What is the Shiba Inu? | Hokk Finance

The Shiba Inu (SHIBUSD) is an Ethereum-based altcoin (a cryptocurrency other than Bitcoin) that has the Shiba Inu, a Japanese breed of hunting dog, as its mascot. Shiba Inu is widely considered an alternative to Dogecoin; in fact, Shiba Inu supporters refer to him as the “Dogecoin killer”

Shiba Inu and Dogecoin are meme currencies, i.e. cryptocurrencies associated with a theme, like the Shiba Inu dog in the case of Shiba Inu and Dogecoin, but which are often launched as a parody or joke internal rather than as a digital product with real utility. While Dogecoin was launched in December 2013, Shiba Inu was created in August 2020 by an anonymous individual or group called “Ryoshi”

Key Understandings

Shiba Inu’s price increased more than tenfold in October 2021, giving it a market capitalization of $35 billion (as of October 31, 2021) and ranking it 10th among all cryptocurrencies by this metric. A tweet from Tesla founder Elon Musk on October 4, 2021, featuring a photo of his new Shiba Inu puppy, Floki, provided the initial impetus for the meme coin’s price surge. As one of Dogecoin’s most prominent proponents and self-proclaimed “Dogefather,” Musk’s “cryptic” tweets often lead to increased volatility in the cryptocurrency space.

The October 2021 Shiba Inu price surge nearly caught Dogecoin’s $36.9 billion market cap (as of October 31, 2021), after briefly surpassing it at one point. It remains to be seen whether Shiba Inu will indeed become the “Dogecoin killer” that his growing community of followers – known as the ShibArmy – has been waiting for. But at least in October 2021, the stunning price gains of this previously obscure altcoin made Shiba Inu the tail-wagging the Dog (ecoin).

Understanding the Shiba Inu

The guiding principles of the Shiba Inu ecosystem are laid out in a “Woof Paper” (probably a pun on “white paper”), available on the ShibaToken website.

According to this document, Shiba Inu was developed to answer a simple question: “What if a cryptocurrency project was 100% community-driven?” Its founder Ryoshi attributes its origins to an “experiment in spontaneous, decentralized community building.” According to Ryoshi, the power of collective decentralization can build something stronger than what a centralized team could ever create.

The base of ShibArmy, which has more than 500,000 members, adheres to its founding principles, which are as follows:

As Shiba Inu is an Ethereum-based ERC-20 token, it is created on and hosted by the Ethereum blockchain, instead of its own blockchain. Ryoshi states in the document that he chose to build the Shiba Inu ecosystem on Ethereum because it was already secure and well-established, and it allowed the project to remain decentralized.

The Shiba Inu Ecosystem

The Shiba Inu ecosystem consists of the following three tokens:

Shiba Inu Tokens

The Shiba Inu ecosystem consists of three tokens: Shiba Inu (SHIB), Leash (LEASH), and Bone (BONE)

The Shiba Inu ecosystem also includes:

Canine terms

Keeping with the dog theme, the aforementioned Shiba Inu Woof Paper uses canine terms to describe how returns can be generated from Shiba Inu tokens. On ShibaSwap, these tokens can be used to “Dig” (provide liquidity), “Bury” (stake tokens) and even “Fetch” (exchange one token for another). The tokens used in these strategies generate “Woof” returns in the form of Bone tokens that are distributed to token pools known as “Puppy Pools,” according to the Woof Paper.

For cryptocurrency enthusiasts, part of the appeal of meme currencies is that they reject conventional protocols, and this unconventional approach can extend to using canine terms to describe kickback strategies. This unconventional approach can extend to the use of canine terms to describe return strategies. But they certainly seem to be a world apart from static investment terms like ROI and liquidity.

Shiba Inu Investment Considerations

Investing in cryptocurrencies is risky enough due to their massive volatility and lack of regulation. Investing in the altcoin/meme coin space presents an additional challenge due to a lack of differentiation and the fact that most of their value is based on the frenzied trading of their fanatical followers. Here are some investment considerations for a potential Shiba Inu investor.

A low price: Even after its recent gains, Shiba Inu (SHIB) only costs a fraction of a cent, so one can buy millions of SHIB tokens with a few hundred dollars. At its recent price of $0.00006485 (as of October 31, 2021), $100 will get you over 1.5 million SHIB tokens.

Limited Utility and Use Cases: While its proponents may point out that Shiba Inu-based NFTs are now available and its Ethereum base may enable smart-contracting capabilities in the future, Shiba Inu currently has very limited utility and does not yet have a compelling use case.

Skyrocketing price: Shiba Inu’s market capitalization of $35 billion is larger than many S&P 500 companies that have been around for decades and whose sales and profits have grown during the most of this period. In fact, the combined $79 billion value of Shiba Inu and Dogecoin (as of October 28, 2021) exceeds the market capitalization of 388 S&P 500 companies. On August 1, 2020, SHIB was trading at $0.00000000051, so at its current price of $0.00006485 (as of October 31, 2021), it has won an astronomical sum of 12,715,586%! This means that $1 invested in SHIB on August 1, 2020 would have been worth $127,156 on October 31, 2021.

This stunning performance also means that Shiba Inu has achieved the goal of its founder, Ryoshi, to create something from nothing. However, these gains are likely due to the speculative frenzy fueled by social media as crypto enthusiasts search for the next big deal. If the bubble bursts, retail investors who entered the bubble at the highest level risk being left behind.

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Shiba Inu Investor Makes Legendary Swap

Some operations of recent decades have become legendary, such as George Soros’ bet against the pound sterling in 1991 or the short sale of subprime mortgages by John Paulson in 2007-2009. In terms of win percentage, an alleged Shiba Inu trade by an unknown trader overshadows these legendary trades. This trader reportedly bought around 70 trillion SHIB tokens for around $8,000 in August 2020. This stake currently represents around 13% of the total circulation of 550 trillion SHIB and is now worth $4.5 billion. In percentage terms, this represents a return of 5.6 million percent.