Disclaimer: The information provided in this article is for educational purposes only and should not be considered as financial advice.
Meme coins, they are shrouded in mystery and lead to questions such as, “What are they for?”, “What exactly are they?”, and “How much are they worth?”. These are all valid questions because meme coins have taken the cryptocurrency market by storm but don’t seem to have a clear purpose.
We’re going to answer your burning questions by looking at popular meme coins and the one that ushered in this trend.
Table of Contents
- Meme Coins – A Joke or Are They More?
What Are Meme Coins?
This type of crypto is called meme coins because they are created by taking advantage of whatever popular internet memes or trends are viral. Sometimes, they can play on established cryptocurrencies like Bitcoin or ETH, with a satirical spin. Meme coins usually feature something that speaks to the crypto space like a cute mascot, catchy name, or fun logo.
What makes them gain traction and become super popular? Reliance on word-of-mouth from communities and spreading rapidly on social media platforms.
It’s not surprising if you’re unsure about what meme coins do or how they work, because they usually lack utility, purpose, or new tech exploration. Since their value is pegged to the online hype, they are also a highly speculative and volatile investment.
That’s not to say that meme coins generated in more recent years don’t have utility as some can, but meme coins were originally created as a joke.l
How Do They Work?
Meme coins are cryptocurrencies, just like more established ones. They are also created with blockchain technology, use decentralized networks, and have a ledger of ownership. What sets them apart from traditional crypto is the underlying utility. Most meme coins don’t have a specific purpose other than to create hype.
Creators of meme coins can start by introducing initial coin offerings to test the market. Like regular cryptocurrencies, meme coins can be bought, sold, and traded on exchanges.
Examples of Top Meme Coins
You may not realize that some coins that are crazy popular are meme coins. Here are the top ones:
- Dogecoin (DOGE) – Who doesn’t love dogs? Dogecoin is the original meme coin that was designed after the popular doge meme. Created back in 2013, it features a Shiba Inu dog giving audiences the side-eye.
It was initially a joke, but it soon took crypto investors and the community by storm and spawned the creation of other meme coins. - Shiba Inu Coin (SHIB) – As you can imagine, Shiba Inu coins were inspired by the OG meme coin, Dogecoin. It followed 8 years after the largest meme coin and also features the same breed of dog as its mascot but in cartoon form.
- Floki Inu (FLOKI) – Another dog meme coin, Floki was created after Elon Musk’s dog with inspiration from the previous two meme coins. Floki aimed to not only embody meme coin culture but also combined that with charities, giving it more utility.
Pros and Cons of Meme Coins
Looking at what most meme coins are, it doesn’t seem like they bring much to the table. Many meme coins fade out not long after creation, never having gained any popularity or recognition. People have trouble accepting meme coins due to the unpredictability, but are there any advantages?
Pros
- Potential for high returns – Meme coins rely on community hype, and while they can be volatile, there is a chance for great returns on investments. Some meme coins have experienced high surges in value in a very short time. Just be aware that they also drop in price quite quickly.
- Viral marketing – If done right, meme coins work well as a marketing strategy. You can gain more exposure and widespread recognition for your brand, cause, or just the coin itself.
- Fostering a sense of community – Because meme coins are spread within the community on various platforms, it helps those new to the space feel a sense of belonging and experienced investors can also get in on the hype.
Cons
- High speculation – There are more risky meme coins than safe ones, and even the ones that provide returns can see high fluctuations. You can never be sure with a meme coin.
- No general value or utility – Unlike other coins and even NFTs, a meme coin lacks inherent purpose.
- An opportunity for scams – It’s easy to buy meme coins to manipulate the market, do a rug pull, or exercise a pump-and-dump, taking investors’ money.
Before Buying Meme Coins
Do you want to get in on a popular meme coin? Before you invest your hard-earned money, you should make sure you do your due diligence. After all, some of these coins are incredibly volatile.
- DYOR. Do your own research into the specific meme coin you want to purchase
- Double-check the credibility and legitimacy of the team behind it
- Understand your risk tolerance and financial situation. Can you take the loss if the coin fails?
- Diversify all your investments. Don’t put all your money in one meme coin
- Make sure you have a secure crypto wallet to keep your assets safe like those from SecuX’s line
- Buy small and in increments because the market can change quickly
- Keep up with the market trends and stay informed
Conclusion
Meme coins are responsible for a very unique phenomenon in the crypto space. While value is assigned by humans, there have been few examples of assets reported to give thousands upon thousands of dollars in return with no inherent value. The market now is much different than what it was, so make sure you consider your financial circumstance before investing in a meme coin.
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