As of 2021, around 106 million people around the world use cryptocurrencies. The meme token is the latest crypto craze with many investors trying to find the next big winner.
But is the risk worth the reward with a meme coin? How can you tell the difference between top meme coins and flops?
The following guide will explore what a meme coin is and how they gain momentum. Read on and learn how they work before purchasing new meme coins.
What Is a Meme Coin?
Currencies such as the Doge meme coin often start as meme-based jokes before gaining followers. Meme coins have the potential to go mainstream if they gain enough followers.
Dogecoin got influenced by a meme made from a viral photo of a Shiba Inu dog. Today, there’s even a Shiba Inu coin all of its own. Check out the latest Shiba Inu coin price for an example of a newly emerging meme coin.
Meme coins often spike in value after gaining popularity. In fact, retail investors tend to jump in and raise the price higher in some cases.
Different online influencers and celebrities can also boost the popularity of certain meme-based coins. Elon Musk is a notable example because of his shoutouts to Dogecoin in the past.
Meme Coin Origins
Meme coins have been popularized for a couple of years, but many trace their exact origins to late 2020. It was then that the Reddit community WallStreetBets greatly pumped the value of the GME stock.
After that, a different group of Redditors joked about inflating the price of Dogecoin the same way. The trend caught on with Doge and the rest is history.
Meme Token vs Meme Coin
A meme coin is usually linked to a blockchain. They’re typically used for trading currency and storing value.
A meme token usually relies on the use of another coin’s blockchain. For example, Ethereum is a blockchain and Ether is its native coin. although, several tokens like Loopring use the Ethereum blockchain.
Tokens can potentially become coins if the project forms its own blockchain. Then they would move their tokens to the newly formed blockchain as a coin.
Are They Worth the Risk?
The success of meme coins depends on community involvement and unpredictable outside influences. The value of meme coins is extremely volatile. They can shoot up to the moon or crash completely very fast.
Most meme coins aren’t backed by trusted technology the way Bitcoin is. Many don’t have the support of established ecosystems either. However, some meme coins like Dogecoin and Shiba Inu use tested blockchains.
Meme coins typically have a hard time getting accepted and remain valueless. But Doge and Shiba recently got accepted as forms of payment on different platforms. So, the success of meme coins is very hit and miss.
Understanding Meme Coins
Now you know that when it comes to a meme token or coin it’s really a popularity contest. Although, meme coins that run on trusted blockchains stand a better chance.
Invest with caution and remember this guide before making any meme coin decisions. Check out the rest of the site for more fascinating crypt information and other great topics.