What are meme coins and is it just a joke?
Due to the popularity of cryptocurrencies, certain terminology from that domain is more and more present in the media with which we are in contact every day.
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Due to the popularity of cryptocurrencies, certain terminology from that domain is more and more present in the media with which we are in contact every day. We can hear various expressions that determine the elements of digital transactions of cryptocurrencies or participants in the whole process, and often we are reached by numerous names of cryptocurrencies, which are becoming more and more over time.
The most well-known cryptocurrency is bitcoin, and for many, it is the basis of all digital transactions. Bitcoin is certainly the most recognizable cryptocurrency because it can be bought in more and more places. Other cryptocurrencies will also be recognized by many, but lately the so-called meme coins.
Cryptocurrencies based on memes such as dogecoin have recently gained mass popularity, but interestingly, they have also created their own derivatives such as shiba inu, dogelon mars, samoyedcoin, or doge dash.
Although often created as a joke, these cryptocurrencies can become mainstream and gain enough popularity for people to start buying them. For example, dogecoin had a big rise in value during May last year until it started to fall slightly, but currently holds the eleventh position in the market.
If, in the case of dogecoin, indicators can suggest that meme coins hold value, should we be free to invest in meme coins?
We advise everyone to be very well informed about them before making an investment decision.
Meme coins are inspired by various memes and internet jokes. The emergence of dogecoin, for example, was inspired by the famous Doge meme from 2010 with a depiction of the Japanese dog breed shiba-inu, which went viral in late 2013.
Sometimes their occurrence can be completely accidental. In December last year, the mongoose coin was created after a member of Congress came up with the name during a conversation about cryptocurrencies.
The essence of the meme coin is that they should not be taken seriously, but in case they catch momentum and members of various communities invest in them, the joke continues and the story changes.
When a particular meme coin becomes popular and its price rises, investors may appear who will further raise its value. It often happens that meme coins gain popularity after celebrities from public life buy them or mention them on social networks. Elon Musk is probably best known for this.
Meme coins have been present on the market for a long time and have their roots in the so-called "Meme stock" wars from the end of 2020 when the Reddit community WallStreetBets "inflated" the share prices of GameStop, a company that is a world leader in the retail of video games and gaming equipment.
The term "Meme stock" by definition refers to the shares of an individual company that have gained high status through online channels and social networks. Online communities with this type of stock can create so-called "hype" through narratives and conversations elaborated on platforms such as Reddit, Twitter, or Facebook. "Meme stocks" do not have the so-called "Pump-and-dump" scheme, it is usually a matter of buying them and holding the purchased value firmly even after it experiences a decline.
The source of meme coins can make it easier to understand.
Reddit was a platform on which, in addition to "meme stock" wars, cryptocurrency wars also took place. A community on Reddit called SatoshiStreetBets has launched a crypto project similar to the value trading war against "mainstream" cryptocurrencies such as bitcoin and ethereum in 2021.
Celebrities from the Internet, especially Elon Musk, boarded that "meme" train and simply the popularity of meme coins has grown. Their original purpose was to joke or defy trends in the world of cryptocurrencies and ultimately encouraged other people and communities to create similar versions.
Some meme coins are far from ordinary jokes. The creators of the floki inu meme coin are in partnership with the Million Gardens Movement, a foundation co-founded by Musk's brother Kimbal.What are the characteristics of meme coins?
The supply of meme coins is often very large or unlimited. Unlike bitcoin, which is programmed to have the final numbers of units available for mining, meme coins will often have billions of units in circulation. Meme coins will also not have the typical mechanism of burning coins or removing them from circulation, but their numbers will constantly increase.
This is why their initial value per unit is very small. Currently, six dogecoins can be bought with one dollar, and some other meme coins such as safemoon are worth even less ($ 0.0000014).
Such a low price of meme coins contributes to their popularity and the minimal effort invested in them allows them to quickly adapt to a new topic that is popular at a certain time.What are the risks of investing in cryptocurrency memes?
Since meme coins often depend on the sentiment and arbitrariness of the community outside of influencer tweets, posts, or views on online platforms, it can be said that determining their value or price is volatile and changeable.
While this may mean that the value of a particular cryptocurrency meme may rise sharply (e.g. the case of dogecoin), a completely reverse trend can also occur leading to the community losing interest in them altogether.
Outside the crypto world, most meme coins are worthless. No one will accept, for example, safemoon or samoyedcoin as a form of payment for products and services.
One can simply conclude that most meme coins will not be in circulation after some time due to their changing nature, and many will not even exist anymore.
Finally, it should be said that one should be very careful when investing in meme coins because they often do not have a defined background and it is difficult to get information about them. Even those meme coins that are most present on online platforms can be a common scam, so great caution is recommended when deciding on a potential investment.