What are meme-coins? Are they worth investing in?

If you find the word “meme” in the dictionary, it is a humorous image, video or fragment of text that is copied, usually with slight modifications, and quickly distributed by Internet users. Meme coins are not too different from the dictionary definition of a meme – cryptocurrencies inspired by memes and Internet jokes.

Are meme coins worth investing in? Although some are among the best cryptocurrencies by market value, potential buyers should be aware that most meme-coins offer little value and some are outright scams.

What are meme coins?
Meme coins or meme-coins are cryptocurrencies that were created as a lighthearted joke. Nevertheless, some meme coins have skyrocketed in value, acquired multibillion-dollar market capitals and gained celebrity endorsements. While these characteristics suggest that meme coins offer some kind of underlying utility or value, the truth is that almost all of them have nothing resembling fundamental value or unique use cases.

Instead, cryptoinvestors often buy meme coins to be part of a community or for fun. The only use case for most meme coins is pure speculation.

“Meme coins are structured just like any other cryptocurrency, like Bitcoin or Ethereum,” says Brian Hernandez, co-founder of trading and investment platform Structure.fi. “The difference is that their existence tends to center around a viral moment or a funny idea, and their value depends heavily on what kind of momentum that concept can generate.”

The original meme coin: Dogecoin
The original and most famous meme coin is Dogecoin (DOGE). Here are some interesting facts about this meme coin, and you can learn more about the creation and how it works here .

According to the founders, they created Dogecoin to make fun of Bitcoin (BTC). The name “doge” is an intentional misspelling of the word “dog,” and the founders admit that they chose the name to make the cryptocurrency “as ridiculous as possible.” However, what has become a hallmark of other subsequent meme-coins, Dogecoin began to make a name for itself thanks to an active and engaged user community, acquiring in some ways a cult status.

For example, when the Jamaican bobsled team qualified for the 2014 Winter Olympics in Sochi, but was unable to fund the trip, the Dogecoin community banded together to raise about $30,000 for the cause. The story was picked up by the mainstream media, which helped attract new investors and influence.

But it wasn’t until celebrities started supporting Dogecoin that its price skyrocketed. The most famous supporter of the coin is Tesla CEO Elon Musk. The enigmatic billionaire is constantly promoting Dogecoin. Musk even appeared in a “Saturday Night Live” sketch where he called himself the “father of Dogecoin.”

At its peak, Musk’s support led to Dogecoin reaching a market value of $88 billion in May 2021 and becoming a pop culture phenomenon. However, when the celebrity endorsement disappears, such cryptocurrencies could collapse. Today, the market value of Dogecoin is only a tenth of its all-time high of more than a year ago.

Other popular meme coins
Dogecoin continues to be a source of inspiration for meme coins. More than 200 such coins have been created since the original meme coin was released.

Shiba Inu (SHIB) was launched two years ago as the “Dogecoin killer.” The cryptocurrency even mimics Dogecoin branding by using the same Shiba dog. SHIB has also experienced meteoric growth, reaching a market value of $41 billion in October 2021. You can read more about the formation of one of the most interesting meme coins here.

Numerous other meme coins were created in hopes of building their own communities and skyrocketing, but this year prices throughout the market have come back to earth, and meme coins have suffered the most. Dogecoin is down 60% in 2022 and Shiba Inu is down 64%, while many of the smaller meme coins have fallen to zero and been abandoned.

How do meme coins work?
For meme coins, the barriers to entry are extremely low. The open-source blockchain technology behind these cryptocurrencies means that creators can simply “fork” existing cryptocurrencies – essentially copy and paste the underlying blockchain – and launch them online, while changing something minimal, like the name or logo.