What is a meme coin?
With the cryptocoins like Floki and Shiba Inu gaining momentum, we’ve demystified exactly what a meme coin is.
Right, so you have memes down and you understand what crypto coins are. You might have heard of Dogecoin, SafeMoon, or even Shiba Inu. You might even know that they’re called meme coins. But how does a meme coin work? Are they memes, coins or memes about coins?
Well, all of the above… kind of. They’re memes that are also coins (or tokens, which are crypto assets that you can buy with coins, like virtual precious stones). Basically, they’re a category of cryptocurrencies and tokens that are made as a result of a joke, generally derived from the internet.
Like most online jokes, things move fast in the meme coin world, thanks to the fact that nobody really cares about anything they see on social media for longer than a few minutes. This means that coins have to be developed fairly promptly to even land as a meme coin, as opposed to just being another random coin.
In the past, you basically had to be a developer to make a new cryptocoin. Now, there’s pretty easy-to-use software that does the major lifting for you. This is how the coins are churned out rapidly, but it also means they have minimal (if any) features and generally exist to serve no purpose other than being a coin that is a meme. That being said, some of them do have a few purposes, like earning dividends and you can use dogecoin on BitPay, a Mastercard-backed card that allows you to spend Crypto wherever Mastercard is accepted. There’s also a chance Tesla will accept payment in dogecoin soon.
So how valuable could memecoins become?
It’s difficult to say. Like with most crypto investments, you have to approach it on a case-by-case basis. What’s important to know is that almost all of the value is generated via hype. Whether something will ever land like dogecoin again is hard to predict, but it’s helpful to understand its rise.
Dogecoin is the biggest and original meme coin, sort of like how bitcoin is the original and most valuable cryptocurrency at the moment. At the time of writing, dogecoin (DOGE) is worth $0.27 and it reached an all-time high of $0.74 back in May 2021. While it is the OG meme coin, these stats make it pretty incomparable with other meme coins, which technically could be considered alt meme coins in the same way that bitcoin and ether are really a league of their own, compared with alt coins. For a direct comparison, SafeMoon (another meme coin that has already rocketed once) is currently worth $0.00000508.
How the hell do you make money off something worth less than a quid?
The coins rise in value, of course, but they also increase in volume. Something quite meme‑y about these coins is the absurd numbers involved. Take Shiba Inu (a meme coin that’s still in the more formative state), for example: £9 gets you 195,363.67310600 SHIB at the time of writing. Jokes, innit.
It’s pretty accessible, meaning a lot of people can basically buy as much of it as they want. This means there can be huge demand and, by extension, huge rises in value.
If you bought a quid of dogecoin in 2013, when it first launched, it would have been worth $0.000227. Now, that dogecoin is worth around $0.26. The value has increased by 114437 per cent, so that humble quid would now be worth a phat £1144. Pretty cool, sure, but it gets even more eye-watering quickly: £1000 would now be worth £1.14 million. That’s how you can, in theory, make money from it.
Does this mean meme coins are going to get you rich?
Nope. They can but that doesn’t mean they will. Realistically, most meme coins flop. But if you did put a couple of quid on a meme coin or token that skyrockets, then it can earn you a tonne of money. Examples of that happening have included Dogecoin, SafeMoon and Shiba Inu, among others.
Which meme coins are currently doing well?
Very recently, hype had been building within the crypto world about a very small Squid Game-inspired crypto doing well, but it turned out to be a scam and the creators have pocketed a juicy two million dollars. While not really a meme coin, it has followed the same path as meme coins and their meteoric rises, so it’s a good cautionary tale. Meme coins can come up in an instant, be wary before you get into one.
Anyway, Shiba Inu is an example of a legit coin that’s doing well. It rose a mental 60 million per cent over the last year to hit an all-time high. It’s come down pretty steep from there, but still has unimaginable gains relative to where it started.
Another smaller coin that’s getting a lot of traction online at the moment is Floki. At the time of writing, it’s up 20.8 per cent in the last 24 hours. Floki Inu is inspired by Elon Musk’s actual Shiba Inu, Floki Frunkpuppy, and markets itself as “the only crypto project officially partnered with the #DogeFather’s brother Kimbal Musk’s Million Gardens Movement… with whom we are working together to tackle food insecurity in the world.” Translation: the coin has partnered with a movement created by Elon Musk’s actual brother Kimbal that helps people learn to garden for themselves. Sweet.
But just because it’s doing well now, that doesn’t mean its trajectory is set in stone. This isn’t financial advice, remember! You need to do your own research before dropping some real-life coin on any cryptocurrency. Consider this your introduction to meme coins.