Dogecoin vs. Shiba Inu Token

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Contributor, Benzinga
November 6, 2021
verified by Logan Ross

Decided you want in on the action? You can get DOGE and Shiba Inu on eToro.

Ever since Elon Musk tweeted about Dogecoin going to the moon, dog-themed cryptocurrencies have exploded in value. Most of these cryptocurrencies don’t have innovative or unique underlying products, and Dogecoin has no competitive advantages over other more established cryptocurrencies like Bitcoin, Ethereum and Cardano

But before dumping your life savings into a meme currency, be sure to know what you’re buying. Learn more about the difference between Dogecoin and Shiba Inu tokens now.

Dogecoin’s Technology

Dogecoin is essentially the same technology as Bitcoin. Both Dogecoin and Bitcoin use proof of work consensus to verify transactions on the network. However, Dogecoin is arguably a better option for every day payments, as its transactions can be processed faster and cheaper than Bitcoin transactions.

But Dogecoin isn’t an exact clone of Bitcoin. Dogecoin has a much higher circulating supply than Bitcoin, and there’s no maximum supply for the doggy-themed cryptocurrency. With over 129 billion DOGE in circulation, the supply is far more abundant than Bitcoin’s 21 million maximum supply.  What's more, 10,000 Dogecoin are minted every minute in the form of block rewards.

Dogecoin is a proof-of-work cryptocurrency, so it uses computing power to secure its blockchain in a similar way to Bitcoin. DOGE is merge-mined with Litecoin, meaning that anyone who mines Litecoin or Dogecoin can choose to mine the other currency. This allows for it’s network power to be more stable than being mined alone.

Shiba Inu’s Technology

Shiba Inu is a token on Ethereum’s network. Fungible tokens like Shiba Inu are ERC-20 tokens, while non-fungible tokens (NFTs) use the ERC-721 token standard. Because the token is powered by Ethereum, Shiba Inu can leverage smart contracts to make decentralized financial products. 

The DeFi industry has gained traction this year with tokens like Uniswap, and Aave skyrocketing in both price and adoption. These cryptocurrencies use smart contracts on Ethereum’s blockchain to create decentralized exchanges (DEXs), lending protocols and even interest-bearing accounts.

Shiba Inu has also entered the NFT space with Shiboshis, a collection of 10,000 NFTs themed after its Shiba Inu mascot. The decentralized program uses Ethereum’s network to let artists auction off NFTs, replacing the 3rd party needed for transactions with smart contracts.

ShibaSwap lets investors stake their Shiba Inu tokens for high returns in a variety of ways. However, this will cause inflation for the token which may cause the price to go down. The platform doesn't have clear benefits over competitors in the space.

The Tokenomics of Dogecoin & Shiba Inu

Both Shiba Inu and Dogecoin have a far more abundant supply of tokens than other mainstream cryptocurrencies. Intuitively, this means that the tokens will have a lower price per coin. While Dogecoin is hovering around $0.30, its market capitalization exceeds $25 billion, making the coin more valuable than many public companies, such as Ford Motor Company. 

Dogecoin rewards its miners with 10,000 Dogecoin every minute. This constantly increases the total supply of Dogecoin, which creates sell pressure for the currency. Shiba Inu has a maximum supply of 1 quadrillion tokens, which is far more than Dogecoin’s current supply. However, many of these tokens were burned, and half of the supply was sent to Ethereum founder Vitalik Buterin as “tribute”. Buterin has since donated these tokens to India's Covid relief fund.

Shiba Inu’s platform will allow investors to earn Bone tokens through staking their tokens, essentially letting those who stake Shiba Inu earn interest on their investment. 

Where to Buy Dogecoin

Since Dogecoin is such a volatile and speculative asset, most exchanges haven’t listed the asset to the public. The 2 best exchanges that support DOGE are Binance and Robinhood

These exchanges allow you to buy Dogecoin as a limit or market order: market orders will buy DOGE instantly at market price. Limit orders only execute at a pre-specified price.

Where to Buy Shiba Inu

Since Shiba Inu uses Ethereum’s network, you can use a decentralized exchange (DEX) to purchase Shiba Inu tokens. The most popular DEX on Ethereum is Uniswap. 

To use Uniswap, you’ll need to download an Ethereum wallet. The best Ethereum wallet to use with Uniswap is Metamask, as it features a Google Chrome extension that makes it easy to interact with decentralized protocols.

Once you’ve downloaded Metamask, you’ll need to send Ethereum to your wallet from your cryptocurrency exchange of choice. If you don’t already have an account with a cryptocurrency brokerage, then Coinbase, eToro and Gemini are great options for beginners.

Uniswap plans to launch Optimism, a scaling solution for Ethereum, on its platform later this month. This will make transacting on Uniswap’s DEX much more affordable to retail investors, so make sure to follow Uniswap’s Twitter for updates.

Since Shiba Inu has received so much attention, many centralized exchanges have listed the token to trade on their platforms. Of these exchanges, Coinbase and eToro are the most reputable and secure places to buy Shiba Inu.

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How to Store your Cryptocurrency Safely

It’s not recommended for any cryptocurrency investor to store their funds on an exchange. Exchange’s hold custody of all their users' crypto assets, making them large targets for online hackers. Several crypto exchanges have been hacked in the past, leaving investors coinless. 

To mitigate the risk of being hacked, you should store your crypto in a software or hardware cryptocurrency wallet. Software wallets are free to use, and they encrypto your crypto assets in a computer program. Hardware wallets are the safest way to store cryptocurrency, as they store your crypto on a physical device, offline. This makes it impossible for anyone to access your cryptocurrencies through the internet.

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Best Hardware Wallet: Ledger Nano S

Ledger has been around longer than almost any other cryptocurrency hardware wallet company. The wallet is a multicurrency wallet, meaning you can store almost any cryptocurrency asset on the device. Since Shiba Inu is an ERC-20 token, any crypto wallet that supports Ethereum should also support Shiba, including Ledger.

So, Dogecoin or Shiba Inu?

Both Dogecoin and Shiba Inu are highly speculative investments, and both cryptocurrencies have market capitalizations well above a billion dollars. While making a quick buck on these doggy-themed cryptos may be enticing, you’re taking on an immense amount of risk. 

If you’re less risk tolerant but are still looking for high returns, then you should consider tokens that already have thriving products available to the masses. Some of these established tokens include Ethereum, Uniswap and Aave.

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