What Is Shiba Inu (SHIB) and What Is It Used For?

A coin born as a joke now sits among the biggest names in crypto. That is the short story of Shiba Inu. SHIB is a meme coin that runs on Ethereum, used for payments, trading, and apps in its own little world, with a loud fan base that calls itself the ShibArmy.

Key points:

SHIB showed up in August 2020 as a joke coin on Ethereum, made by a person nobody knows, who went by the name Ryoshi.
Half of all SHIB went to Ethereum co-founder Vitalik Buterin, who burned most of it and gave a huge chunk to charity.
These days you can trade SHIB, pay with it in some places, and use it in ShibaSwap and Shibarium, but it is still a high-risk meme coin at heart.

Why did a stranger on the internet make a dog coin?

In August 2020, a person using the made-up name Ryoshi put out SHIB on Ethereum. A meme coin is just a coin built around an internet joke, and this one borrowed the Shiba Inu dog face that Dogecoin had already made famous. Ryoshi called it a test: could a coin with no boss, no office, and no sales pitch grow on its own, just because people liked it and talked about it?

The start was odd on purpose. Ryoshi made one quadrillion SHIB, a one followed by fifteen zeros. Half went into a trading pool on Uniswap, a place where people swap coins with no company in the middle, and the keys to that pool were thrown away. The other half went to Vitalik Buterin, who helped build Ethereum. Ryoshi had not asked him first. The idea was blunt: if a famous outsider held half the coins, no insider could quietly dump them on everyone else.

For months, almost nobody cared. SHIB traded at prices with so many zeros after the dot that they looked like a typo. Then, in early 2021, Dogecoin took off, crowds went hunting for the next dog coin, and SHIB caught fire.

What happened to half of all SHIB?

In May 2021, Buterin did two things that still shape SHIB today. First, he gave 50 trillion SHIB to a Covid relief fund in India. Then he burned 410.24 trillion SHIB, worth about $6.74 billion at the time. To burn coins means to send them to a wallet address that nobody controls, so they can never be spent again. Gone for good.

That one burn wiped out more than 40 percent of all SHIB that ever existed. It also killed a worry people kept raising: what if the man holding half the supply sold it all? After the burn, most of those coins no longer existed at all.

Ryoshi, meanwhile, slowly vanished. His last post came in May 2021, and in May 2022 he deleted his old posts and walked away. No name, no face, no farewell tour. The coin was left with its fans and a small team of volunteer builders, and that is how it still runs.

What can you actually do with SHIB today?

First, the plain answer: you can buy and sell it. SHIB trades on most big exchanges, so getting in and out is easy. That is also why its price moves so fast. When meme coins trend, crowds pile in. When the mood flips, they pile out just as fast.

Second, you can pay with it in some places. A few shops and payment apps take SHIB, though it is nowhere near as common as Bitcoin or a stablecoin. Think of it as a fun way to spend, not a coin most shops expect.

Third, you can use it inside its own apps. ShibaSwap, which went live in July 2021, is the project's own exchange, where people swap coins and earn rewards for lending coins to the pool. SHIB is the main coin there, but not the only one. LEASH is a second coin with a tiny supply, meant as a reward for loyal fans. BONE is a third coin, and holding it gives you a vote on changes.

Then there is Shibarium, which went live in August 2023. Shibarium is a Layer 2 chain, which just means a second layer built on top of Ethereum that makes trades cheaper and quicker. Ethereum can get slow and pricey when it is busy, which hurt a coin with millions of small holders. Shibarium gives its apps their own road to run on, and it has since handled well over a billion transactions.

How is SHIB different from Dogecoin?

People mix these two up all the time, and the dog face does not help. Here is the clean split. Dogecoin has its own chain and runs on mining, a bit like Bitcoin. SHIB has no chain of its own. It is a token, which means it follows Ethereum's standard rules and lives on Ethereum, with Shibarium as its side road.

Their stories differ too. Dogecoin started in 2013 as a light joke between two friends. SHIB started in 2020 as a test of whether a crowd with no leader could run a coin. Dogecoin feels friendly and spendable. SHIB has a bigger machine around it: three coins, an exchange, a chain, and plans for games and a metaverse world.

My own read is simple: SHIB is a great story to learn from, and a risky coin to hold. I would not put money I need into a coin whose first job was to be a joke. Fun and safe are two very different things in crypto.

What could go wrong with SHIB?

Start with the price. SHIB hit about $0.000088 in late October 2021, when its total value topped $37 billion. It has since fallen roughly 95 percent from that peak. One early wallet turned about $8,000 into a paper value of $5.7 billion at the top, but paper value is not cash in hand.

Then there is the cheap-coin trap. SHIB looks cheap because one coin costs a tiny fraction of a cent. That means nothing on its own. With hundreds of trillions of coins still out there, the price per coin stays tiny even when the project is worth billions. Judge it by total value, not by how cheap one coin looks.

Scams are the third danger, and they are everywhere around meme coins. Fake SHIB giveaways, fake support accounts, and messages asking for your seed phrase all target new fans. Real projects never ask for that phrase, and a SHIB payment, once sent, generally cannot be undone. If someone promises to double your SHIB, they are lying.

What should you watch next? Keep an eye on Shibarium first. If more people actually use its apps, SHIB has a real base under the joke. If use stays flat, it stays a mood coin, rising and falling on hype alone. And watch whether the long-promised SHI stablecoin ever ships, since that would show the team is building for everyday use, not just the next price spike.

— BitByLine News Desk

This post is just for learning. BitByLine only explains things here, and this is not financial advice, and we never tell you to buy or sell any coin. If you ever buy anything, that call is yours alone, and so is the risk, so please do your own research first.

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Sources: BSC News, Binance