how does shrinkify work?

Tweet

i have used shrinkify a lot here since a lot of the news places i like to link to are a mile long but it got me to thinking. every time i use it i always get a link with maybe 1-3 letters or numbers after "http://shrinkify.com/" and i know i CANT be the only person using this site so how the heck does it keep all the url's so short when it says the link is permanent?? i would think it would be long but then i guess that would defeat the point.. any clue?