What is Shiba Inu?
A. Cryptocurrencies
A cryptocurrency is a digital or virtual currency that uses cryptography for security. Cryptocurrencies are decentralized and operate independently of a central bank.
Cryptocurrencies and blockchain are related because cryptocurrencies are built on blockchain technology. A blockchain is a decentralized digital ledger that records transactions across a network of computers. Each block in the chain contains a cryptographic hash of the previous block, a timestamp, and transaction data. Cryptocurrencies use blockchain technology to create a digital asset that can be exchanged securely and transparently without a central authority or middleman. The blockchain network verifies and records all transactions, creating a permanent and unalterable record of ownership and transaction history for each cryptocurrency unit.
Bitcoin is the first and most well-known cryptocurrency. It was created in 2009 by an unknown individual or group using the pseudonym Satoshi Nakamoto. Bitcoin operates on a decentralized network, meaning it is not controlled by a central authority or middleman. Instead, transactions are verified and recorded on a public ledger called the blockchain.
B. Altcoins and Shiba
Altcoins, or alternative coins, are any cryptocurrency that is not Bitcoin. Shiba Inu (SHIB) is an altcoin.
Altcoins like SHIB are often built on top of existing blockchain platforms like Ethereum. Ethereum is a layer 1 blockchain, meaning it is the primary layer of the blockchain network. Shibarium, on the other hand, is a layer 2 blockchain built on top of Ethereum. Layer 2 solutions are designed to increase the speed and efficiency of transactions on the blockchain.
Shiba Inu has a unique history in the world of cryptocurrencies, having been created as a joke currency based on the popular Dogecoin. However, it has gained a significant following and is now considered a legitimate altcoin.
What is Shibarium?
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Shibarium is a layer 2 blockchain built on top of the Ethereum layer 1 blockchain. Layer 1 blockchains, such as Ethereum, are the primary layer of the blockchain network. They process all transactions and smart contracts on the blockchain. Layer 2 solutions are designed to increase the speed and efficiency of transactions on the blockchain.
Layer 2 blockchains
Layer 2 blockchains are built on top of layer 1 blockchains and use them as a foundation. They are designed to enhance the capabilities of the layer 1 blockchain by processing transactions off-chain. This means that transactions are not stored on the layer 1 blockchain, but are instead processed on a separate layer 2 blockchain. This allows for faster and cheaper transactions, as well as increased scalability.
In the case of Shibarium, it is designed to enhance the capabilities of the Ethereum blockchain by processing transactions and smart contracts off-chain. This increases the speed and efficiency of transactions on the Ethereum network.
The advantages of layer 2 solutions include faster transaction speeds, lower transaction fees, and increased scalability. By processing transactions off-chain, layer 2 solutions can handle a much larger volume of transactions than layer 1 blockchains, which are limited by their processing power.
Shibarium works by processing transactions and smart contracts off-chain, and then submitting the final results to the Ethereum layer 1 blockchain. This allows for faster and more efficient transactions on the Ethereum network.
The Shibarium ecosystem includes various decentralized applications (dApps) and coins built on top of the Shibarium layer 2 blockchain. These dApps and coins are designed to take advantage of the increased speed and efficiency of the Shibarium network.
Pros of Layer 2 Blockchain
- Faster transaction speeds
- Lower transaction fees
- Increased scalability
- Ability to handle a larger volume of transactions than layer 1 blockchains
- Enhanced capabilities of layer 1 blockchain by processing transactions off-chain
Cons of Layer 2 Blockchain
- Increased complexity, which can lead to more potential points of failure
- Dependence on layer 1 blockchain for security, which can introduce security risks
- Difficulty in interoperability between different layer 2 solutions
- Risk of centralization if too many transactions are processed off-chain by a single entity
Shibarium PoS Chain
Shibarium's PoS (Proof-of-Stake) chain utilizes side chains to process transactions, resulting in unparalleled transaction speed and cost efficiency. PoS also guarantees asset security by employing the reliable Plasma bridge framework and a decentralized network of PoS validators.
Shibarium is fully compatible with the Ethereum Virtual Machine (EVM) and also supports all ERC token standards and smart contracts.
How Shibarium Works?
Shibarium is a layer 2 blockchain built on top of the Ethereum layer 1 blockchain. It processes transactions and smart contracts off-chain and submits the final results to the Ethereum layer 1 blockchain, providing faster and more efficient transactions on the Ethereum network.
Shibarium's platform enables blockchain scalability through its hybrid Plasma and PoS side chains. Its architecture features a generic validation layer separate from different execution environments. This architecture consists of three layers:
- Heimdall,
- Bor, and
- Contracts.
The Ethereum layer of the Shibarium Network comprises a set of contracts on the Ethereum blockchain. The second layer, Heimdall, includes a collection of Proof of Stake Heimdall nodes working in tandem with the Ethereum main network. Heimdall monitors staking contracts on the Ethereum layer and commits checkpoints in the Shibarium Network to the Ethereum blockchain.
The Bor layer consists of a collection of Bor nodes responsible for Bor nodes. Developers can use the Plasma side chain of the Shibarium Network to facilitate specific state transitions and address common precedents for ERC-20 and ERC-721 tokens, as well as asset swaps. The Proof of Stake functionalities deliver the desired benefits in cases where arbitrary transitions are required. The hybrid design of Shibarium's architecture highlights its flexibility in using Proof of Stake or Plasma side chains.
To activate the Proof of Stake mechanism on Shibarium, users must deploy staking management contracts on Ethereum, followed by a collection of incentivized validators executing Heimdall and Bor nodes. Shibarium plans to introduce support for more base chains while Ethereum serves as the first base chain. The network aims to create an interoperable and decentralized layer 2 blockchain network following community consensus and suggestions.
To know more about it visit - https://docs.shibariumtech.com/shibarium/welcome-to-shibarium/architecture
Takeaway
Shiba Inu (SHIB) is an altcoin built on top of existing blockchain platforms like Ethereum. Shibarium is a layer 2 blockchain built on top of Ethereum, designed to increase the speed and efficiency of transactions on the blockchain. By processing transactions off-chain, layer 2 solutions can handle a much larger volume of transactions than layer 1 blockchains, which are limited by their processing power. Shibarium's PoS (Proof-of-Stake) chain utilizes side chains to process transactions, resulting in unparalleled transaction speed and cost efficiency.