Meme cryptocurrencies have taken over the world. So, what are they?
What Is It?
Meme coins are cryptocurrencies, which have amassed huge popularity in a short period of time. Their popularity primarily rose as a result of influencers and retail investors promoting them online. The original meme coin is Dogecoin, which was created in 2013 by software engineers Billy Markus and Jackson Palmer, as a joke based on a meme.
Since anybody can create a new cryptocurrency, developers have released a series of meme coins after Dogecoin. Several of these coins are spinoffs of Dogecoin, for example, like the coin Shiba Inu. According to CoinMarketCap, there are over 5,000 meme coins in existence, as of June 28, 2021.
Since meme coins are also cryptocurrencies, is there any difference between both of them? Well, major cryptocurrencies such as Bitcoin and Ethereum were developed to solve real-world problems. The goal of them is to eventually become widely accepted by merchants, thus creating a new form of decentralized currency and revolutionising a variety of industries. However, meme coins serve no real-world purpose at the moment, and most of them were created just to make quick money.
In a Reddit post, Markus mentioned that Dogecoin was “created for sillies” and he added, “I threw it together, without any expectation or plan. It took about 3 hours to make.” As a result, Dogecoin doesn’t have the technical development, and it isn’t as secure as bitcoin, writes CNBC.
The Rising Popularity
Some of these meme coins attracted attention because they were promoted by celebrities, and retail investors have pushed up their prices by promoting them heavily on social media, especially Twitter. For example, Elon Musk, the chief of Tesla and SpaceX, has contributed heavily to the price volatility of Dogecoin. The prices of meme cryptocurrency rose sharply on June 2 after he posted a meme that bears a resemblance to his childhood. Also, according to data acquired by Crypto Parrot, a cryptocurrency trading simulator, DOGE was the third most traded cryptocurrency on Binance, which is the largest digital asset exchange, with a volume of $116 billion in May.
Apart from Dogecoin, Baby Doge has also been getting attention from Musk now. The coin was trending on Twitter a couple of weeks ago after Elon Musk tweeted about it. Baby Doge prices jumped by nearly 98% after the tweet. Since meme coins take only a couple of hours to create, and one coin might become valuable at any given time under the right circumstances, this ‘meme coin’ trend might continue for a while. So, we might see the birth of more meme coins in the future as well.
In The End
Meme coins are becoming popular as they are a quick way to make loads of money, but that doesn’t mean they don’t come with any risk. Cryptocurrencies are highly volatile and speculative, and nobody knows how it will perform in the future. So, investors have to be careful while buying these coins, and it is important that you buy them only after conducting a thorough research so that you don’t fall prey to any scams.
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