What are Meme Coins?
Introduction
This article will be useful for everybody who wants to learn more about a fast-growing element of Cryptocurrency. Meme Coins are a form of cryptocurrency that is often shown in conjunction with a funny picture. The existence of meme coins poses challenging questions about what gives anything its value and that philosophical element will also be discussed in this article.
Chain 1: Famous Meme Coins
The two most famous meme coins (Doge and Shiba) are depicted below:
Dogecoin
Shiba Inu
There are, of course, hundreds of other meme coins however these are the most famous. Some others that you may have heard of are Pepe Coin, Floki and variations on Doge and Shiba).
Doge was initially released on December 6th 2013, and authored by Billy Markus and Jackson Palmer. Doge is the first meme coin and also (at the time of writing) has by far the largest market cap of any meme coin. Here is a graph of its value vs time:
This graph depicts how Doge rapidly gained traction in 2021 before sharply plummeting and has remained relatively stable since 2023.
Shiba was initially released in August 2020, authored by an individual under the pseudonym of “Ryoshi”. Shiba (at the time of writing) has the second-largest cap of any meme coin however this figure is approximately half that of Doge. It is likely that the creator of Shiba Inu had been inspired by Dogecoin, as the dogs depicted in Doge and Shiba Inu are both of the Shiba Inu breeds of dog. The market progression of Shiba is closely correlated with the market progression of Doge so Chainspeech will not include an excess graph.
Chain 2: Utilisation of meme coins
Meme Coins have been utilised on a global scale and have benefitted the lives of millions. Dogecoin has helped to fundraise for the 2014 Winter Olympics and for a NASCAR Sprint Cup driver.
A particularly notable example of this is the donation of Shiba to the COVID-Crypto Relief Fund. This charity fund was announced on the 24th of April 2021 in an attempt to fight back against the second wave of COVID-19 in India. This project has promised UNICEF India to produce 160 million syringes which can be used to help with vaccination programmes. The amount of Shiba donated was worth over $1B and was given by Vitalik Buterin (The founder of Ethereum).
These examples ought to make the critics of meme Coins question their views. It is indisputable that these coins have had a massive impact on people’s lives and have provided many opportunities for traders.
Chain 3: What gives meme Coins value?
This title probably deserves an article of its own. However, we at Chainspeech pride ourselves on our concision.
Meme coins have received widespread criticism in that they do not have any inherent value. For example, if one were to offer an alien 1T dogecoin for an egg then the alien would probably not take the deal. This demonstrates a problem with meme coins - they only have value because everybody believes that they do. However, if everyone was to stop believing that Dogecoin had value then Doge would cease to have any value whatsoever.
However, the problem with the argument above is that it can be applied to any cryptocurrency or any currency for that matter. If I were to offer an alien $1T for an egg then the alien would probably not take the deal. The bank transfer of $1T will cease to mean anything if everyone believes that dollars have no value.
Chain 4: What is Pump-and-dump?
Pump and dump (P&D) is a fraudulent activity which has two steps:
Pump
An individual or organisation buys some of a stock and then advertises said stock - thereby inflating its value.
Dump
The individual or organisation then sells the overvalued stock and makes a profit
This activity has been used a number of times throughout history. Cryptocurrencies are especially vulnerable to this activity and meme coins are the most vulnerable. This is because scammers and influential people can reach thousands and up to millions of people - by advertising a particular currency. This has resulted in many people rushing to the market to buy up the currency right as it balloons in value and then the scammer or influential person can make a massive profit.
These schemes have a surge in usage with the onset of social media, and the fact that some cryptocurrencies represent popular memes means that these currencies can balloon exponentially in value.
Conclusions
Meme coins certainly have had a turbulent history and will have a volatile future. This makes them an attractive “get rich quick” element to them due to their volatility from numerous pump-and-dump schemes.
On their surface, meme coins seem useless and stupid however they have saved very many lives (for example, in the COVID-Crypto Relief fund) and, at the time of writing, have large market caps and not insignificant valuations. When the rubber meets the road, it does not matter if somebody thinks that these meme coins are just jokes because these currencies exist and have had an impact on history.
References
https://coinmarketcap.com/view/memes/
https://www.statista.com/chart/24646/dogecoin-price/
https://www.investopedia.com/terms/c/cryptocurrency.asp
https://en.wikipedia.org/wiki/Shiba_Inu_(cryptocurrency)
https://en.wikipedia.org/wiki/Dogecoin
