Memecoins
Best Meme Coin: Shiba Inu vs. Dogecoin
Dogemoneta (CRYPTO: DOGE) and Shiba Inu (CRYPTO: SHIB) were both initially created as parodies of other coins. Dogecoin was launched as a parody of Bitcoin (CRYPTO: BTC) in 2013, and Shiba Inu was created to mock Dogecoin in 2020.
Dogecoin and Shiba Inu were both nicknamed “meme coins” because they were both named after the famous “Doge” meme featuring a Shiba Inu dog. Many investors initially dismissed them as jokes, but both generated huge profits.
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 see why Shiba Inu surpassed Dogecoin by such a large margin and whether it will manage to stay ahead of its bigger rival this year.
The differences between Dogecoin and Shiba Inu
Even though they share the same mascot, Dogecoin and Shiba Inu run on different technologies. Dogecoin was created from open source code for Litecoinan altcoin derived from the Bitcoin blockchain in 2011.
These origins make Dogecoin a Proof of Work (PoW) token, which must be mined like Bitcoin. But unlike Bitcoin, which has a maximum limit of 21 million tokens, Dogecoin does not have a 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.
The Shiba Inu was built on Ethereal (CRYPTO: ETH), which transitioned from the energy-intensive PoW method to the more energy-efficient Proof of Stake (PoS) method in 2022. The new system enables much faster and cheaper transactions than the old one and supports smart technology contracts for the creation of decentralized apps (dApps) and other crypto assets.
Shiba Inu cannot be actively drawn. The entire supply of nearly a quadrillion tokens was pre-mined on the Ethereum blockchain before its launch, and more than 40% of those tokens have already been burned (taken out of circulation). Unlike Dogecoin, Shiba Inu must be “stake” (locked) on the blockchain for periods of time to earn more rewards.
The creators of Shiba Inu recently launched Shibarium, a Layer-2 blockchain network that supports faster transactions and lower fees, to attract even more developers to its ecosystem. Its blockchain also hosts ShibaDEX, a cross-chain decentralized exchange (DEX) that serves as the official cryptocurrency wallet for its tokens.
The story continues
Simply put, Dogecoin is still valued as an asset like Bitcoin, while Shiba Inu is valued by the growth of its developer ecosystem. However, both of these 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 push both tokens higher this year. First, lower interest rates will likely push more investors back into cryptocurrencies and other speculative investments.
Second, the U.S. 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 much more attention from larger investors.
Dogecoin itself has fewer catalysts. Approvals for new futures contracts onwards Coinbase (NASDAQ: COIN) could see more trading activity for the token in March. There has also been persistent talk about Dogecoin moving to the PoS protocol to support decentralized app development, but such a move would require a lot of time and resources.
Shiba Inu has clearer strengths. It may attract more developers to its ecosystem and its investors will continue to burn their tokens to reduce the available supply. But looking ahead, Shiba Inu still faces stiff competition from larger PoS-based blockchains like Ethereum. Solana AND Cardano.
Best Meme Coin: Shiba Inu
Dogecoin and Shiba Inu will both remain speculative and volatile investments this year. If I had to choose one over the other, I would stick with Shiba Inu because it is cheaper than Dogecoin but has a lot more to it.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin, Cardano, Coinbase Global, Ethereum and Solana. The Motley Fool has a disclosure policy.
Best Meme Coin: Shiba Inu vs Dogecoin was originally published by The Motley Fool