meme coins: Looking beyond the joke: Underlying fundamentals of meme coins

It’s a dog-eat-dog world out there! Inflation is on the rise, war is at its peak, and cryptocurrency is the new and improved stock market. And now, we have a war of the dogs – some say 2021 is considered the year of the dogs because of the legendary battle between meme coin rivals Dogecoin (DOGE) and Shiba Inu (SHIB). It will not be faulty to say that meme coins seem a volatile investment compared to Bitcoin or Ether. If 2021 has been any indicator of the rise of meme coins, then 2022 is predicted to bring an era of meme coins being used as transactions for services.

Essentially, meme coins are cryptocurrencies inspired by jokes or memes as we so like to call them. The first meme coin was the Dogecoin, originally launched as a parody of the Shiba Inu dog. Now, the challenge lies in changing perception, or rather have something as amusing as a meme to be considered an amicable investment. Cryptocurrencies are influenced by community-driven investors and social media trends, and therefore, it is significant to have audiences understand the fundamentals of meme coins.

One key characteristic of meme coins is their unlimited supply. As of today, the market notes a total supply of 1 quadrillion tokens for Shiba Inu, and over 100 billion tokens in circulation for DOGE (basically no maximum supply). Interestingly, one can buy an ample amount of meme coin tokens by investing just USD 1, which can explain their relatively low prices, and why they seem to be an affordable investment compared to other cryptocurrencies.

To summarise:

  • Meme coins are highly volatile due to their dependence on community circles and social media trends.
  • An uncapped supply of meme coins in the market can make them an affordable investment.

Now, let us move on to the fundamental difference between meme stock and meme coin. Even if say a meme stock’s market prices shoot to the moon, the business organisation associated with the same does not grow in value. However, with meme coins, the fundamental value of the coin seems to skyrocket with its price. Say you buy a million tokens of Dogecoin for USD 1 today – in another 6-8 months you could trade the tokens off for USD 8,000, bringing in a massive profit.

The technology behind meme coins

Most people are familiar with the creation of cryptocurrencies – digital currencies operated using blockchain technology, which is a decentralised digital ledger that maintains transactional records. Even though meme coins have a more light-hearted origin, they function pretty similarly in terms of technology. Like other cryptocurrencies such as Bitcoin or Ether, meme coins can be created through a process called mining. For instance, Dogecoin is mined by individuals or groups dabbling in complex algebraic and mathematical formulas. Popular meme coins such as Dogelon Mars (ELON), Akita Inu (AKITA), Samoyedcoin (SAMO), Kishu Inu (KISHU), SafeMoon (SAFEMOON), etc. are safer options since the community holds faith in them and they match the market sentiment. Additionally, meme coins built on blockchains holding smart contracts like Solana or Ethereum are much preferred among cryptocurrency audiences.

In late 2021, GME pumped up the prices of their shares by as much as 100x, and in response, a Reddit group joked about matching the cost of DOGE to create a crypto equivalent of GME. Well, the trend caught on and Dogecoin reached an all-time high of $ 0.73 USD, with a 2,000% rise in five days. Barring the authenticity of the technology behind meme coins, and their tendency to be involved in pull rug scams (when the development team sells off the entirety of their stock by upping the prices), it is important to stress on the effect the community has on these coins. Plus, with celebrities like Elon Musk, Snoop Dogg, Cristiano Ronaldo, Logan Paul, Gene Simmons, Mark Cuban and more, cryptocurrencies are being given more preference and importance these days.

This news is republished from another source. You can check the original article here.

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