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Dogecoin and Shiba Inu – you could be forgiven if you got these dog-themed cryptocurrencies confused. They both cost just a fraction of a dollar and heck, they even sport the same dog mascot, the Japanese breed Shiba Inu. But besides the price and the pooch, what else do two of the top digital currencies have in common?
Here are some of the biggest similarities and differences between Dogecoin and Shiba Inu.
What cryptocurrencies have in common
Cryptocurrencies are built using a digital database called blockchain. Blockchain technology is like a chronological database of every transfer of currency from one person to another. Typically, a huge network of computers produces, tracks and manages the digital currency. So, think of a blockchain like a running receipt that allows the computers to verify every transaction ever made on it.
This receipt is being constantly verified by the network of computers, helping to prevent fraud and ensure that the currency is properly moved and accounted for. More than 10,000 cryptocurrencies exist, and they typically use some form of this basic blockchain technology.
Key differences among Dogecoin and Shiba Inu
Dogecoin and Shiba Inu were created for different purposes, and each comes with its own price and maximum number of coins. Here are some of those key differences.
|Initial purpose||Created as a joke spoof of Bitcoin and the doge meme||Created as a medium of exchange and, along with other related tokens, a self-governing community|
|Approximate market capitalization*||$17 billion||$11 billion|
|Number of coins||132.7 billion||549 trillion|
|Maximum number of coins||Unlimited, but yearly issuance limited to 5 billion coins||1 quadrillion, but over 40 percent have been irrevocably eliminated|
* Estimated value as of early May 2022
Source for market cap and coins: CoinMarketCap.com
Purpose of the cryptocurrency
Incredibly, Dogecoin was created to spoof the silliness of Bitcoin in 2013, mocking the fact that people were paying real money to own digital money of little utility. Ironically, the joke currency came back to bite the founders, rising in price to become one of the largest cryptocurrencies.
Now, the founder of Shiba Inu has said that it sees the currency as a “Dogecoin killer.” Shiba Inu operates on the Ethereum blockchain, and this cryptocurrency has three variants that perform various functions:
- SHIB – This variant is the basic one, acting as a medium of exchange.
- LEASH – This token is more limited with just 107,647 available. It’s used to provide staking rewards for those validating the currency.
- BONE – This variant has 250 million coins. It allows those using Shiba Inu to vote on various proposals regarding how the currency is managed, among other things.
Shiba Inu also runs other features of a community, including Shiba Swap, a decentralized platform for trading coins.
The market capitalization of a coin is the total value of all the coins in existence today. As the number of coins grows, the market cap will grow, too, all else equal. To figure out the market cap of each crypto, multiply the number of coins by their trading price.
Dogecoin has about 132.7 billion coins outstanding, and it’s traded hands recently for a bit more than $0.13 per coin. That gives Dogecoin a market cap of around $17 billion.
Shiba Inu’s market cap is a bit smaller than Dogecoin, but has many more coins in existence. Approximately 549 trillion Shiba Inu coins exist, and they recently priced around $0.00002067 or so. That gives the coin a total value of about $11 billion.
While these are among the most popular cryptocurrencies, they’re still pipsqueaks compared to Bitcoin, whose market cap is over $700 billion.
Both Dogecoin and Shiba Inu trade on major crypto exchanges, including Coinbase, Kraken and Bitfinex.
While Dogecoin has about 133 billion coins in existence now, it continues to issue more each day. Each year it will issue 5 billion more new dogecoins, with no cap on the total number. The unlimited production of the all-digital Dogecoin is part of the spoof, but that hasn’t seemed to keep the market from clamoring for more of them.
The founder of Shiba Inu authorized 1 quadrillion coins but gave about half of them to the founder of Ethereum, Vitalik Buterin. Buterin “burned” – destroyed irrevocably – about 40 percent of the total in existence, while about half of the total are locked into the Uniswap exchange, to guarantee liquidity.
If you’re trading cryptocurrencies, you need to understand what you’re buying, and not all cryptos are the same. Some features may make one cryptocurrency more popular than another, and what was once a popular cryptocurrency may soon become yesterday’s news. In the short term, cryptocurrency is driven most importantly by changes in trader sentiment, so it’s important to understand that emotions could push a cryptocurrency quickly higher or sharply lower at a moment’s notice.
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