How do Meme Coins Even Work?
Meme coins became something of a staple for the crypto culture. They are regular cryptocurrencies that aren’t necessarily created as a joke, although many of them have this origin. A lot of them are based on popular jokes, and that’s where they get part of their value. They usually have some sort of goal, but these projects typically have no or close to no utility.
The logic behind Meme Coins
Meme coins, aka memetic coins, are cryptocurrencies created on the basis of popular memes or social media trends. There isn’t any specific technology that makes the coin a meme coin, nor is there a common goal for these currencies. They are essentially joke assets that can only find success on the blockchain because of decentralization.
When a lot of people band together to prop up some joke crypto project, it can gain momentum for a short while or even turn into a proper platform if it offers a unique, beneficial technology. However, the nature of memetic coins demands that they start off at least mostly as a joke.
Are they Risky?
Meme coins are often regarded as shaky investments that don't have much momentum besides their initial popularity. There are exceptions to this conclusion and to most of the aforementioned points. There are plenty of meme coins that have research utility and act as fully-fledged projects.
They aren’t safe in the same way that USDT is, and even BTC is safe. The reason is that the market value of a joke coin dissipates right as the popularity of the original meme starts to wane. Coins like USDT or BTC offer some utility, technological value, and an actual way to make money, which makes sure they continue to be used long after their creation.
How to Spot a Meme Coin
- Meme coins are created most commonly based on memes, which can be manifested by characters, images, or references to a particular joke. This is meant to resonate with a large audience and provide a sort of satirical take on crypto, while still trying to make a profit.
- Meme coins often have large, dedicated communities who go to great lengths to take part in what is often a joke.
- While other crypto projects develop some technology or have a specific goal in mind, meme coins usually don’t have any goal besides being that – a joke concept.
- Meme coins usually have lower entry barriers, which allow them to accumulate large audiences and basically let anyone take a risk with a viral coin.
Meme coins aren’t inherently harmful. There’s a way to predict how they are going to behave, and even the creators of such tokens often expect them to lose much of their drive very soon. A lot of them live for a while, however, and it directly depends on the creativity of these projects.
Biggest Meme Coins
There are several big meme coins that survived far longer than 99% of such joke projects. There are several reasons for it, including the continuing virality of memes these coins represent.
Dogecoin is the original meme coin, created back in 2013 with the idea to mock cryptocurrencies by dedicating itself to the then-popular meme Doge. The reason it became a serious project was that people actually flocked to DOGE and were interested in participating. Thus, the creators soon launched a dedicated blockchain and continue to maintain it to this day.
It was a present but mostly irrelevant currency until 2021 when its value grew 300 times over a couple of days. This sudden surge was due to billionaire Elon Musk’s promises to implement DOGE as one of the primary payment methods in the online stores of Tesla, his automotive company. This highlights perfectly how meme coins grow in popularity not through technological advancements, but through virality.
DOGE soon fell back and had several much smaller surges over the following years, and it’s still 20 times more valuable than it was before Musk took notice of it. It’s not among the most valuable currencies, but it’s certainly stable and driven enough to continue its growth for a long time.
Shiba Inu (SHIB)
Shiba Inu or ‘shibatoken’ is a newer meme coin derived from the same meme as Dogecoin, the early 2010s Doge. This one was created in 2020. It’s much less valuable compared to its bigger brother. The difference is that SHIB was created as an experiment to see how much value and traction a meme coin can get.
It has a small difference, but there is still a distinction. It was basically introduced as a test coin into meme coins, including Dogecoin. In practical terms, it’s identical to its predecessor, as it also doesn’t have any particular technology to develop. It had some semblance of a goal, which didn’t help it much in the end.
It’s important to note that Dogecoin occupies the absolute majority of the meme coin market, and SHIB is considered the second-biggest token of this sort. However, while DOGE trades at $0.08 (at the moment), SHIB’s value is set at $0.0000077. It’s also not as tied to the meme, but rather to the concept of a meme coin.
PEPE Coin (PEPE)
PEPE Coin is a newer cryptocurrency launched in the spring of 2023 based on the long-running meme that is Pepe the Frog. Pepe is still popular, particularly in the imageboards, which actually share some characteristics with PEPE. A lot of its popularity comes from imageboards, such as 4chan.
These tokens don’t have any specific philosophy, they are obscure and there isn’t much in the way of structure. It’s simply a joke forwarded by the dedicated Twitter account that reports updates and milestones. The token is traded at $0.0000013. It lost much of its initially accumulated value in early May, just like other meme coins.
It can be argued that meme coins serve their purpose well – they are a distraction and a fun way to participate in passion-driven events. They don’t contribute much to technological advancement, they are a poor way to make money, and they don’t stay relevant long. Basically, they are memes, and they can be fun.