Both Shiba Inu and Dogecoin have garnered a lot of attention in the cryptocurrency space recently. As meme coins, they have captured the interest of many retail investors and speculators. But which one has more long-term potential?
Background on Shiba Inu and Dogecoin
Shiba Inu is a relatively new cryptocurrency that was created in August 2020 by an anonymous developer named Ryoshi. It brands itself as a “Dogecoin killer” and aims to surpass Dogecoin in market capitalization.
Dogecoin, on the other hand, has been around since 2013. It was created by software engineers Billy Markus and Jackson Palmer as a joke, parodying the hype around cryptocurrencies at the time. Despite its humorous origins, Dogecoin has developed an active community and seen its value increase dramatically in 2021.
Comparing Market Performance
Both Shiba Inu and Dogecoin saw massive gains in 2021, far outpacing Bitcoin and many other major cryptocurrencies. This table compares their price performance in 2021:
| Cryptocurrency | Price Jan 1, 2021 | Price Dec 31, 2021 | Gains in 2021 |
|---|---|---|---|
| Shiba Inu | $0.000000000073 | $0.00003493 | 478,055,849% |
| Dogecoin | $0.0049 | $0.17 | 3,364% |
As the table shows, Shiba Inu saw absolutely massive gains, starting the year virtually worthless and ending with a four hundred million percent increase. Dogecoin also saw impressive gains of over 3,000%, but was dwarfed by Shiba Inu’s parabolic rise.
Examining Market Capitalization
In terms of market capitalization, Dogecoin still remains significantly larger than Shiba Inu. As of October 2022, Dogecoin has a market cap of around $8 billion, while Shiba Inu’s market cap is approximately $5.5 billion. Dogecoin ranks #10 among all cryptocurrencies, while Shiba Inu ranks #13.
However, if current trends continue, Shiba Inu could overtake Dogecoin in market cap in the future. Shiba Inu’s market cap has increased much more rapidly than Dogecoin’s since its creation. Here’s how their market caps have changed over time:
| Date | Shiba Inu Market Cap | Dogecoin Market Cap |
|---|---|---|
| October 2020 (Shiba Inu launch) | $0 | $340 million |
| May 2021 | $13 billion | $71 billion |
| October 2022 | $5.5 billion | $8 billion |
This shows that while Dogecoin had the early lead, Shiba Inu rapidly gained ground and briefly surpassed Dogecoin’s market cap in May 2021 at the height of the crypto bubble. Dogecoin still retains the advantage for now, but the gap has narrowed substantially.
Assessing the Communities
The communities behind cryptocurrencies are key to their success and adoption. Both Shiba Inu and Dogecoin have vibrant, enthusiastic communities driving engagement and awareness.
Dogecoin has an extremely active subreddit with over 2.5 million members. Its community has funded charitable initiatives like sponsoring service dogs and NASCAR drivers. The founder of Dogecoin has remarked that the community is its most valuable asset.
The Shiba Inu community refers to themselves as the “Shib Army” and has over 1 million members on Reddit. They helped drive Shiba Inu’s massive growth by spreading awareness on social media. The community also raised over $1 million to donate to the India COVID-19 Relief Fund in May 2021.
By most measures, the Dogecoin community is larger and more established. But the Shiba Inu community has grown rapidly and proven to be very effective at evangelizing the cryptocurrency. This grassroots marketing will likely continue driving Shiba Inu’s growth.
Evaluating Utility and Adoption
Another key factor is the real-world utility and adoption of the cryptocurrencies beyond just speculative trading.
Dogecoin functions like any other mainstream cryptocurrency – it can be used as a digital currency for payments and money transfers. Major companies like AMC Theaters and the Dallas Mavericks NBA team accept Dogecoin as payment. It has reasonable transaction speeds and low fees, making it suitable for regular transactions.
The development team behind Shiba Inu is working to build an “ecosystem” around the token, including an NFT art incubator and planned Decentralized Exchange. However, these products are still in very early stages. Right now, Shiba Inu has virtually no real-world use beyond speculation.
This gives Dogecoin the edge in terms of actual utility and adoption. If Shiba Inu’s development team succeeds in launching functioning products, it could eventually catch up to Dogecoin in utility.
Comparing Inflation Schedules
Inflation is another key differentiator between cryptocurrencies. Dogecoin and Shiba Inu have very different inflation schedules, with Dogecoin’s being much higher.
Dogecoin has a fixed inflation schedule where 10,000 new coins are mined per block. This equates to an inflation rate of around 5 billion coins (5% of current supply) being added per year in perpetuity. This keeps downward pressure on the price over time.
Shiba Inu has a total fixed supply of 1 quadrillion coins, the vast majority of which have already been minted. New Shiba Inu coins are no longer being mined. This means inflation is 0% going forward, which should help the coin retain value.
Shiba Inu’s zero inflation supply schedule gives it a monetary policy advantage over Dogecoin’s perpetual high inflation. Other things being equal, Shiba Inu’s purchasing power should hold up better over time.
Assessing the Risk of Centralization
Cryptocurrency projects aim to be decentralized, but sometimes end up with issues related to centralization of power or token supply.
Dogecoin mining is spread out across many miners, which helps ensure decentralization on the mining side. However, it is estimated that around 30% of the total Dogecoin supply is held by just a handful of wallets. This concentration of supply could potentially be a risk.
Around 41% of the Shiba Inu token supply is held in the top 10 wallets. The biggest wallet holds nearly 41 trillion coins, or around 41% of the total supply. This makes Shiba Inu highly centralized, with power concentrated in a few hands.
Dogecoin’s mining decentralization gives it an edge here. Too much centralization of supply could threaten the stability and governance of a cryptocurrency project over the long-term.
Fundamental Analysis
Looking at the fundamental factors analyzed above:
- Shiba Inu saw much larger gains than Dogecoin in 2021 and is gaining ground on its market cap.
- Dogecoin has a larger and more established community.
- Dogecoin has much greater real-world utility and adoption as an everyday currency.
- Shiba Inu has a better inflation schedule with a fixed supply.
- Dogecoin mining is more decentralized than Shiba Inu’s token distribution.
Overall the projects are quite different – Dogecoin functioning as an established, usable cryptocurrency while Shiba Inu operates more like a speculative asset.
Dogecoin’s Strengths
Dogecoin’s greatest strengths that could lead to long term potential are:
- Its vibrant community that keeps engagement and enthusiasm high.
- The real-world utility of DOGE as a functional cryptocurrency that can be used for payments.
- The decentralization of DOGE mining, avoiding concentration of power.
Shiba Inu’s Strengths
For Shiba Inu, major strengths that could drive future potential include:
- Rapidly growing community and clever marketing tactics.
- Zero inflation schedule that should preserve purchasing power.
- Momentum and mindshare – as a “Dogecoin killer” SHIB has captured investor intrigue.
Conclusion
Overall, Dogecoin seems to have more practical utility and better fundamentals than Shiba Inu. However, cryptocurrency prices are heavily momentum and hype driven, which has favored Shiba Inu recently. Both have merits and downsides.
For investors focused on fundamental value, Dogecoin is likely the better long term bet given its usability, adoption, and decentralized mining. Dogecoin is like a traditional cryptocurrency with enduring utility.
For short term traders, Shiba Inu may have greater potential due to the tremendous buzz and momentum around it. However, fundamentals remain weak. Shiba Inu feels more like a speculative asset than a true cryptocurrency.
Either way, both have demonstrated the ability to produce life-changing returns for early investors. Going forward, they seem poised to continue being power players in the meme coin space, each with their own strengths.
