year.
The Differences Between Dogecoin and Shiba Inu
Although they share the same mascot, Dogecoin and Shiba Inu operate on different technologies. Dogecoin was created from open source code to Litecoinan altcoin that was forked from the Bitcoin blockchain in 2011.
These origins make Dogecoin a proof-of-work (PoW) token, which needs to be mined like Bitcoin. But unlike Bitcoin, which has a hard cap of 21 million tokens, Dogecoin has no supply limit.
Dogecoin’s hashing algorithm, Scrypt, also consumes less energy than Bitcoin and facilitates faster, cheaper transactions. These advantages have made it a popular token for making small but frequent payments.
Shiba Inu was built in the Ethereum (CRYPTO: ETH), which transitioned from the energy-intensive PoW method to the more energy-intensive proof-of-stake (PoS) method in 2022. The new system generates much faster and cheaper transactions than the former, and supports smart contracts for creating decentralized applications (dApps) and other crypto assets.
Shiba Inu cannot be actively mined. Its entire supply of nearly a quadrillion tokens was pre-mined on the Ethereum blockchain before its launch, and more than 40% of these tokens have already been burned (removed from circulation). Unlike Dogecoin, Shiba Inu must be “staken” (locked) on the blockchain for periods of time to earn more rewards.
Shiba Inu’s creators recently launched Shibarium, a Layer-2 blockchain network that supports faster transactions and lower fees, to attract even more developers to their ecosystem. Their blockchain also hosts ShibaDEX, a cross-chain decentralized exchange (DEX) that acts as an official cryptocurrency wallet for their own tokens.
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Simply put, Dogecoin is still valued as an asset like Bitcoin, while Shiba Inu is valued for the growth of its developer ecosystem. However, both meme coins are still largely controlled by “whales” — very large accounts that can easily move their volatile prices.
Which meme coin has the most catalysts?
Dogecoin and Shiba Inu are fundamentally different, but two catalysts could drive both tokens higher this year. First, lower interest rates will likely prompt more investors to return to cryptocurrencies and other speculative investments.
Second, the US Securities and Exchange Commission (SEC) approved the first spot-priced Bitcoin ETFs in January and paved the way for the first spot-priced Ether ETFs in May. If these approvals generate demand for other smaller altcoins getting their own exchange-traded funds, Dogecoin and Shiba Inu could start to attract a lot more attention from larger investors.
On its own, Dogecoin has fewer catalysts. Approvals for new futures contracts in Coinbase (NASDAQ: COIN) in March could spark more trading activity for the token. There have also been persistent rumors about Dogecoin transitioning to the PoS protocol to support the development of decentralized applications, but such a move would require a lot of time and resources.
Shiba Inu have clearer strengths. It could attract more developers to its ecosystem, and its investors will continue to burn their tokens to reduce its available supply. But looking ahead, Shiba Inu still faces intense competition from larger PoS-based blockchains like Ethereum, Solana It is Cardano.
Best meme coin: Shiba Inu
Dogecoin and Shiba Inu will remain speculative and volatile investments this year. If I had to choose one over the other, I would go with Shiba Inu because it is cheaper than Dogecoin but has significantly more irons in the fire.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool is positioned in and recommends Bitcoin, Cardano, Coinbase Global, Ethereum, and Solana. The Motley Fool has a disclosure policy.
Best Meme Coin: Shiba Inu vs. was originally published by The Motley Fool