Author: Yonathan Lapchik, CoinDesk; Translation: Song Xue, LianGuai
Meme Coins: This term is both interesting and contemptible in the crypto community.
The wild journey of pepecoin (PEPE), from a joke to a somewhat mature project, perfectly captures the excitement and unpredictability that this digital asset brings.
It’s time to start taking Meme Coins more seriously. These assets, driven by social media hype, have emerged from internet culture and attracted a large number of cryptocurrency newcomers. If not controlled, Meme Coins may reinforce misunderstandings about the broader cryptocurrency field.
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They are both catalysts for the widespread adoption of Web3 technology and potential obstacles that could lead to long-term confusion and skepticism among outsiders, and cause regulatory agencies to have misconceptions about the industry.
The Appeal of Meme Coins
The rapid rise of meme coins – Dogecoin (DOGE), Shiba Inu Coin (SHIB), PEPE, and others – is simply a spectacle. These digital assets have become fascinating gateways for more and more people to enter the unknown world of Web3.
Meme Coins combine internet humor and speculation and attract people from all walks of life with promises of astronomical returns. To some extent, Meme Coins are one of the most important driving factors behind mainstream Web3 adoption.
The appeal of these Meme Coins goes beyond their comical origins or potential for quick profits. They effectively create a fair competitive environment in the intimidating world of cryptocurrency, igniting the interest of those who may have previously considered this field as the exclusive domain of tech-savvy investors and financial masters. They also bring hope to many people who are interested in Bitcoin but feel like they missed the investment opportunity.
All of this does not mean that investing in Meme Coins is wise. In fact, the best thing that could happen is for crypto newcomers brought in by crypto dick butt or SHIB to understand the true innovations in Web3, the potential of different distributed applications (dApps), and the importance of self-custody. This is not a wishful thinking, but a common crypto pipeline.
In many ways, Meme Coins have transformed passive internet users into active participants in the DeFi space, encouraging them to directly explore, learn about blockchain technology, and interact with it. However, this interesting and democratized gateway also has its challenges.
The Dark Side of Meme Coins
The inherent volatility and unpredictability of Meme Coins is a major issue, especially when influential figures make hollow promises of astronomical returns. While stories of overnight riches and huge profits may make headlines, on the other hand, the possibility of losses can also come suddenly. As the saying goes, “What goes up must come down.”
The price of Meme coins has been volatile, driven by factors such as social media posts or changes in community sentiment, while the milestones in the roadmap seem to have made little progress.
In addition, the fundamentals of these assets are often questionable. Unlike traditional blockchains like Bitcoin or Ethereum, many Meme coins lack intrinsic value or specific use cases, meaning their prices are mainly driven by speculation rather than technological innovation or real-world utility.
The creators of Meme coins also rarely attempt to hide this fact. For example, the bottom of the pepecoin landing page reads: “This coin is completely useless and only for entertainment purposes.” This obvious lack of practicality has raised legitimate concerns about the sustainability of their growth, with many in the cryptocurrency community questioning whether the prosperity of Meme coins can be sustained in the long term or if it is simply a speculative bubble destined to burst.
The possibility and inevitability of market manipulation exacerbate these challenges. In the absence of regulation, Meme coins can be used to artificially inflate prices before influential individuals or large investors sell off their holdings, leaving ordinary investors vulnerable.
In addition, every massive profit comes at the expense of a majority of people suffering huge losses. This is known as “bag holding,” where traders miss the optimal selling opportunity and hold onto a depreciating or mostly worthless token portfolio. This is the origin of the term “PvP” (player versus player) in the cryptocurrency community.
It is called “playing,” which emphasizes the competitive nature of Meme coin trading and brings to mind the high-risk “prisoner’s dilemma,” where participants compete with each other, trying to predict who will be the first to sell their tokens.
These aspects of Meme coins have stirred up the waters of the cryptocurrency world, often leading to misunderstandings and reinforcing skepticism, such as the belief that “all cryptocurrencies are scams.” Therefore, for most rational users in this field, Meme coins are a significant barrier to the widespread adoption and acceptance of decentralized technology.
Unfortunately, the challenge that the public faces now is not starting from scratch but rather forgetting their current understanding of blockchain and Web3. Only then can they truly grasp the extraordinary innovation and opportunities brought by this new technology.
With the dynamic fusion of entertainment and investment, Meme coins have left an indelible mark on the cryptocurrency field and have played a crucial role in driving mainstream recognition of Web3.