Shiba Inu is a Play on Sociology, Not Utility

Like our own divisive politics, it’s fascinating that two people armed with the same set of facts could come to drastically different conclusions. In a similar vein, I find the competing narratives over Shiba Inu (CCC:SHIB-USD) utterly enticing.

A close-up shot of a Shiba Inu with a grinning face.
Source: Wollertz / Shutterstock

On one hand, you have folks like me who believe Shiba Inu is a purely speculative vehicle. On the other, there are those who believe its underlying blockchain offers significant utilitarian value.

Now, let me back up for a second. Blockchain technology as a whole has certainly sparked robust debate about the future of finance. Even if the innovation is only used within a limited scope by mainstream society – such as decentralized market making protocols – the blockchain would have done more than enough to warrant praise as a game changer. But does Shiba Inu deserve the same kind of credit?

I don’t think so. In my opinion – and it’s just that, one person’s opinion – Shiba Inu is a grand social experiment. What kind of sociological insights one could extract is myriad but for me, SHIB demonstrates the power of collective initiatives. Thanks to the internet and the decentralized, deregulated nature of cryptocurrencies, it’s never been easier to coordinate trading actions.

Still, many insist that the reason SHIB has value is because of its potential to forward various applications. As my InvestorPlace colleague Chris Markoch pondered, “What is the killer app that makes Shiba Inu different?”

Right now Shiba Inu has some limited use cases. The blockchain ecosystem behind Shiba Inu is based on Ethereum (CCC:ETH-USD) and includes a proprietary decentralized exchange (DEX) named ShibaSwap and an NFT incubator.

Shiba bulls say there are more applications in the pipeline, but there are voices on the other side that aren’t as confident.

I don’t know the answer but it’s not the reason to buy (or avoid) the meme coin.

Democracy and the Contrasting Beauty of Shiba Inu

Again, I’m not trying to dismiss the blockchain technology as a whole, nor am I criticizing the particular protocol undergirding Shiba Inu. Look, the team behind SHIB may very well introduce a decentralized platform that becomes the benchmark for all other blockchain-based applications.

But with over 13,000 crypto coins and tokens per – and a figure that keeps rising – Shiba Inu has plenty of competition. What makes its blockchain protocol better than the other 12,999 networks and iterations out there? When it comes to crypto-related functions, someone’s always coming up with a better mousetrap (or at least claims to).

But in assessing whether you should get involved with whatever crypto you have in mind, it pays to ask a bigger question: are blockchain initiatives worthwhile?

As I take a deeper look into the subject, I’m beginning to think no – at least not for most business-related use cases. You’ve probably read some criticisms about the blockchain, that some contrarians view it as overhyped.

From what I can tell, most blockchain directives represent pure democracies. And my friends, pure democracies are inherently chaotic.

The main reason why we have the Electoral College – a representative republic – is that people are stupid. Now, the Founding Fathers didn’t frame the concept as such, but you can read between the lines. It’s the reason why California Democrats can flood its state with people, but such a cynical strategy will only go so far.

In a blockchain, you are trusting others to act in the best interest of the underlying community. But invariably, moral decency and intellect take a backseat to scope of computing power or size of stake. Blockchain is mob rule of the fortuitous (that is, power to those who simply got in early).

The Difference Is Refreshing

Shiba Inu is different. Yes, some of its Kool-Aid drinkers insist that its network technology can change the world or whatever. But for the most part, the investors of SHIB know what they’re doing. By leveraging the power of extremely small numbers, they’re hoping to make huge profits.

You know what? At least with Shiba Inu, you’re mostly dealing with regular folks, not institutional players and hedge funds that are here today and gone tomorrow. This grassroots backdrop has an undeniable charm which further supports SHIB.

But as a utilitarian asset? No, Shiba Inu will likely be found quite useless. But before you get angry, let me anger you some more. In reality, most blockchains are useless.

Let’s be real: do you think corporations want software where the underlying architecture insists that each decision – or each pivotal decision – be approved via consensus? It’ll be chaotic. That’s why companies hire supervisors, managers and executives to make (centralized) decisions on matters under their purview.

Now, blockchain deserves credit for eliminating middlemen transactions for certain functionalities, such as market making. But that’s a limited-scope use. So again, let’s be real. You shouldn’t invest in SHIB because of its blockchain-based apps. You should invest (or not invest) because of its social pull, nothing more, nothing less.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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