June 1, 2023
Understanding Memecoins: A Beginner's Guide
Dogecoin. Shiba Inu. Pepe… you can probably feel where this is going.
Today we’re going to talk about memecoins! What in the blue heck is going on with them, why are they getting so popular, and what is their ultimate goal. Put your serious thinker cap on, because today we are going to analyze the everliving crap out of the aforementioned tokens.
Just kidding, we’re going to talk about cryptocurrency based on memes and try to predict the next big thing in the memecoin market. Ready or not, here we come, you can’t hide!
DOGE, The Curtain Raiser and Memecoin Trailblazer
We must go back ten years in time to start our retrospective analysis.
2013 is the year many consider the starting point of the memecoin ‘revolution’, as the image of Shiba Inu aka Doge has burst onto the crypto scene. It will be hard to find an extremely online person that didn’t see that meme at least once during their web surfing tenure. Mind you, the meme itself gained traction in early 2010, according to a reputable knowyourmeme source.
So why was Doge shoved into crypto? Very simple. It was made by Billy Markus and Jackson Palmer as a joke - exclusively for ‘kicks and wriggles’. It is really that simple.
In the industry mainly orchestrated by progressive intellectuals, Dogecoin emerged as the symbol of self-irony and harmless banter. The sheer cuteness of the japanese doggie and its miniscule price has turned the token into an attractive asset, plus something familiar in the often intimidating space of complicated tokenomics and rambunctious exchanges.
$DOGE exploded in popularity during the Bitcoin bubble in 2016 and went down again in 2018. In May 2021, it surged to an all-time high of around $0.74, boasting a market cap of over $80 billion at its peak. Much cute, such capitalization, wow!
These days the OG memecoin proudly sits in the top 10 crypto charts and is often referred to as Elon Musk’s favorite crypto. One day he’s pedaling it ‘to the moon’, the other he throws it away like a toy out of the pram. Sadly, he’s not doing it for a laugh.
Dogecoin’s fame has spawned a bunch of other dog memecoins, one of which is Shiba Inu.
Enter Shiba Inu - Another Memecoin The Noobies Are Into
You thought one shiba inu was enough? Not for crypto people, apparently.
SHIB is a descendent of the Shiba Inu tribe that was created in 2020. Unlike its predecessor, it is painfully obvious that this memecoin was bred to capitalize on the popularity of the trailblazer.
Let’s say you have ‘missed the hype train’ of Dogecoin but you still want to become a crypto millionaire. What do you do? You are looking for something similar that hasn’t ‘left the station yet’.
There was palpable demand for another dog in crypto, and so the new pup was minted to please the masses. Shiba Inu has gained significant attention, peaked in price and did what every respectable memecoin would do - dropped 90% just because the cycle is over.
You may think that Shiba Inu is a joke that has worn out its welcome, and you would be only halfway right, because it has actual utility! There’s a Shiba Wings cafe at the Gold Coast in Australia, where you can buy food and drinks using SHIB. Because reasons.
Having two dog coins in your portfolio is probably ‘pushing it’, but dogs are pack animals. They need companionship, a buddy to hang out with while you’re sweating off at work.
Do not put them in the same wallet with the Nyancoin though!
It’s Raining Cats and Dogs… and Frogs?
Back to the present time. Let’s give some spotlight to a new memecoin, the one and only, Pepe.
Pepe is an anthropomorphic frog character that amassed cult status on the infamous message board called 4chan. First steps of Pepe can be traced back to the long gone 2005, where he was one of four characters of the comic series Boy's Club.
As in tradition, Pepe had to wait three long years before nailing a joke. One funny joke, and Pepe became a posterfrog for the "Feels Good Man" reaction image and subsequent “Feels Bad Man” meme template. The rest was left to 4chan…
The dastardly frog transcended the pond it was born in, and became a global meme mainstay in the 2010’s. You know you have made it as a meme when Katy Perry and Nicki Minaj post you on their main accounts, and your image is used in 95% of the most disturbing Internet memes.
The only surprising thing about Pepe is its late crossover to the crypto culture. Somehow it has only rocked the blockchain world this year, taking the industry by a storm. Minted on 4/20, it was destined for greatness.
I witnessed this greatness first hand, as there was a literal frog takeover at the Bitcoin 2023 conference I attended and wrote about in my Blockleaders debut. Simply put, Pepe was made for crypto, and crypto was made for Pepe. It’s really a match made in heaven.
As you could see from a mile away, $PEPE creators wanted to compete with other popular memecoins like Dogecoin and Shiba Inu and they put a twist on it.
Pepe is built on the Ethereum blockchain, and people who hold onto the coin get a little bit of money each time someone buys or sells the tokens, incentivizing people to HOLD.
Not that bad of an idea, huh? Now let’s briefly talk about the other side of the memecoins.
All Jokes Aside, Who Has The Last Laugh?
The psychology of all memecoins is awfully simple.
People want just two things in life - bread and circuses. Memecoins satisfy those needs, providing plenty of entertainment and dough. Generally speaking. It only becomes a question of balance, because in this world nobody can have all the money and all the fun.
That’s where we creep into the dark side of the moon: scams, pump and dump schemes, and straight up rug pulls. Those unfortunate events can turn a lot of HODLers sour, and change the sentiment of the coin overnight. You may have encountered the term ‘$#!Tcoin’ before, I suppose. There’s a bit of a difference between these two words:
As you see, memecoins are harmless and fun, so you should definitely go all in.
But if we get serious for a second, a lot of tokens are finding themselves somewhere in the middle of the spectrum, and all it takes to go from the first row to the second is one step.
Investing in meme coins, like any other cryptocurrency, entails inherent risks, but meme coins have their own distinct set of rewards and vulnerabilities. The value of meme coins is highly volatile, primarily influenced by word of mouth and driven by celebrities or short-lived trends.
Due to the rapidly changing nature of the internet, such value surges drastically. Since memecoins rely on word of mouth rather than scarcity to appreciate in value, there is a possibility for them to become completely worthless in the long run.
But people are in crypto for a good time, not a long time, right?
Do Not Underestimate The Power of The Internet Culture!
Listen, when crazy people pull in the same direction, unthinkable things can happen.
Not so long ago we witnessed the rise and fall of GameStop stock prices, propelled by a bunch of gentlemen from r/wallstreetbets. A hoard of self-described apes artificially inflated the store's stocks, however, this upward trajectory was eventually halted, leaving the group feeling betrayed by the manipulative actions of wealthy individuals.
Driven by their discontent, the group stumbled upon Dogecoin, which attracted them by existing on a decentralized financial system, thus being safeguarded against manipulation.
They perceived Dogecoin as a creation that emerged from the same cultural background, reflecting similar values to their own, in stark contrast to the stock market. Consequently, this group embraced Dogecoin as their next venture or undertaking.
Memes are weird like that. They are an integral part of our current cultural landscape, they unite people, and they shape our world into what it is today. Let me tell you, even marketing specialists with a bunch of degrees are scouring the web for elite tier memes as we speak…
I’m not ashamed to say that I’m a meme enjoyer, but my stance on memecoins reflects their own philosophy - I take them as a gag they are supposed to be. Crypto snobs think that memecoins demean and undermine the reputation of crypto as a whole, but I’ll say that if the industry can be undermined by a bunch of memes, it probably has much bigger problems to worry about.
All I can say, don’t let your dreams be memes. Go visit my personal blog if you liked what you saw here, and keep an eye on more guest posts here, at Blockleaders.
Bonus Level: Predicting ‘The Next Big Thing’
Oh wait, I almost forgot! The credits are rolling, the show is over, but one thing remains.
I need to throw my prediction out, try to pin down the next memecoin that will rattle the pencilneck geeks, make some kids rich, and leave 95% of the population wondering how have we made it to the year 2023 as a species.
Remember, this is not financial advice, this is financial wisdom. Here are some knowledge bombs:
- Do what you do best - have fun online. Browse memes on Reddit, YouTube, Twitter, 4chan, 9gag, whatever platform floats your boat. Don’t look for memes on Facebook, it’s an old people platform that never had a hip to their hop. They attract the most ‘normal’ human beings, so crypto potential is low there…
- Pin down a popular character with 4-5 letters in its name. You see, people buy stories and not stocks. The next big memecoin will likely be related to something culturally relevant, as we have seen with DOGE and PEPE before. I scratched my head and wondered who fits this description… GREG from Twitter? WOJAK, the crypto martyr? This brainstorm alone led me to discover two fairly fresh memecoins that might have peaked already. It’s not much, but it’s honest work.
- Keep an eye on meme economy. To win the memecoin lottery, you don’t have to put your life savings into the funniest token you have ever seen. It’s all about picking what other people predict others will pick… Elon Musk is not the richest dude on Earth because of his own qualities. People have bought into the story of Tesla and the promise of an electric car future, and speculators bet on others coming to believe this story.
Remember, smart investors watch the world, the numbers, and most importantly, other monkeys with jobs and aspirations of financial freedom.
It doesn’t matter what the next hot meme will be. It could be a dog, a frog, or even a hog. Meme speculation is an introspective and self-referential multiplayer game, wherein each participant purchases the meme they anticipate other players will invest in. It’s really that easy.
And on that note it is time to wrap this spectacle up. Have a nice day, week, see you soon!