Memecoins Explained: Back to Basics with MacguyverTech
Blockchain and Cryptocurrency are an integral part of our future, but they’re intimidating and confusing for those still unfamiliar with blockchain technology. It has come to our attention at MacguyverTech that there is decidedly an audience for a more basic approach to smart contracts, blockchain, cryptocurrency, the Metaverse, Web 3.0, and related topics.
To that end, we’re writing a “Back to Basics” series that will hopefully be of use to our readers. “Cryptocurrency Explained” was our first, and it can be read here. This article is about the basics of Memecoins. Keep in mind that what we’re presenting isn’t unlearnable; it only requires patience. At one point, everyone was a beginner.
What are Memecoins?
At their most basic level, Memecoins are in fact cryptocurrency. They’re an “altcoin,” which just means that they’re any cryptocurrency other than Bitcoin. The name originated with Dogecoin (DOGE); a cryptocurrency created in late 2013. Ironically, Dogecoin was created as a joke, based on the popular “Doge” meme at the time, and was intended to mock speculations about Bitcoin. It wasn’t originally intended to become a form of payment for things.
To quote Morpheus from The Matrix: “Fate, it seems, is not without a sense of irony.”
Dogecoin went on to become one of the more wildly speculative cryptocurrency investments of the next 8 years. It was eventually added to coin exchanges, used for tipping, and today is even accepted by the NBA’s Dallas Mavericks as a form of payment. Other imitation dog coins followed suit, and then thousands of other types, many of which have legitimate charitable causes and digital assets attached to them.
Wait. Dogecoin was originally intended to be a JOKE?
Yes, it was. One could argue that it still is. For the most part, the coin isn’t even attached to any digital products of worth, like many other memecoins. Regardless, it proves beyond a shadow of a doubt that while cryptocurrency (like plenty of other assets) has no intrinsic or fiat currency value, it still has whatever economic value people are willing to pay for it.
One of the driving factors in the rise of Dogecoin was its endorsement by Elon Musk. He’s widely perceived as one of the smartest people on the planet, so when he started noticing it, everyone else did too. Either he saw the value in a community-driven coin, or he was in on the joke. A third possibility, of course, is that it was a bit of both.
As of this writing, people are willing to pay approximately 13 cents for one Dogecoin. Despite the cryptocurrency correction that has hit virtually digital coin in existence, if you had purchased $100 worth of Dogecoin in March of 2015 and held it, you would have a couple hundred thousand dollars in your wallet right now.
So, are memecoins just a fad?
It appears not, although it’s hard to say what the future holds. Presently, the market appears to be stagnant, but there are still memecoins taking off, if one knows where to look. For example, the Catcoin (CATS) has increased in value a hundredfold just this past month. We wrote about it here.
The reason these coins may be more than just a fad is community. They’re not fiat, but whenever a large community holds a token, and all of them embrace its value, the value inherently increases. This is referred to as the “Network Effect.” A decentralized organization like a blockchain community can achieve this just as readily as a geographically centralized one.
As always, we at MacguyverTech want to emphasize that we are not giving financial advice. We’re simply making commentary and giving our opinions. As always, don’t invest anything you can’t afford to lose, use your heads, and be careful out there.
And somewhere out there, we’re willing to bet someone has a yacht named “Doge.”
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