Shiba Inu may have started as a joke, what the blockchain community calls ‘meme tokens,’ but it’s gained in value over the last year. In fact, it’s amongst the twenty largest cryptocurrencies by market cap.
However, in the midst of the ongoing conversion about how blockchain projects affect the environment, how does SHIB compare? Is it eco-friendly? Read on to discover these and many more facts about the claimed “Dogecoin killer.”
Is Shiba eco-friendly?
Sadly, Shiba Inu isn’t an eco-friendly token. The ERC-20 token is based on Ethereum, which at the moment uses a similar consensus mechanism as Bitcoin called Proof of Work (PoW) mining.
In PoW, transaction validators are incentivized to invest in more machines to contribute a greater hash rate and increase their chances of solving the network’s arbitrary math puzzles. The miner that creates a new block is rewarded with newly minted Ether coins.
PoW has been harshly criticized for its wasteful nature as the competition to solve the arbitrary math puzzles leads to the ever-increasing use of energy.
As the value of the digital asset rises, more miners come in while existing ones invest in more expensive and efficient machines.
Mining is an unsustainable process that wastes energy and degrades the environment. The problem is also compounded if the energy is obtained from non-renewable sources such as coal.
Shiba Inu, being one of the several blockchain projects hosted on the Ethereum network, inherits Ethereum’s drawbacks, including the mining deficiencies.
On a positive note, though, Ethereum core developers are currently working on upgrading the Ethereum network to staking.
If and when Ethereum makes this transition, it’ll consume about 99.9% less energy than it currently does.
If this happens, Shiba Inu token can be more eco-friendly.
Also read: Is BNB eco-friendly?
What is Shiba used for?
Shiba Inu’s original purpose was to replace Dogecoin as the King (or Queen) of meme tokens. It was created to amuse the blockchain community similar to DOGE.
However, over the past months, the coin community has opted to drive the token in a different direction and give it another reason for existence.
The Shiba Inu token has morphed into a vibrant ecosystem comprising of:
- Three ERC-20 tokens Shiba Inu Coin, LEASH, and BONE;
- ShibaSwap, a decentralized finance (DeFi) platform;
- Shiba Inu Incubator, an NFT creation space; and
- Shiba Inu Rescue Association.
Owning SHIB tokens lets you participate in any of the four ways listed above, and you become a member of the ShibArmy, a nickname for holders of SHIB coins.
You can use your coins to provide liquidity on ShibaSwap for a reward, or you can vote on proposals on the DoggyDAO.
The rescue association is an effort to support dog shelters that rear the Shiba Inu bread across the globe.
If you wish to help, you can donate SHIB tokens or shop on Amazon through the Amazon Smile campaign and select the Shiba Inu Rescue Association as your preferred beneficiary.
Also read: Is XLM Eco-Friendly?
What is the impact of Shiba on the environment?
Shiba Inu by itself uses energy-efficient ways to operate. For instance, there are no new tokens being created, thus eliminating the incentive to compete towards getting mining rewards.
However, the project is an ERC-20 token and therefore inherits some Ethereum’s issues, namely its PoW mining mechanism.
Since all transactions on the platform are recorded on the Ethereum ledger, they will be validated through miners.
Ethereum Miners dedicate huge amounts of energy to create new blocks and update the ledger, a process that has been criticized widely for being eco-unfriendly.
What are the pros of Shiba Inu?
- SHIB is easily accessible worldwide as it’s supported by some of the largest cryptocurrency trading platforms;
- The project has evolved into an ecosystem giving the SHIB token more purpose beyond just amusing the crypto community;
- Because SHIB is based on Ethereum, it has high liquidity and support across different crypto wallets and DeFi planforms.
- It also inherits Ethereum’s positive attributes such as high security and a vibrant development community;
What are the cons of Shiba?
- It does not have an independent blockchain, and that means it has to comply with its host network’s standards;
- It inherits the host network’s negative attributes such as energy wastage, environmental degradation, high transaction costs, and slow confirmation speeds.
Is Shiba a good eco-friendly alternative to Bitcoin?
Although Shiba Inu is a more eco-friendly alternative to Bitcoin, the two aren’t considerably different until Shiba’s host network, Ethereum, transitions to proof of stake.
Nevertheless, Ethereum currently uses less energy than Bitcoin because its PoW implementation is based on a more energy-efficient mining algorithm.
In other words, both mining algorithms are energy-inefficient, but Ethereum’s is less wasteful.
Is Shiba more eco-friendly than XRP?
Ripple’s XRP is currently one of the most eco-friendly blockchains. The XRP Ledger uses a consensus mechanism in which the system preselects transaction validators. As a result, there’s no competition between validators.
Additionally, all XRP coins have already been minted, so there’s no need to mine them.
Shiba Inu is one of the most popular cryptocurrencies in the blockchain market. The token might not be eco-friendly at the moment, but Ethereum is working to increase its energy-efficiency credentials. And when it does, Shiba Inu will not only be eco-friendly, it will also support cheap and fast transactions.