Memecoins
Best Coin: Shiba Inu vs. Dogecoin
Dogecoin (DOGE -0.37%) and Shiba Inu (SHIB 0.82%) were both initially created as parodies of other coins. Dogecoin was launched as a parody of Bitcoin (BTC 0.29%) in 2013, and Shiba Inu was created to mock Dogecoin in 2020.
Dogecoin and Shiba Inu have both been nicknamed “Meme parts” because they were both named after the popular “Doge” meme that featured a Shiba Inu dog. Many investors initially dismissed them as jokes, but they both generated massive gains.
Image source: Getty Images.
A $100 investment in Dogecoin at its starting price of around $0.0004 would be worth around $995,000 today, while the same investment in Shiba Inu at its starting price of $0.000000000056 would have reached the sum whopping $46.43 million. Let’s see why Shiba Inu outperformed Dogecoin by such a wide margin – and if it can stay ahead of its biggest rival this year.
The differences between Dogecoin and Shiba Inu
Even though they share the same mascot, Dogecoin and Shiba Inu operate on different technologies. Dogecoin was created from open source code for Litecoinan altcoin 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 an ultimate limit of 21 million tokens, Dogecoin has no supply limit.
Dogecoin’s hashing algorithm, Scrypt, also consumes less energy than Bitcoin and allows for faster and cheaper transactions. These advantages have made it a popular token for making small but frequent payments.
Shiba Inu was built on the Ethereum (ETH 0.08%) blockchain, which has transitioned from the energy-intensive PoW method to the more energy-efficient Proof-of-Stake (PoS) in 2022. The new system generates transactions much faster and cheaper than the old one, and it supports smart contracts to create decentralized applications (Decentralized applications) 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 launch, and over 40% of those tokens have already been mined. been burned (removed from circulation). Unlike Dogecoin, Shiba Inu must be “staked” (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 decentralized cross-chain exchange (DEX) that acts as an official cryptocurrency wallet for its own tokens.
Simply put, Dogecoin is still considered an asset on par with 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 drive 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 are expected to attract more investors to 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 MayIf these approvals generate demand for other smaller altcoins to get 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 of new futures contracts Coinbase (PIECE OF MONEY -0.79%) in March could lead to an increase in trading activity for the token. There has also been persistent buzz 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 has more obvious strengths. It could attract more developers into its ecosystem, and its investors will continue to burn their tokens to reduce their available supply. But in the future, Shiba Inu will still face intense competition from larger PoS-based blockchains like Ethereum, Solana And Gimbal.
Best meme currency: Shiba Inu
Both Dogecoin and Shiba Inu will 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 irons in the fire.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Bitcoin, Cardano, Coinbase Global, Ethereum, and Solana. The Motley Fool has a disclosure policy.