How Does It Work?

Meme-coins all work almost the same so whenever something becomes successful, others try to copy it and DOGE and SHIB were no exception. In 2020 and 2021 the number of meme coins surged and one of the most interesting ones was, of course, Shiba Inu.

Shiba Inu is the self-proclaimed DOGE killer which was set up by the mysterious founder Ryoshi as we discussed in the previous lesson. At first glance, you could see crypto with a Shiba Inu dog as a mascot and think that it is a copycat of Doge but it’s not that simple. The idea behind SHIB was to create a cryptocurrency that was 100% decentralized in theory and run by the community. It is based on Ethereum, unlike DOGE that is based on BTC. It’s also worth noting how many coins are there. As of June 2021, there were 394,796 billion in circulation but what’s more remarkable is that there are one quadrillion Shiba inu coins.

This means that for the time being, the price of the coin will remain relatively low which is not to say that it will never go up at some point but the sheer size of the supply does depress the price. If you think that this coin can’t reach $1 without causing severe financial disruption, the low price of the coin does mean that there’s a strong potential for growth as long as people keep their expectations reasonable.

Look at it in terms of being able to service a car rather than buying something new and expensive. Indeed, as Ryoshi wrote in the whitepaper “We have the ability to outpace the value of dogecoin exponentially, without ever crossing the $0.01 mark.” The other thing to note about the number of coins is that half of the supply was given to Ethereum creator Vitalik Buterin as according to Ryoshi, there’s no greatness without a vulnerable point and as long as Buterin doesn’t rug them, SHIBA will grow and survive.

Although Buterin didn’t pull the rug, he did burn 90% of the coins which equates to 410 trillion tokens worth $6.7 billion because as he said, he didn’t want to be a locus of power of that kind. Buterin also donated 50 trillion coins worth around $1.2 billion to the India COVID-19 Crypto Relief Fund because he saw it as an opportunity to turn the meme bubble into something useful.