With DOGE and then with SHIBA Inu, now there are a number of dog coins in the market. Let’s explore what is a “meme coin” and should you invest in it or not.
Meme Inspired Cryptocurrency
A meme coin is a type of cryptocurrency that is inspired by some popular meme floating on the internet. Unlike some popular cryptocurrencies like Ethereum and Bitcoin which are based on the features like decentralization and anonymity, meme coins are different. Most of these tokens are characterized by a value proposition derived primarily from their association with a meme.
Some meme coins are satirical and act as a critique of cryptocurrencies or other parts of internet culture. For example, Dogecoin (DOGE), one of the ten largest cryptocurrencies in the world, began as a “joke” by its creator. On the other hand, some meme coins are “scam coins”, which are coins created solely to collect quick money at the expense of others.
One of the obvious questions to ask is why do people buy these coins? People often buy them on the assumption that they will grow in popularity and value. While this sometimes works, like Shiba Inu (SHIBA) and Dogecoin, many of these meme coins fall by the wayside. Even people within the crypto space debate whether or not people should buy these coins.
A value that lasts… for a while
One thing to note about meme coins is how short-lived they tend to be. While some meme coins like DOGE appear to have outlived their expected lifespan, most meme coins come and go in a very short period, both deliberately and unintentionally.
Scam coins can take the form of multiple schemes, such as “pump and dump” schemes that call on people to buy a coin in bulk. Once the value is high enough, the first owners of the coin will “unload” for a massive profit. Alternatively, scam coins can be a “rug pull” where developers take all the money and abandon a project altogether.
However, not all meme coins are scams. Some meme coins have useful functionality, such as DOGE and SHIBA, and have primarily used the “meme” aspect to increase adoption. Meme coins are also seen by members of the community as a vital way to get people interested in cryptocurrencies, with public figures such as Elon Musk frequently signalling meme coins.
Some meme coins
Reading a list of altcoins based on memes can seem surreal. For the sceptics, DOGE sounds a bit strange already, with its entire visual identity based on a reaction photo on the internet from a decade ago. However, DOGE doesn’t even scratch the surface. Meme Coins try to exploit every internet trend imaginable, including other meme coins.
The above list is just a small sample of the vast world of meme coins. There are so many meme coins that there is an entire meme section on the established crypto tracking website CoinMarketCap. There are coins with profane language and coins with names of people who did not consent, such as “CoinYe”, named after Kanye West.
Some coins are just an amalgamation of various other memes, like Dogelon Mars. This coin is a combination of Doge, Elon Musk and their ambitions to take the human race to Mars in the future.
Cryptocurrencies are not the only financial instruments becoming viral sensations on the internet. Recent years have also seen the rise of “meme shares.” For example, in 2020, the value of the gaming company Gamestop Stock rose rapidly after a massive influx of online users from the Reddit community r/WallStreetBets who bought large amounts of stock.
These purchases were made as part of a “ short squeeze ”, where financial institutions and investment firms that bet against the value of the company lost massive amounts of money. Gamestop is considered by many to be the original meme stock, with companies like AMD and Bed, Bath, and Beyond coming soon. These purchases often run counter to traditional investment principles, which typically require close scrutiny of a company’s long-term viability.
While arguments continue online regarding the legitimacy of NFTs, many people have taken advantage of the mass craze to sell iconic memes as NFTs. This includes the original archives of some of the world’s most recognizable internet figures, such as Disaster Girl and Nyan Cat.
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How to spot a meme coin
Before buying any currency, you need to make sure that you are buying something legitimate. You should investigate any potential scams, in which meme coins abound.
If a coin has something related to “DOGE” or “SHIBA” in the name, it’s probably a meme coin. A good place to find out if something is a meme coin or not is through the project’s website. If the creators spend very little space talking about the coin’s potential uses and their page has numerous references to Elon Musk and cute animals, then it’s probably a meme coin.
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