The Meme Coin Culture: So You Want To Be A Millionaire?
Everyone reading this has heard about meme coins. You probably learned about blockchain through meme coins, whether it is through Dogecoin, Shiba Inu, PEPE or whatever the token is, these tokens have taken the world by storm.
Dogecoin is so popular that it is the 8th biggest cryptocurrency in marketcap, sitting at around $11B as we speak. A coin that inherently was created as a joke, and it still beats cryptocurrencies that have poured sweat and tears on utility. The question is why?
There are 2 main reasons why that we will go through in this article, but before a quick disclaimer:
IF YOU DECIDE TO BUY SOME OF THESE MEME COINS DO IT AT YOUR OWN RISK. YOU WILL MOST PROBABLY LOSE ALL YOUR MONEY THAT YOU PUT INTO IT. IF YOU THINK THIS IS A LEGIT INVESTMENT AND YOU WILL BE RICH FROM IT, I CANNOT HELP YOU, YOU NEED SERIOUS HELP.
With that out of the way, let us dive right into the main reasons behind their popularity.
The Riches
Whenever someone hears about a meme coin they ultimately hear how someone bought the coin with only $20 and became a millionaire 2 days later. The intrigue of becoming a millionaire with only the price of a Starbucks coffee. This creates a sensation which we call FOMO (or fear of missing out). When people hear that someone made that much money from a simple coin, they think that they could be the next one.
“Oh Boy, you are in for a long ride.”
What most of people who have no idea how that works is that there is a difference between the value of your tokens and how much cash you can actually get by selling the tokens. This is what is called liquidity.
Let us say that for example, you create a company for 1 Trillion shares and you are able to sell one share for one single dollar. This means that on paper the total value of your company is now 1 trillion dollars, and you are now the richest person ever. Congratulations. Bad thing is that you won’t find a sucker to sell the rest of the company too, you could possibly find 1 or 100 more suckers but that is it, depending on the number of people you find who are willing to buy stocks is the total liquidity you actually have. You may also land in prison due to securities fraud, but that is a topic for another day.
This is why when someone says that Elon Musk could give away $3 to the whole population you should cringe, because if you think that he has this in cash, or can liquidate to get this amount of cash, you are not ready for the real world.
In blockchain, the same concept remains but rather than going going out and searching for other people to buy your token, you will search for them, the process is automated using liquidity pools. Liquidity pools work by adding to tokens to a box, a stablecoin which represents dollars for example and number of a token. The more people buy these tokens, the more dollars are now in the pool and the less token there is, increasing the price of each token and vice versa. Therefor, the total amount of money you could possibly make is the amount in the liquidity pool. If the value of the tokens that you own is larger than the amount in the liquidity pool, it does not matter. So even they show you that people made from $20 millions and millions, if the liquidity pool is $20, this is what they are getting.
This is why it is also important to look at a liquidity of a token and whether it is locked or not, which means that whether the creator can steal all the liquidity pool (Rug) the project, and making the holders the real meme.
The Meme Community
Some people know that they will not make millions, or any profit at all, but the idea of being part of a community of memes is enough. This is what dogecoin is all about, people just want to see the Doge make it. People who buy dogecoin join a community of jokers, communists, capitalists, idiots and geniuses, all joined by a dog, and this is why it is so beautiful; because in the end the value of the token is what it is given by its community. You can join any community and talk about the meme, share it and spread it. You could call it a harmless cult, and sometimes this is what people look for. In a world more divided than ever by politics, race and gender, it is unified by a funny meme that probably got way too far.
Meme coins also allow retail investors to be introduced to the world of blockchain and its use case, that then allows them to invest in more useful cryptocurrencies that will revolutionize the world.
In the meantime, I believe that meme coins are beautiful, and I hope they last forever.
In a future article, we will discuss more about the power of decentralization and how it allows such projects to succeed, and how you can implement it in your own business.
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