- Meme coins are the trend right now, but are they profitable?
- What is the origin of meme coins?
- Should you invest in meme coins?
In the unpredictable world of cryptocurrencies, coins pop up every day. CoinMarketCap estimates that there are about 22,932 cryptocurrencies out there. Of these thousands, Bitcoin and Ether are the most popular. The rest are called altcoins, coined from two words, alternative and coin. And this group is where meme coins are in. In fact, meme coins are even more distinct.
What are meme coins?
Meme coins are cryptocurrencies dubbed after people, animals, artwork, or anything else that can be imitated. They are usually supported by an energetic and enthusiastic online community of traders and followers who intend to have fun and eventually make money with it.
Meme coins, though unique, are dependent on blockchain technology, a distributed database that facilitates transparent information exchange and tracking of virtual assets such as cryptocurrencies and Non-fungible Tokens (NFTs).
What are the popular meme coins?
There are thousands of meme coins, but the most popular ones, according to market capitalization, include Dogecoin (DOGE), Shiba Inu (SHIB) and Pepe (PEPE). There are loads of not-so-popular ones like Bonk (BONK), Myro (MYRO), FLOKI, Book of Meme (BOME), Dog (Runes), Memecoin (MEME), Maga (TRUMP), Pepecoin (PEPECOIN), Baby Doge (BabyDoge), Ponke (PONKE), Myro (MYRO) and many more.
How are new meme coins created?
To understand how meme coins are created, let's go back to the first meme coin, Dogecoin.
In 2013, software engineers Billy Markus and Jackson Palmer created Dogecoin to mimic a popular meme, the Shiba Inu dog and make fun of Bitcoin. Markus and Palmer admitted that they deliberately misspelt dog for doge to make sure the coin was “as ridiculous as possible.”
A massive online community emerged in support of the coin, and gradually, it became very popular. The price skyrocketed when Tesla CEO Elon Musk endorsed it.
Well, that became the bedrock of meme coins as they are today. Soon after, more meme coins started emerging.
Creating meme coins is not difficult. Here’s why: Because the blockchain technology that powers these cryptocurrencies is open-source, their creators can easily "fork" already-existing cryptocurrencies by essentially copying and pasting the underlying blockchain and launching them online with only minor changes to the name or logo. To fork in blockchain means to effect a change in a blockchain's programming.
Tauhid Zauman, an associate professor at Yale School of Management, as quoted by Forbes, sees it this way: “A meme coin is just a cryptocurrency that can be created easily with a few lines of code. The coin can create its own blockchain or live on an existing blockchain.”
Are meme coins profitable? Should you invest in meme coins?
Meme coins could be really profitable if you spot the good ones and invest at the right time. This means researching and studying the coins before investing.
Dogecoin’s price movement since its launch
Dogecoin is arguably the most successful meme coin. But not many are as successful as Dogecoin. In fact, many people have lost their money after investing in meme coins. A good example of a meme coin that has successfully failed is the Timeless Davido meme coin ($DAVIDO), which lost more than 90% of its value in less than 7 days of launch.
Even the successful ones are not always successful. For instance, Dogecoin has fallen 91% from its all-time high (ATH), and Shiba 84%. If anyone had invested at the ATH, they would have lost nearly all their investment.
The fact remains that cryptocurrencies are volatile and care should be taken, enough research done before investing.
“We tend to only focus on the winners and ignore the fact that those wins are extreme outliers,” says Jonathan Zeppettini, international operations lead at Decred. “Nobody remembers the names of Dogecoin’s peers from 2013-2014, which now don’t trade anywhere and eviscerated untold amounts of speculator money.”
For Nick Saponaro, CEO of blockchain startup The Divi Project, “Most meme coins have gone to zero or failed to take off at all. Meme coins should be considered a dice-roll and those putting their money into these speculative assets should do so, with the assumption that they will lose everything they invest.”
