Claim Giveaway Token Proof of Reserve

What are Meme Coins and How Important They Are

Key Takeaways
  • Meme Coins are associated with comedic traits, they are not that different and work in the same way as any other cryptocurrency.
  • Meme Coins are often built on blockchain technology and are decentralized. Similar to some famous cryptocurrencies such as Ethereum and Solana, they also use ‘smart contracts.’
  • The first Meme coin dates back to 2013, when two software engineers -Billy Markus and Jackson Palmer created Dogecoin (DOGE) over the course of just 3 hours.
30-Nov-2023 Sudeep Saxena
What are Meme Coins and How Important They Are

Meme Coins Work In the Same Way As Any Other Cryptocurrency

What does the first thing come to your mind when you hear the word meme? A humorous image? a video? Or a piece of text copied, usually with slight variations spread all around by internet users?

Well, Meme coins are something like that. Unlike other form of cryptocurrencies, they are typically created as a joke and are not intended to be used as a serious form of currency. Instead, investors use these coins for speculation and trading purposes, hoping to profit from the amount of popularity it gains.

The popularity of Meme coins

The first Meme coin dates back to 2013, when two software engineers -Billy Markus and Jackson Palmer created Dogecoin (DOGE) over the course of just 3 hours. This new cryptocurrency was based on one of the most famous Internet memes of the 2010s— the “doge” Shiba Inu dog.

The coins started gaining popularity when the ‘Dogecoin’ community raised around $30,000 for the Jamaican bobsleigh team that had qualified for the 2014 Winter Olympics in Sochi, Russia, but was unable to fund the trip.

However, it wasn’t until it’s most high-profile booster, Tesla CEO Elon Musk started promoting it that it rose to a pop culture phenomenon. 

How Do Meme Coins Work?

Though Meme coins are associated with comedic traits, they are not that different and work in the same way as any other cryptocurrency. They are often built on blockchain technology and are decentralized. Similar to some famous cryptocurrencies such as Ethereum and Solana, they also use ‘smart contracts.’

As Meme coins are not backed by any substantial asset or revenue-generating business, its value is purely based on its demands, which can be influenced by factors such as social media buzz and celebrity approvals. 

Benefits of Meme coins:

Let us take a look at some of the benefits that these coins provide:

  • Due to its volatility, Meme coins have the potential for significant returns.

  • Meme coins are a fun asset type to use to learn about cryptocurrency and blockchain technology.

  • One of the best things about Meme coins is that they are relatively affordable, allowing investors to enter the market without a sizeable initial investment.

  • The communities in Meme coin are often vibrant and active, which gives investors with a sense of belonging and camaraderie that results to an active investing and trading community

Disadvantages of Meme coins

Though there has been instances where investors earned marginally huge returns from trading and investing in meme coins, however similar to every other investment, caution is absolutely necessary:

  • Since Meme tokens are highly volatile, prices often experience extreme fluctuations in a short period of time.

  • Due to influencers and "pump-and-dump" schemes being a common occurrence in the meme coin market, investors are highly prone to manipulation.

  • The Meme market is said to lack several fundamentals. One of the reason being that many meme coins lack underlying value, that lead to their prices primarily driven by hype and market sentiment.

Popular meme coins

Today there are more than 450+ meme coins and meme tokens listed on CoinMarketCap. Here are some popular ones:

Dogecoin (DOGE)

The first Meme coin to exist. Its users is Shiba Inu (SHIB). It has a market cap of over $11 billion with daily average transactions of 30,000. It is one of the few meme coins that has its own blockchain.

Shiba Inu (SHIB)

Considered the second largest meme coin by market cap. Its users is Shiba Inu (SHIB). Shiba Inu gained its popularity from Vitalik Buterin and Elon Musk. Vitalik was sent 50% of the SHIB’s initial supply out of which 10% was donated to India's COVID relief fund and the rest was burnt by him.

Pepe Coin (PEPE)

Pepe coin was created as a tribute to the Pepe the Frog internet meme, created by Matt Furie, that gained popularity in the early 2000s. This new meme coin attracted a large community of supporters by capitalizing on the already existing community of DOGE & SHIB.

Launched in April 2023, PEPE attracted a large community of supporters by capitalizing on the existing community of DOGE & SHIB.

Conclusion

Based on internet memes, Meme coins are a unique type of cryptocurrency that has gained massive popularity in recent years. While these coins have the potential to revolutionize the cryptocurrency industry, it is however important to remember that its value is highly speculative and come with a significant degree of risk. As with any investment, it's important to do your research and proceed with caution.

Also Read: What is Cardano and how is it different from Bitcoin?

WHAT'S YOUR OPINION?
Related News
Related Blogs