Dogs, frogs and cats. Animals that have been inspiration for so-called ‘meme coins’. Cryptocurrencies that are often set up as a joke, but due to their popularity have sometimes become worth more than a Dutch multinational. In addition, their impact and influence extends far beyond simple humor. In this blog I will discuss in detail what exactly ‘memecoins’ are and what you can do with them.
According to Van Dale, a ‘meme’ is a humorous image, video or piece of text that is copied, usually with minor variations, and quickly spread by internet users.
Memecoins are not much different from this definition in that respect: they are nothing more than cryptocurrencies inspired by memes and internet jokes.
The coin is completely useless and for entertainment purposes only. – Founders Pepecoin
Humor meets crypto
The coins are designed like any other cryptocurrency, such as Bitcoin or Ethereum, but almost never have fundamental value or a special use case. Their value largely depends on how much momentum the joke can generate. Most investors often buy meme coins to be part of a community or just for fun. The only use case for most memecoins is really pure speculation.
Yet this is taking serious proportions. At their all-time high, Dogecoin reached a market capitalization of $84 billion, which at the time was equal to the value of a company like Uber or Unilever. The second memecoin Shiba Inu reached a valuation of $40 billion. At the time, it was as much as the value of PostNL.
What do you meme?
The original and most prominent memecoin is Dogecoin (DOGE). DOGE was founded in 2013 by software engineers Billy Markus and Jackson Palmer and was branded entirely around a popular meme: the Shiba Inu dog. The name is an incorrect spelling of the word dog, again intended purely as a joke.
According to the founders, this wasn’t just a joke. They wanted to send a clear message against the many crypto projects, which ultimately turn out to be just a ‘scam’.
My whole point of dogecoin was taking a jab at all these alt-coins that were coming on the scene and basically making a cash grab. – Jackson Palmer, Founder Dogecoin
But in what would become a hallmark of other memecoins to follow, Dogecoin began to make a name for itself thanks to a fanatical community of users. Who acquired a kind of cult status. For example, when the Jamaican bobsled team qualified for the 2014 Winter Olympics in Sochi, Russia, but could not finance the trip, the Dogecoin community came together to raise approximately $30,000 for charity.
But it wasn’t until celebrities started supporting Dogecoin that the price skyrocketed. The coin’s most notable booster is Elon Musk. The billionaire has constantly promoted Dogecoin and even appeared in a sketch on the popular TV show “Saturday Night Live” in which he referred to himself as the “Dogefather.” With effect; at its peak, Musk’s support propelled Dogecoin to a market size of $88 billion in May 2021.
From meme to coin in 22 seconds
Previously I wrote about how easy it is nowadays to create your own digital currency. You’ve already made one in 22 seconds.
The open-source nature of the blockchain technology that makes cryptocurrencies work ensures that makers can simply ‘fork’ existing cryptos. This means that you literally copy all the code of an existing crypto, paste a different logo on it and change the name. And then launch it as a new crypto.
Many cryptocurrency projects put all their code on Github. So you can literally use all of Bitcoin’s code to create a new cryptocurrency yourself, in literal seconds. Or you just use GPT! An Australian artist created his own cryptocurrency ‘Turbo’. Which quickly rose to a $77 million value.
What is money anymore?
A fun discussion I always have with the audience when I talk about cryptocurrencies is the definition of money. Because are cryptocurrencies, such as memecoins, money? According to the Dutch Bank:
Money has three functions. It is a unit to express value, we use it to save and of course we also pay with it.
Many crypto enthusiasts say that crypto can function well as a medium of exchange, unit of account and store of value. If we go back in history, we see the most special forms of money.
In fact, the word “salary” comes from the Latin word for salt, “salarium.” This is because salt is one of the oldest ways in which we spread cash in Roman times and the Middle Ages. But in 2024 we do not only work with coins and notes. In fact, in Italy, a bank still accepts whole Parmesan cheeses as collateral for loans and has 440,000 of them in its vault. Bottle caps are still used in Cameroon and certain shells are still used in the Solomon Islands.
If we look at the number of users of the largest memecoin Dogecoin alone, it exceeds the number of inhabitants of a country such as Croatia or Oman.
But then it quickly turned into a legitimate thing… and at that point, I was like, ‘Oh my god, now I feel responsible for this joke’. I feel responsible for this economy.– Jackson Palmer, Founder Dogecoin
All about the meme?
In addition, unlike fiat currencies such as the Euro and Dollar, most cryptocurrencies are fully decentralized and operate peer-to-peer. Without an intermediary such as a bank, credit card company or Paypal. Something that appeals to more and more people after the financial crisis and in recent years. In which more and more people lose their confidence in financial institutions such as banks and governments. While the Boston Consultancy Group predicts that the number of cryptocurrency users will rise to one billion by 2030, there are now also analyzes that predict this will happen next year.
I think it is more than an outsider within cryptocurrency. It is a cultural and economic movement born from the unique blend of technology, social media and a shared interest among an ever-growing group to democratize the financial world. They give internet communities the opportunity to create and attribute value to a digital asset based on a shared story and belief.
Even though they are not without risks and challenges, in my opinion they make for a very cool intersection of money and internet culture. Our idea of what exactly ‘value’ is is also being put to the test.
