Memecoin is actually not new, it has just existed in different forms or types in the past. Bitcoin was launched in 2009 and operated as the only cryptocurrency for the first few years.
After Bitcoin’s price soared and survived for several years, early adopters and programmers began experimenting with building on top of Bitcoin. If someone can build a digital/crypto asset, what else can we build?
The cat is essentially out of the bag. Bitcoin is open source software, so anyone can access the code and even suggest edits. However, consensus rules encourage more people to avoid making unwarranted changes because others must agree to the changes.
The first alternative coin (altcoin) created after Bitcoin was called Namecoin, which was created in 2011. Litecoin followed in the same year. Both were proof-of-work (POW) coins, like Bitcoin. Peercoin was created in 2012 and was the first to use POW and POS (Proof of Stake) consensus mechanisms (mining).
Most of these early altcoins functioned more like Bitcoin in most senses, including as payment mechanisms and stores of value. They differed in areas such as transaction speed, some were privacy coins, different mining algorithms and distribution mechanisms.
The first meme coin
Dogecoin can be credited with being the first major successful memecoin. It was created in 2013 and was not intended to be like Bitcoin, but was initially created with the intention of parodying Bitcoin as a joke. While others promised to revolutionize the world, the Governor tried to have fun. The logo is based on the famous Japanese dog Shiba Inu meme. Since then, thousands of others have been created to replicate Dogecoin’s success. Shiba Inu coins were also made later.
It was after the second Bitcoin halving in 2016 that altcoins and eventually meme coins began to gain popularity. Even as Bitcoin soared to an all-time high of $20,000 in December 2017, many alternative cryptocurrencies created during that era, including Ethereum, Ripple (XRP), and Litecoin, have seen massive price fluctuations. As more cryptocurrencies were created, ICOs (initial coin offerings) also increased rapidly.
DeFi and NFTs
The growth of decentralized finance and NFT (Non-Fungible Tokens) has also led to the explosive growth of MEMCOIN. This is believed to be the time when memecoins truly became mainstream in the cryptocurrency world. CryptoKitties is the first popular NFT released in 2017. This is a game where players can buy, breed, and trade their own virtual cats. The market was relatively quiet until 2021, when NBA Top Shot was created and became popular. This opens the window for NFTs to be considered a way to own digital art. from then Meme NFTs Thousands of NFTs like Rare Pepes and Nikamigos have exploded. For Defi, Memecoins has created a way for projects to reward users through staking, yield farming, and providing liquidity.
But what is a memecoin?
Memecoin can be defined as a cryptocurrency that imitates or creates value around internet memes, pop culture, or viral trends. They leverage or preempt popular trends to gain popularity. For example, Elon Musk is a famous entrepreneur with an active online presence. Several memecoins have been created in his name. In April 2023, a memecoin called $Musk was created. It builds on the popularity of Elon Musk, a popular figure who also shares memes online. Other known memecoins include PePe, Shiba Inu, Dogecoin, MAGA, etc. You can check out some of the most popular ones: CoinMarketCap.
Most memecoin creators and early adopters know that it is mostly for fun and experimentation. As popularity increases, it can usually achieve 1000X price swings in a short period of time. However, most are still risky investments because they are generally risky. rug pulls Or pump and dump method. Some do not have valid token economics and are most likely to die due to little or no utility. Like other internet memes, they can grow in popularity very quickly and fade out just as quickly, making them a volatile investment. However, some are widely adopted and have been around for many years. It has become a part of internet culture, largely thanks to the community that grows around the coin. In this regard, it is important for all investors to know and understand the dynamics behind memecoins in order to make informed decisions.
Do your research
As an investor, it is important to distinguish between memecoins and mainstream cryptocurrency assets such as Bitcoin and Ethereum. Top-ranked coins typically have utility, have an audited code base, have millions of users, and have specific use cases. However, because the price changes are not as fast as memcoin, memcoin is not attractive. For example, Bitcoin rose 60% in April 2024 alone. While this is impressive compared to traditional assets, it pales in comparison to memecoins like MAGA (TRUMP), which surged 800% in less than 30 days from its low in early 2024. From $0.11 to an all-time high of $11.15. It has soared 33,000% since launch. It is currently trading at around $5 as of April 2024.
If you search anywhere online, you’re likely to see headlines like ‘Top’.10 meme coins that will explode in 2024‘ and other similar predictions. Since there are literally thousands of memecoins, it is really difficult to know which one will explode. However, various analysts try to make predictions all the time. Most are traders or insiders. The best way to utilize Memecoin is to make sure you are active on various online forums such as Reddit and Telegram. Most communities on these platforms post predictions, analysis, and announcements about these top and new memecoins. It is also important to be aware of and participate in internet meme culture and trends.
Moreover, it is important to understand the narrative driving the memecoin boom. For example, most coin analysts say that artificial intelligence (AI) coins are likely to do well in this bull market. This is similar to the 2017 ICO. Nonetheless, any memecoin can literally appear out of nowhere, gain mainstream attention, and go viral.
In conclusion, it is always important to understand that memecoin is a highly volatile but potentially profitable investment option.
As we have seen in this article, memecoins as a concept are not really new, but they are continuing to evolve in the cryptocurrency landscape. From altcoins, POW coins very similar to Bitcoin, to the rise of Ethereum and ERC-20 coins, to Defi and NFTs, there have always been trends that mostly follow bull cycles like the one we are currently experiencing. Regardless of the type of memecoin, the important thing is that it needs a trend, a growing community, and a narrative to drive the hype to keep growing. If you’re into that momentum, ride it.
It is always recommended to diversify your investments in cryptocurrency. This means having a portfolio of highly proven digital assets such as Bitcoin, Ethereum, Solana, and XRP, as well as a portfolio of highly volatile but potentially profitable assets such as memecoins. The cryptocurrency industry will always be tribal and people will try to defend their coins. While others are maximalists and say that Bitcoin is the only true cryptocurrency and should be the only cryptocurrency in your portfolio. The fact is that the cryptocurrency landscape is always growing. There are always new opportunities and challenges for investors while navigating the cryptocurrency landscape. For example, most newly minted memecoins are not discovered on mainstream exchanges until they gain meaningful traction. Therefore, as a cryptocurrency investor, you need to know where to get them from various wallets like MetaMask, which poses security concerns even for seasoned investors.
Always protect your coins. Store in a reputable wallet, keep your long-term coins safe in a decentralized non-custodial wallet, and HODL – embrace uncertainty. -WGMI