In cryptocurrency, the rise of meme coins has been nothing short of extraordinary. These unique digital assets take inspiration from popular memes and often possess a comedic or entertaining trait.
Generally, “Meme coin” is a term used to refer to cryptocurrencies named after characters, individuals, animals, artwork, or anything else that can be mimicked.
Most are supported by enthusiastic online traders and followers and are generally intended to be light-hearted and fun. While meme coins may be entertaining to some, they are also highly risky investments and may hold little or no intrinsic value.
The adventure of the crypto coin meme started in 2013 with the creation of Dogecoin which Billy Markus and Jackson Palmer created, and this was just the beginning of the cryptocurrency meme coins.
After Dogecoin’s success, numerous other meme coins were created, giving us an extensive meme coin list, such as the Shiba Inu, or with its second name, the Dogecoin killer. The Baby DogeCoin or the Dogelon Mars is a meme coin that refers to Elon Musk.
“Meme coin are designed like any other cryptocurrency, like Bitcoin or Ethereum,” So what makes them different from normal coins?
Meme Coin vs Regular Coin
a) Volatility and Value:
The primary difference between regular coins and meme coin lies in their purpose and perceived value. Regular coins are generally backed by a solid project, a team of developers, and a clear roadmap for future development. They have practical uses and offer solutions to existing problems.
Meme coins, however, often lack this substantive backing. Their value is primarily driven by internet trends and social media hype rather than underlying technology or utility. This makes them highly volatile and risky investments.
b) Meme coins working
Meme coin work like any other cryptocurrency, taking full advantage of the blockchain and related technology. They’re often built on blockchains that use smart contracts, like Ethereum and Solana.
c) Ease of Creation of Meme coins:
When it comes to creating meme coins, it is just 10 min of work(provided you use libraries like OpenZeppelin, etc.), provided you have technical expertise.
Meme coin leverage existing blockchain platforms like Ethereum or Binance Smart Chain, which provide toolkits and templates for creating tokens, so you just have to create a smart contract for one of your meme coin, deploy it, and your meme coin is ready.
Whereas developing a regular cryptocurrency involves creating a blockchain or using an existing one (like Ethereum), programming the coin’s protocol, designing the consensus mechanism (Proof of Work, Proof of Stake, etc.), and implementing smart contracts if needed. This requires a strong understanding of blockchain technology, cryptography, and programming.
How Risky Are Meme Coins
As we have already seen in the above topic, meme coin are highly volatile. Their prices can skyrocket or go down quickly or be driven by social media trends and tweets rather than underlying economic factors, making them the perfect investment for investors looking for quick profits based on hype and trend rather than long-term value or utility.
The difference between meme coins and ordinary cryptocurrencies like Ethereum or Bitcoin is the wide range of applications; meme coin have a limited utility beyond being a medium of exchange.
Tips to Buy Meme Coins
Here are some essential tips to guide you:
- Do Thorough Research: Before investing in any meme coin, thoroughly research its background. Understand the coin’s concept, use case, team involvement, and community support.
- Evaluate Market Trends: When you plan to invest or buy a Meme coin, you need to keep an eye on the latest trends in the crypto world and understand how they might affect its value. This will allow you to predict the coin’s value and know where to invest.
- Check Liquidity: Be sure that the coin has sufficient Liquidity on exchanges to trade it quickly and not search desperately for a buyer or a seller.
Key Takeaways:
- Meme coin are generally highly volatile, as they often have an abundant supply and their popularity is largely driven by pop culture.
- Dogecoin and Shiba Inu are the leading meme coin, though there are hundreds of others available.
- Having a thorough understanding of a meme coin requires verifying that liquidity pools are tied to burn addresses, ensuring third-party audits have been completed on the project, and confirming no one entity owns more than 5% of the total supply.
- Meme coins’ reputation of offering no clear use case or benefits is changing with the emergence of utility meme coin.
