Discovering the underlying economic worth of a digital asset, particularly a cryptocurrency, presents a significant challenge within the realm of finance. The latest phenomenon of meme-coins has added another layer of complication to this situation. Many investors believe that the restricted quantity of Bitcoin contributes to the currency’s overall worth.
Because of a strict limit placed on the production of new bitcoins, there will never be more than 21 million of them. On the other hand, Ethereum (ETH) retains its value thanks to the development of Smart Contracts and the widespread use of Ethereum-based applications that make use of the cryptocurrency.
Read more: How do you convert crypto to fiat?
What is a cryptocurrency, & how does one come into possession of meme coins?
Any kind of money that exists digitally or electronically and makes use of cryptography to safeguard transactions is referred to as cryptocurrency. The terms “cryptocurrency” and “crypto” are often used interchangeably. The recording of transactions and the distribution of new units is handled by a decentralized network in cryptocurrencies, as opposed to a centralized authority as is the case with traditional currencies.
Meme coins are a kind of cryptocurrency that is based on memes, which are intriguing or hilarious concepts that are shown in pictures, videos, or other forms of media. As its name suggests, meme coins were created from these ideas. The Dogecoin cryptocurrency and the Shiba Inu dog breed are two of the more well-known and popular examples. Meme coins function in the same way as other cryptocurrencies, making full use of the blockchain and the technology that is associated to it.
To make sure that your investment in meme currencies is secure, you should make sure that the liquidity pools are connected to burn addresses, that the project has been audited by a third party, and that you steer clear of coins where a single company holds more than 5 percent of the entire supply. Because of the way they’re created, the value of meme coins may fluctuate wildly from moment to moment. This is one of the reasons why this happens.
Read more: Which Cryptocurrency Will Succeed Bitcoin?
Meme coins, in contrast to fiat currencies and most cryptocurrencies, often have an unbounded supply. This means that there is no upper limit on the number of meme coins that may ever be created. In this assertion, the value of every given meme currency is mostly decided by the extent to which it has spread virally. The value of Dogecoin shot through the roof after endorsements from Elon Musk and Mark Cuban. But as soon as the excitement went down, it dropped just as rapidly.
In this article, we will be discussing the top five meme currencies that are fundamentally altering the narratives around cryptocurrency investing.
Dogecoin Ticker: DOGE
Dogecoin was developed in 2013 by software programmers Billy Markus and Jackson Palmer with the intention of making fun of other alternative currencies that aimed to undermine Bitcoin’s preeminent position in the cryptocurrency market. For the network to establish a consensus, the digital asset utilizes a method known as proof-of-work. Since it utilizes crypt technology, this Proof of Work algorithm is not the same as the one used by Bitcoin’s SHA-256.
Currently, there is no predetermined maximum supply of DOGE, which is Dogecoin’s native token. Since the block period is just one minute, miners were able to create more than 10,000 new DOGE coins every minute, which resulted in all 100 billion coins being mined in 2015. Following this, the community concluded that around 5 billion coins should be issued each year.
What caused the price to skyrocket?
Despite having a circulating supply of more than 130 billion, Dogecoin crypto is currently trading at a price of $0.50 at the time of this writing. Elon Musk has shown his unwavering support for the DOGE cryptocurrency on many occasions, first via the Memes platform and then by allowing DOGE to be used as a payment option in Space X. DOGE has been the entrance point of choice for new users into the cryptocurrency space.
When compared to the quantity of coins that are minted daily, it is challenging to maintain a consistent pricing. On top of that, the DOGE token is not essentially employed by any major crypto project, which is another negative point. The price has moved into a bubble zone, and any future gain is very speculative since it has already reached this point. The tales of those that come out on top are the ones that are told to the rest of the world. Think again and make smart investments!
Shiba Inu Ticker: SHIB
Shiba Inu is a cryptocurrency that is widely viewed as a potential rival to Dogecoin. It is an “experiment in decentralized spontaneous community development.” The team that is working on Shiba Inu is also attempting to develop a complete suite of goods, which will include a decentralized exchange, an ecosystem consisting of a small number of tokens, and a community that is fully functional.
The Shiba Inu community uses the letter SHIB as their token. In recent times, the value of this ERC-20 currency, which takes the name of the Shiba Inu dog breed as its ticker, has skyrocketed in response to the popularity of Dogecoin. The total number of tokens available is just one quadrillion. Uniswap is guaranteed access to the remaining fifty percent of this amount as liquidity, while Ethereum co-founder VitalikButerin keeps the other fifty percent for himself. The Shiba Inu ecosystem includes not only the SHIB token but also the LEASH and BONE tokens, in addition to the SHIB token.
The supply of SHIB tokens is likewise unsustainable, much as that of Dogecoin. Despite this, half of it has been sent to Vitalikto remove them from the supply that is now in circulation. Therefore, whether the creator of Ethereum decides to sell them in the future will have a significant impact on the value of these tokens in the future.
SafeMoon Ticker: SafeMoon
SafeMoon is a DeFi token that was distributed on the Binance Smart Chain and was introduced by John Karony in March 2021. The project is entirely led by its community (at least in theory), and it places an emphasis on fixed reward functions and locked liquidity. SafeMoon’s native tokens, which are called SAFEMOON, is discouraged by the SafeMoon protocol, which is a distinctive characteristic SafeMoon integrates.
What caused the price to skyrocket?
There is a total supply of 1 billion trillion SAFEMOON cryptocurrency, with approximately all that supply now in circulation. Traders are required to pay a 10 percent charge when they sell their tokens, and of that cost, 5 percent is returned to the token holders. This creates the appearance of a Ponzi scheme, which is not a good thing for this project.
Although Benzinga and Lark Davis have classified price of SafeMoon crypto as a Ponzi scheme, WarOnRugs wants investors to be aware of the possibility that the company’s developers are trying to pull a fast one on them. On the other hand, even though it has only been around for two months, the site has already attracted more than 2 million members and has offered exponential returns on investments.
Read more: What is Decentralized Finance (DeFi)?
Anyone who is thinking about adding SAFEMOON cryptocurrency to their portfolio should have a plan to protect themselves from any prospective rug scams.
Hoge Finance Ticker: HOGE
The combination of crop farming and the world of memes is what makes this cryptocurrency a “DeFi sibling” of Dogecoin, as the name indicates. The purpose of the project is to make use of the functionality offered by Ethereum’s DeFi architecture.
The Hoge Finance meme token, HOGE, has a supply cap of one trillion and can only ever be issued in that amount. Because the token uses a deflationary supply mechanism, the total quantity will gradually decline over the course of its lifetime.
Even though HOGE is very new to the cryptocurrency market and has not yet garnered much attention, the fact that it has a real-world market use case elevates it beyond meme currencies that lack any fundamentals. The project is in its infancy at this point, and its potential may become apparent soon.
MonaCoin Ticker: MONA
MonaCoin is a meme that originated on the internet in 2013, and it is based on a figure that resembles a cat. It was established by an anonymous developer named Mr. Watanabe, who has not been identified to this day.
The token, which is called MONA, promotes itself as the first Japanese digital asset that is also utilized at several shops that are both online and offline in Japan. The fact that the token has a supply cap of 105 million units fully sets it apart from the many other meme tokens that we covered in this article. In addition, the Japan Financial Service Agency has given its stamp of approval to the coin.
Even though MONA is a meme currency, it is distinguishable from other meme currencies in several ways, including its pricing, its real-world use case, and the regulatory advantages it offers.
Distinguishing Properties of meme coins compared to standard cryptocurrencies
- Meme coins are not intended to function as any kind of utility token; rather, their primary purpose is to be exchanged.
- Meme coins are very susceptible to market forces that may cause their value to drastically shift in a very short amount of time.
- The quantity of meme coins is often not limited.
- The value of meme coins is determined by the amount of attention currently being paid to the token.
- The value of a single token in a meme currency is often quite low.
The Bottom Line
We are inching our way toward an economy in which value is determined by the community, and it seems that the meme currencies are moving in the same direction. Although this seems to be beneficial in the short-term owing to profits that have never been seen before, we need to be aware of the possibility that, in the long run, individuals may incur financial losses. Most of the time, price increases in the cryptocurrency markets are caused by trends. The expansion of DOGE, SHIB, and SAFEMOON is an actual trend. Nevertheless, only time will tell whether it is sustainable.
Having said that, considering how low-cost they typically are, you may still get a respectable quantity with a very little financial outlay. You should be aware, however, that the return on investment that you can generally anticipate is just a few dollars. No matter what you choose to accomplish, you should never put out more money than you can stand to waste.