What is a Memecoin? Origin, popularity and ways to buy them

1. What is a Memecoin?

Memecoins are a unique class of cryptocurrency tokens that are inspired by internet memes, viral trends, celebrities, and animals, making them an accessible and fun entry point into the world of digital assets. Unlike traditional cryptocurrencies like Bitcoin or Ethereum, which are created for specific technological purposes, memecoins often start as "joke" projects or playful nods to internet culture.

While many of these tokens are developed for fun, they can attract significant attention, and some have even become major players in the crypto market. Memecoins are also known for their extremely large or even unlimited supplies, which often keeps their prices low, making them accessible to a wide range of investors.

Due to their speculative and hype-driven nature, memecoins tend to be more volatile than other cryptocurrencies, with their values swinging wildly based on viral trends, community sentiment, and celebrity endorsements.

2. How do Memecoins work?

Most memecoins are created using fungible token standards on established Layer 1 blockchains. Common standards include:

ERC-20 (Ethereum)
SPL (Solana)

These token standards make it easy to launch new cryptocurrencies without requiring significant technical expertise. Memecoins typically focus on community-building and viral growth, rather than technical innovation.

One characteristic shared by many memecoins is their huge token supplies or even unlimited supply caps. For example:

PEPE boasts a supply of hundreds of trillions of tokens.
SHIB has a 1 quadrillion token supply.

There are two main advantages to this approach:

Lower Token Prices: Higher token supplies keep prices low, which makes memecoins more accessible to newcomers compared to other cryptocurrencies.
Microtransactions: Memecoins are ideal for online tipping and small transactions due to their low cost.

However, there are also drawbacks to having massive token supplies, such as token dilution. For instance, Dogecoin (DOGE) has an unlimited supply, with around 5 billion new DOGE entering circulation every year, eroding the value of existing tokens over time.

3. Why do people buy Memecoins?

People are drawn to memecoins for various reasons, including:

Entertainment and Community: Many investors enjoy the fun, meme-driven nature of these coins and the vibrant communities they build.
Speculation: Some see memecoins as high-risk, high-reward investments, hoping to make significant price gains when the next "Dogecoin" or "Shiba Inu" takes off.
Support for Memes and Culture: Others buy into memecoins because they align with the meme's ethos or enjoy the cultural aspect behind the coin.

While some memecoins are bought as a fun way to participate in a viral trend, others are treated as speculative investments, where buyers hope to cash in on future price increases.

4. Popular Memecoins in 2024

4.1 Dogecoin (DOGE)

Launch Year: 2013

Origin: Created by software engineers Billy Markus and Jackson Palmer as a parody of Bitcoin, Dogecoin was inspired by the viral Doge meme featuring a Shiba Inu dog.

Rise to Fame: Despite its humble beginnings, Dogecoin gained a massive following, supported by an active community and endorsements from celebrities like Elon Musk. It has become one of the largest cryptocurrencies by market cap and is used for a variety of charitable causes.

4.2 Shiba Inu (SHIB)

Launch Year: 2020

Origin: Based on the same dog breed as Dogecoin, Shiba Inu was launched as a meme coin on the Ethereum blockchain.

Ecosystem Growth: The Shiba Inu ecosystem has expanded beyond the meme, with a decentralized exchange (ShibaSwap), NFT collections (Shiboshis), and a layer-2 blockchain (Shibarium) to further drive its growth.

4.3 Pepe (PEPE)

Launch Year: 2023

Origin: Based on the popular Pepe the Frog meme, this Ethereum-based memecoin has a supply of over 420 trillion tokens.

Community Support: Despite lacking a clear roadmap, Pepe has attracted significant attention and often ranks within the top 30 cryptocurrencies by market cap.

4.4 Dogwifhat (WIF)

Launch Year: 2023

Origin: Revolving around a Shiba Inu dog wearing a hat, Dogwifhat went viral thanks to its strong social media presence and community-driven growth.

Unique Supply: Unlike other memecoins, Dogwifhat has a relatively low token supply of under 1 billion units, making it stand out in a crowded market.

4.5 Bonk (BONK)

Launch Year: 2022

Origin: Bonk was launched with a community-driven approach, with 50% of its tokens airdropped to Solana ecosystem users.

Evolving Ecosystem: Bonk has rapidly expanded with 130+ integrations, multi-chain support, and features such as staking rewards and a decentralized exchange (DEX).

5. How to Buy Memecoins?

If you're interested in buying memecoins, here's how to get started:

Choose a Platform: You can buy memecoins on major cryptocurrency exchanges like Binance,Bitget, Bybit,... which supports memecoin pairs. For lesser-known coins, you may need to use a decentralized exchange (DEX).
Use the Crypto Wallet: For a seamless experience, use the Wallet to trade on networks like Solana, Ethereum, and others, all from one app.
Get the Token's Contract Address: Always double-check the contract address from the official website to avoid scams. Malicious actors often impersonate popular projects to steal funds.

6. Common Memecoin Scams

As with all cryptocurrencies, it's important to be vigilant when buying memecoins. Here are some common scams:

Pump-and-Dump Schemes: Scammers create a memecoin, promote it aggressively, and inflate its price. Once enough buyers are invested, the scammers sell off their holdings, causing the price to crash.
Rug Pulls: In this scam, a malicious actor creates a token, adds it to a liquidity pool, and then withdraws all the funds once the coin gains popularity, leaving investors with worthless tokens.
Airdrop Scams: Beware of tokens airdropped to your wallet. These could be part of a scam, where you’re tricked into revealing your private keys or confirming malicious transactions.

7. Conclusion

Memecoins represent a fun and highly speculative aspect of the cryptocurrency market. Whether you're drawn to them for their community, humor, or the possibility of high returns, it's important to be aware of the risks involved. Always ensure you're buying memecoins from trusted platforms, and keep an eye out for common scams.

By understanding how memecoins work, staying informed about the latest trends, and exercising caution, you can navigate the world of memecoins with confidence.

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