A memecoin is like a funny cryptocurrency, often featuring memes, that people on the internet really like. But, even though they’re fun, they can be really risky to invest in and might not be worth much.
Examples like Dogecoin and Shiba Inu fall into this group. They’re more for entertainment than for actually buying things. So, if you want to buy or trade meme coins, it’s important to know that they can be really unpredictable and you might lose money. Be careful!
What Is a MemeCoin?
Meme coins are a type of cryptocurrency that’s a bit different. They’re known for having a really excited online community that supports the growth of the currency. Sometimes, they’re associated with funny animated characters or animal memes. During the recent cryptocurrency boom, two popular meme coins were Dogecoin and Shiba Inu. But there are also lesser-known ones like Baby Doge and Dogelon Mars, which, while not as famous, still have very high values in the hundreds of millions.
Meme coins, like other cryptocurrencies, use something called blockchain technology. It’s like a special kind of computer system that keeps track of virtual things, including cryptocurrencies and non-fungible tokens (NFTs).
One important thing to know is that most meme coins are mainly used for trading. They’re not like Ethereum or other cryptocurrencies that have special uses on their own blockchains. The big cryptocurrencies like Bitcoin, Ethereum, USD Coin, XRP, Cardano, Solana, Polygon, and Polkadot, aren’t considered meme coins.
MemeCoins Have High Volatility
CoinMarketCap, a cryptocurrency website, has a section called “Meme Coin” where they list over 300 different cryptocurrencies. But here’s the thing: many of them aren’t really actively traded and are essentially worthless. Out of all these meme coins, only Dogecoin, Shiba Inu, Dogelon Mars, and Baby Dogecoin have more than $1 million in trading happening every day.
It’s important to know that all of these meme coins, including the popular ones, are generally seen as risky and can have wild price swings.
Now, here’s something interesting: While you need a cryptocurrency called Ether to do things on the Ethereum blockchain, most meme coins don’t have any extra purpose beyond being collected and traded.
And one more thing to note is that some meme coins are not actually coins but tokens that run on a different blockchain. For example, Shiba Inu is an ERC-20 token that operates on the Ethereum blockchain.
There’s a bit of a controversy around meme coins. Some people in the media and the investing world think of them as complicated schemes to inflate prices and then quickly sell off, which is called a “pump-and-dump.” This should make investors really cautious when considering meme coins. If you’re thinking about getting into these markets, be extremely careful!
Pros & Cons of MemeCoins
|Fun asset type to use to learn about cryptocurrency and blockchain technology||High risk and volatility|
|Possibility of earning a profit when values rise||Accusations of being a pump-and-dump scam|
|Potential participation in an active investing and trading community||May be technologically complex for some users|
How to buy memecoins?
You can purchase meme coins through a cryptocurrency exchange. There are two main types of exchanges: centralized and decentralized.
- Centralized Exchanges: Examples include Coinbase, Gemini, Binance, FTX, and Kraken. These platforms allow you to buy and sell meme coins directly with other users within their online marketplaces. It’s a straightforward way to trade cryptocurrencies, and the exchange manages the custody of your coins.
- Decentralized Exchanges: One popular example is PancakeSwap. To use these exchanges, you’ll need a cryptocurrency wallet that allows you to hold and manage your coins outside of the exchange. Decentralized exchanges operate on blockchain technology and offer more control and privacy to users.
So, you have options when it comes to buying meme coins: centralized exchanges for convenience and decentralized exchanges for greater control over your assets.
How to create memecoins?
Creating a cryptocurrency is technically feasible for anyone with the necessary technical knowledge, but transforming that cryptocurrency into a popular meme coin is an exceptionally challenging task. In fact, it has only been accomplished successfully on a few occasions, with just a handful of meme coins gaining widespread recognition and popularity.
What are the most popular memecoins?
Based on CoinMarketCap, the leading meme coins by market capitalization are Dogecoin, Shiba Inu, Baby Doge Coin, and Dogelon Mars. Additionally, there are several other meme coins such as Shiba Floki Inu, Doge Killer, Kishu Inu, Samoyedcoin, Shiba Predator, and numerous more in this category. These coins often gain attention due to their association with popular internet memes and trends.
The Bottom Line
Meme coins are an interesting cryptocurrency asset, but they come with many risks for losses. For most investors, it’s best to avoid putting in more than you can afford to lose. But there’s a very small chance that if you pick the next big coin before online fans send it “to the moon,” you could become the next crypto millionaire. When it comes to risky meme coins, it’s best to proceed with caution.