Shiba Inu coin looks poised for a major pullback
At the end of October, Shiba Inu hit what’s currently its all-time high of $0.00008841 per token. It doesn’t sound much, but it has seen an increase of more than 17,300,000% from its launch date in August 2020. So how could Shiba Inu be so successful in such a short amount of time? Here are a few reasons:
– Shiba Inu is accepted by many crypto exchanges for listing.
– The fear of missing out (FOMO) encourages investors to chase SHIB higher
– The launch of decentralized exchange ShibaSwap is forcing longer hold times.
– Landing movie theater chain AMC Entertainment as its first major merchant.
– Tweeted by celebrities like Elon Musk and Vitalik Buterin.
While these successes might sound tangible, in fact, Shiba Inu has been hyped on social media by its community and offers little lasting value. Currently, only 138 merchants worldwide accept SHIB as a form of payment, according to Cryptwerk. Furthermore, with Shiba Inu being an ERC-20 token built on the Ethereum network, it is tied to the same high fees and lag times that can impact Ethereum.
History has also shown that high-flying cryptocurrencies get clobbered after reaching their respective peaks. Chances are good that Shiba Inu could be pummeled over the next year, if not longer.
Potential crypto duo
Ranked 24th with a market cap of $8 billion, Stellar (XLM) looks to have a very good chance to eclipse the market cap of Shiba Inu within the next 1 year. What makes Stellar special is its ability to dramatically improve cross-border payments. With the existing payments infrastructure, it can take up to a week for cross-border payments to be validated and settled. It is an inconvenience that businesses and consumers are facing. However, this problem can be solved by blockchain technology.
With Stellar, fiat currency can be converted into Lumens (XLM), the protocol token of the Stellar network, transferred anywhere in the world, and back into a fiat currency of choice. To do this takes only 4 to 5 seconds and costs only 0.0001 XLM.
In addition, Stellar is a rapidly scalable network. Its developers have claimed the network can handle 3,000 transactions per second (TPS). For comparison, Bitcoin and Ethereum are distributing 7 TPS and 13 TPS respectively.
Stellar has proven its real-world usability. While SHIB is mostly useless outside of crypto exchanges, Stellar partnered with dozens of major banks in the South Pacific in 2017 to process cross-border payments. It is clearly a more valuable digital currency than SHIB.
Algorand (ALGO) is another cryptocurrency that has all the necessary tools to surpass SHIB. It is currently ranked 20th with a market cap of $11.1 billion.
In terms of potential, first of all, Algorand offers a refined proof-of-stake consensus mechanism. Instead of relying on the energy-intensive proof-of-work model that Bitcoin uses, or the standard proof-of-stake model that is likely to be corrupted by smaller players, Algorand implements what is known as pure-proof-of-stake (PPoS). With PPoS, users are randomly selected to propose blocks and vote on proposals. It is a step forward in the decentralization that will ensure a high level of security.
Second, the developers of Algorand have made blockchain interoperability a focus. Currently, most smart contract-focused blockchains are unique, limiting decentralized applications (dApps) to the blockchain they’re hosted on. This means that it will be difficult, if not impossible, for businesses to transfer data, files or capital between each other if utilizing a unique blockchain network. Algorand’s blockchain interoperability bridges these differences, making it possible for developers to do more with dApps and financially focused projects.
Finally, Algorand is very fast. On November 18, the network provided a block finality of 4.38 seconds and was processing over 1,100 TPS. That means Algorand is completing transfers on its network in less than 4.4 seconds, and is expected to be capable of 66,000 transactions per minute. It deserves much more value than the Shiba Inu in terms of its real-world potential.
In the crypto world, nothing is certain. So, think carefully or consult an advisor before deciding to invest in any cryptocurrency.