Every time I log onto Twitter I see only one thing, #DogecointotheMoon, and it has me thinking: What are these meme tokens? Why is Elon Musk using them to help humanity become multi-planetary? What are its long-term impacts? Let’s start at the beginning.

What are “Meme Coins”?

In short, these meme coins are a form of altcoins, i.e. cryptocurrencies other than Bitcoin. They share certain characteristics with Bitcoin but can use different consensus mechanisms or include smart contracts. According to CoinMarketCap, altcoins accounted for over 40% of the total cryptocurrency market in March 2021. 

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These altcoins are being created by the thousands, including Dogecoin (which was started back in 2013), Shiba Inu, and Elon Musk’s new Dogelon Mars (see a full list of top meme tokens by market capitalization here)

What’s the difference between Meme Coins and Meme Stocks?

The first well-known meme stock stemmed from r/wallstreetbets: GameStop. These Reddit investors drove up the price of the stock to make a profit. But there is one major difference between meme stocks and meme coins. When investors drive up the price of stock prices, the actual underlying business of the company isn’t affected much by it. However, theoretically, the value of meme coins grows with the price, especially since there is no business attached to it. The more people that buy it, the greater the price and the greater the value.

Two words: public influence. Figures like Elon Musk and Mark Cuban not only influence visibility but also have a major influence on the price and value of these meme coins. For example, this past Saturday Elon Musk was on Saturday Night Live, where he said that Dogecoin was a “hustle”, plunging the coin almost 30%. But that was made up quickly by the end of the week when Elon tweeted that he was working with doge devs to improve system transaction efficiency.

Plus, you have the Dallas Mavericks owner Mark Cuban, who said that the Mavericks were on track to complete 6,000 dogecoin transactions in April. Cuban said that he backs it because people actually use it for transactions, and the more people spending it means more businesses using it (source).

What’s in store for the future?

Despite the fact that these coins are quite literally called meme coins, they have the potential to have a large impact on society. For example, the co-creator of Ethereum (the second-highest valued cryptocurrency) Vitalik Buterin, donated meme coins (50 trillion Shiba Inu) worth $1 billion to help India fight COVID-19.

Plus Elon Musk’s Dogelon is described as “a fair universal currency for the people”. The official site says that it is the first interplanetary currency, named after the capital city of Mars “Dogelon”. Musk doesn’t define Dogelon as a meme coin, but you have to admit that you can’t help but laugh. Beyond that, I think this is a step in the right direction of crypto. The goal of undoing the negative connotation around crypto is not a small task, but if anyone can break barriers it is Elon Musk.

Facts or Fiction?

In general, cryptocurrency is still in its infancy. It will be interesting to see if Mark Cuban, Elon Musk or Vitalik Buterin are correct about the future. Of course, you will have some who are opposed, like Reddit user u/TrueNorth49th. He wrote in a recent post on r/CryptoCurrency that altcoins are “like the roster of a petting zoo out there… Is this just FOMO and greed running rampant or am I missing something here? 🧐”

He makes a good point. There is an endless supply of altcoins out there, so what makes one better than the other? I don’t have the answer to that, and it will be interesting to see how these meme coins grow in the coming days, months, and years. In the meantime, do your research and remember that crypto is very volatile. 

But hey, you can’t get to the top if you don’t jump on at ground level.

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