Bitcoin has been the most popular and well-known cryptocurrency since it literally began the asset class in 2009. However, as speculative fervor has broken out among many markets over the past few years, literally hundreds of new cryptocurrencies have been created, with many skyrocketing in price. Some of these newer cryptos don’t, as of yet, have any discernible value in the blockchain world, and many have whimsical names, such as Dogecoin, Baby Doge and Shiba Inu. Here’s a look at the story behind these three particular cryptos and whether or not they are worth keeping tabs on as an investor.
Dogecoin was initially created as a joke by two software engineers in December 2013, with a Shiba Inu — a breed of hunting dog in Japan — as its mascot. What began as a joke is now a full-fledged, functioning cryptocurrency. In fact, as of Aug. 9, Dogecoin has the fifth-largest market cap of any cryptocurrency at $31 billion.
Part of the reason that Dogecoin is so well-known is thanks to the tweets of Tesla CEO Elon Musk. Some market participants have even dubbed Musk the “Dogefather” for his support of the crypto. Yet, Musk is not alone in his support for Dogecoin. Billionaire entrepreneur and “Shark Tank” investor Mark Cuban told CNBC’s “Make It” that Dogecoin is the “strongest” cryptocurrency as a medium of exchange, to which Elon Musk immediately agreed, tweeting, “I’ve been saying this for a while.” All of this combined to spike Dogecoin’s price yet again, rising about 10% in 24 hours.
Although investing in any cryptocurrency is a speculation, the former “joke” crypto seems to have staying power. The coin actually exists as a medium of exchange, and it’s got backing from at least two prominent and popular billionaires.
More Economy Explained: Ethereum (ETH): What It Is, What It’s Worth and Should You Be Investing?
Baby Doge is another crypto with a fanciful side, as it was designed by the Dogecoin community as the offspring of its “father,” Doge. The crypto’s own website emphasizes its playfulness, as it states that “Baby Doge seeks to impress his father by showing his new improved transaction speeds & adorableness.”
Unlike other cryptos, however, Baby Doge isn’t meant to be used as a currency. Rather, owners are incentivized to simply hold on to the coin and hope that it increases in value. While Dogecoin, along with many other cryptos, has no cap on the amount that can be mined, Baby Doge is pre-mined, meaning no more can be created. According to the Baby Doge website, this makes the coin hyper-deflationary and designed to become more scarce over time. Baby Doge holders are rewarded with a 5% fee from every transaction on the Baby Doge network, paid in Baby Doge. An additional 5% of each transaction is retained by the network for liquidity.
Although Baby Doge references its transaction speeds as a draw for investors, it’s really focused on increasing its price via a six-pronged roadmap. While the supply of Baby Doge is “limited,” that cap sits at a massive 420 quadrillion tokens, part of the reason its current share price is at an unbelievably low $0.000000001464, as of Aug. 23. The idea is that with a share price so low, early adopters will want to hoard massive numbers of tokens in the hopes of an eventual payoff.
Shiba Inu was originally created as the mascot for Dogecoin, but now it operates as its own token on the Ethereum blockchain. Unlike some cryptos which limit their supply, Shiba Inu acts more like Baby Doge, with a nearly unfathomable circulation of 1 quadrillion coins. Shiba Inu has a similarly low price, at just $0.0000082 as of Aug. 23. One major difference between Baby Doge and Shiba Inu, however, is that Shiba Inu strives to be an Ethereum-based alternative to Dogecoin by supporting an NFT art incubator and other projects on its decentralized exchange known as Shibaswap.
As Shiba Inu serves a workable function and is based on popular and well-known Ethereum, some investors believe that it might have more legs than Baby Doge. However, Shiba Inu is still extremely speculative, and like many altcoins trying to find their place in the crypto universe, a single tweet can create massive price movements up or down. Not surprisingly, Elon Musk is one of the main culprits with Shiba Inu as well; a single tweet from Musk stating, “My Shiba Inu will be named Floki,” was enough to push the Shiba Inu price up 25%. Investors would be wise to tread with caution on this one.
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Last updated: Aug. 24, 2021
This article originally appeared on GOBankingRates.com: Comparing Dogecoin, Baby Doge and Shiba Inu: Is There One To Watch?