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What is a Meme Coin? Why should we care about meme coins?

Meme coins are a type of cryptocurrency that is based on an internet meme. What are the differences between meme coins and other coins? Everything will be explained in this article.
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lochoang
7 min read
Published Apr 24 2022
Updated Mar 21 2024
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What is a Meme Coin?

A meme coin is a type of cryptocurrency that originated from an online meme or jokes. Unlike other cryptocurrencies, which are often created with the intention of becoming serious investments, meme coins are generally created for amusement purposes.

meme coin
A meme coin is a type of cryptocurrency that originated from an online meme or jokes

Meme coins normally don't have many use cases and are not intended to be used as a currency for day-to-day transactions. However, some people do trade meme coins on exchanges, and their value can fluctuate depending on demand.

While most meme coins are created as jokes, there are a few that have managed to gain traction and become somewhat serious investments.

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Dogecoin, which is based on the popular "Doge" meme, is one of the more successful examples. As of May 2021, Dogecoin had a market capitalization of over $80 billion.

Why should we care about meme coins?

shib meme coin
SHIB price increased tremendously just over a year

Meme coins often have silly or funny names and designs, and they are usually created as a way to poke fun at the cryptocurrency industry.

However, some meme coins can be a profitable investment. Here is why:

Meme coins are often created with good intentions

Many meme coins are created as a way to make light of the often-serious cryptocurrency industry. If the project is successful,  it can bring attention to the market and even help to onboard new users.

Meme coins can have serious underlying technology

Just because a coin is based on a meme doesn't mean it doesn't have serious underlying technology. In fact, some of the most popular meme coins, such as Shiba Inu have very strong teams behind them with extensive experience in the cryptocurrency industry. They even created a decentralized exchange called ShibaSwap.

Meme coins are usually very cheap

Since meme coins are often created as a way to poke fun at the cryptocurrency industry, they are often very cheap. This means that you can get in on the ground floor of these projects for just a few dollars.

Meme coins have the potential to increase in value

While meme coins are often created as a way to poke fun at the cryptocurrency industry, some of them have serious underlying technology and the team behind them. This means that they have the potential to increase in value over time. For example, the price of Shiba Inu (SHIB) has increased by over 10,000,000% since it was first launched.

Meme coin characteristics

top meme coin
There are a few characteristics that separate meme coins from other coins

There are a few key indicators that can help you identify meme coins in the cryptocurrency market.

First, look for coins with a low price point, such as $0.0000001. These are typically newer coins that haven't yet established themselves as serious contenders in the market.
Second, look for coins with a high degree of price volatility. Meme coins tend to be more volatile than other types of cryptocurrencies, so this is another indicator to watch out for.
Third, the meme coin symbols are typically very eye-catching and memorable. This is because they need to be easily recognizable in order to gain traction on social media platforms like Twitter and Reddit.
Finally, meme coins often have a strong community backing them. This is because these types of coins are often created as a way to support a particular cause or movement.

By keeping an eye out for these key indicators, you should be able to identify meme coins in the cryptocurrency market relatively easily.

Altcoin vs Meme Coin

meme coins
Meme coins can be seen as entertainment projects.

When it comes to cryptocurrencies, there are two main types: altcoins and meme coins. Both have their own unique characteristics and purposes. Here's a look at the key differences between these two types of digital currencies:

Altcoins are alternative versions of Bitcoin that aim to improve upon the original design in various ways. There are literally thousands of different altcoins available, each with its own unique features and purpose. Some popular altcoins include ETH, LTC, BNB, and C98.

Meme coins, on the other hand, are digital currencies that have been created primarily for entertainment purposes. The most famous example is probably Dogecoin, which was originally started as a joke but quickly gained a large following. Other popular meme coins include DOGE, SHIB, and AKITA.

So, what are the key differences between altcoins and meme coins? 

Firstly, altcoins are typically created with real use cases such as Lending, Payment, Insurance, and Privacy... whereas meme coins are usually just for fun.
Additionally, altcoins tend to be more widely accepted and have a higher value than meme coins.
Finally, altcoins are generally more stable than meme coins, which can be very volatile.

These are the key differences between altcoins and meme coins. While both types of digital currencies have their own purpose, it's important to understand the difference before investing in either one.

Popular meme coins

There are a number of meme coins that have popped up in recent years, as the crypto space has become increasingly popular. Some of the most well-known examples include Dogecoin (DOGE), Safemoon (SAFEMOON).

Safemoon (SAFEMOON)

safemoon
SAFEMOON is one of the most popular meme coins back in 2021

SafeMoon, launched on March 8, 2021, is a digital asset and token exchange platform. The project aims to provide a safe, secure, and easy-to-use platform for users to buy and sell digital assets.

SafeMoon is built on the Ethereum blockchain and uses the ERC20 standard. The team behind SafeMoon has developed a unique algorithm that rewards holders of the SafeMoon token (SFM) with a percentage of transaction fees.

This incentive system is designed to encourage users to hold their tokens, which should theoretically increase demand and drive up the price.

The huge gain from SafeMoon was due to the hype from the community in February-March 2022, when Meme Coin was still a trend.

Dogecoin (DOGE)

dogecoin
Dogecoin is strongly supported by Elon Musk

Dogecoin was created by Billy Markus and Jackson Palmer in 2013. It is based on the Doge meme and has a Shiba Inu as its mascot. Dogecoin was started as a joke but quickly grew in popularity.

The coin was meant to be a parody of Bitcoin. However, it quickly gained a following and became a legitimate currency. Dogecoin has a supply of 100 billion coins and uses the Scrypt algorithm.

In 2020, Dogecoin saw a huge surge in price after Elon Musk tweeted about it. This caused the price of Dogecoin to increase by over 800% in a matter of days.

Dogecoin has since become a popular way to tip content creators on social media platforms such as Twitter and Reddit. This was considered the first meme coin for the trend that would follow suit with other coins such as AKITA, ELON & BABYDOGE.

The future of meme coins

It's no secret that meme coins have been on the rise in recent years. With the popularity of Dogecoin, Shiba Inu and other meme-based cryptocurrencies, it's clear that there is a market for these types of assets. But what does the future hold for meme coins?

There are a few factors to consider when trying to predict the future of meme coins.

First, it's important to look at the overall trend of the cryptocurrency market. If Bitcoin and other major cryptocurrencies continue to grow in popularity, it's likely that meme coins will benefit as well. This is because investors are always on the lookout for new and innovative assets to invest in, and meme coins could fit that bill.
Another factor to consider is the evolution of the meme coin market. As more and more investors enter the space, we are likely to see a consolidation of the market. This could lead to fewer, but stronger, meme coins in the future.
Finally, it's also worth considering the impact of regulation on meme coins. If governments crack down on cryptocurrency markets, it's possible that meme coins could be impacted as well. However, it's worth noting that many of these assets are decentralized and thus not subject to direct regulation.

Overall, predicting the future of meme coins is a difficult task. However, by considering all of the factors mentioned above, we can get a better idea of what the future might hold for these assets.

Some notes when investing in meme coins

When it comes to investing in meme coins, there are a few things you should keep in mind.

First and foremost, meme coins are often highly volatile and can lose value quickly. As such, it's important to only invest what you're comfortable losing.
Second, meme coins tend to be more popular with younger investors and as such may be more susceptible to market manipulation. Again, this is something to be aware of before investing any money.
Finally, because meme coins' popularity can drop quickly, meme coins can often be difficult to buy and sell sometimes. This means that you may have to pay higher transaction fees when the trading volume is low.

All that being said, if you're still interested in investing in meme coins, there are a few things you should keep in mind.

First, look for a coin that has a strong community behind it. This will help to ensure that the coin is more likely to retain its value over time.
Second, look for a coin with low transaction fees. This will save you money when buying and selling the coin.
Finally, make sure to do your own research before investing any money. This includes reading up on the coin, its technology, and its team. By doing your due diligence, you can help to ensure that you're making a wise investment.

Conclusion

In general, meme coins can be an easy way to onboard new investors and get them interested in the cryptocurrency space. They can also be a fun way to trade and speculate on the market.

However, it is important to remember that meme coins are often highly volatile and risky investments. Before investing in any crypto asset, always do your own research and consult with a financial advisor.

If you have any questions or comments, please feel free to leave them below.