What is a Meme Coin?
A meme coin is a cryptocurrency named after characters, individuals, animals, artwork, or anything else with the goal of being humorous, light-hearted, and attracting a user base by promising a fun community.
Key takeaways
- Meme coins are a type of cryptocurrency that relies on humor and the promise of a fun community to attract users.
- Examples of meme coins include blockchain-based coins and tokens such as Dogecoin and Shiba Inu.
- Meme coins can be profitable investments, but they are as volatile as other cryptocurrencies and may have less liquidity than more popular coins.
- Meme pieces might be more useful to people interested in the user community or the meme itself.
Understanding Meme Coins
Meme coins are a cryptocurrency genre generally heralded as having an exuberant online community supporting the development and growth of the currency. They are sometimes identified with animated characters or animal meme images.
As with other cryptocurrencies, meme coins are created using blockchains. The tokens themselves are hexadecimal numbers stored on a blockchain, with private keys associated with them for ownership purposes. Coin images with fun logos are used to attract users.
In many cases, they have a market value, which also makes them convertible currencies that can be used in real-world transactions. However, many meme coins don’t often have a use, such as being used to pay blockchain participants for their work for the blockchain. For example, ether is used to pay validators to verify transactions on the Ethereum blockchain.
The websites for most meme coins advertise that they are meme coins, intended for something other than fun. The most popular meme coins claim to have uses (called utility) and emphasize the fact that they are accepted by certain merchants. Many meme coins can be converted to fiat currency because they are listed on a centralized exchange and therefore have a market value. However, this is not helpful; this is convertibility.
Examples of Meme Coins
The top 10 meme coins (by market capitalization) as of September 1, 2024 were:
- Dogecoin (DOGE): Market capitalization $14.42 billion, price $0.09854
- Shiba Inu (SHIB): Market capitalization $7.97 billion, price $0.000135
- Pepe (PEPE): Market capitalization $3.16 billion, price $0.000007494
- Dog Hat (WIF): Market capitalization $1.48 billion, price $1.48
- Bonk (BONK): Market capitalization $1.19 billion, price $0.00001709
- Floki (FLOKI): Market capitalization $1.17 billion, price $0.0001223
- Brett (BRETT): Market capitalization $747.13 million, price $0.07486
- Dogs (DOGS): Market capitalization $627.97 million, price $0.001206
- Popcat (POPCAT): Market capitalization $565.59 million, price $0.566
- Meme Book (BOME): Market capitalization $412.09 million, price $0.005952
If you find the distinction between meme coins, scams, and cryptocurrencies confusing, you’re not alone. This can help compare a real white paper (like Ethereum) to a coin (like bonk piece). Find the project’s development pages (like on GitHub) and read some discussions. Also read any posts on social media, like Reddit or X, there will be people and groups discussing the pieces you are watching.
Advantages and Disadvantages of Meme Coins
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Fun asset type to use to learn about cryptocurrency and blockchain technology
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Generally much cheaper than other cryptocurrencies
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Potential participation in an active investing and trading community
What is a Meme Coin?
A meme coin is a cryptocurrency that is aimed more at creating a fun image and attracting investors rather than being used for anything.
Which Meme Piece is Best?
Meme pieces, by design, have no purpose other than to exist. There is no “best” meme coin, only fan and speculator favorites.
Is Memecoin a good investment?
There is a meme coin named Memecoin. Its website states: “Memecoin (MEME) is literally a coin. No utility. No roadmap. No promises. No expectation of financial return. Just 100% memes.” Meme coins, including Memecoin, are generally not good investments unless you are interested in memes and community involvement.
The essentials
Meme coins are an interesting cryptoasset but may not be suitable for most investors. There’s a very small chance you’ll pick the next big play before the fans send it “to the moon.” However, meme coins are much less likely to generate the returns that most investors would prefer to earn.
Comments, opinions and analyzes expressed on Investopedia are for informational purposes only. Read our warranty and exclusion of liability for more information. As of the writing of this article, the author does not own any cryptocurrency.