Meme Coins vs Cryptocurrencies: Key Differences Explained
Not all cryptocurrencies are created equal.
That’s the one liner that you need to hold in your mind throughout this article.
Some cryptocurrencies have serious use cases, while others are a joke, and we don’t mean that to sound harsh, but they are literally a joke.
They’re known as meme coins, and in this guide, we’ll explore the differences between meme coins and traditional cryptocurrencies, as well as look at their potential uses, the risks involved, and provide examples of each.
Let’s go.
What Are Cryptocurrencies?
Cryptographic currencies, shortened to cryptocurrencies, are digital assets that use the blockchain and distributed ledger technology to secure transactions and control the creation of new coins.
Whereas fiat currencies like the Dollar, Pound, and Euro are issued by governments, cryptocurrencies instead operate on decentralized networks, making them censorship and manipulation resistant.
Top cryptocurrencies provide an alternative to traditional finance (TradFi) systems, for example:
Bitcoin $BTC - a peer-to-peer electronic cash system that was designed to remove intermediaries and which is now a global phenomenon
Ethereum $ETH - a smart contract platform that enables developers to think big and build decentralized applications on the blockchain
Solana $SOL - a high-performance blockchain built for mass adoption through different use cases like gaming, payments, finance, NFTs, meme coins, and more
By starting with specific use cases, the long-term value proposition is clear, unlike that of their meme-driven counterparts…
What Are Meme Coins?
Meme coins are a fun, exciting, and “degen” realm of cryptocurrencies that often start as jokes or internet memes and quickly gain traction due to viral appeal and community interaction.
The key difference between meme coins and crypto is that there’s usually no serious technological innovation or utility.
That isn’t to say that they’re pointless, it’s just that the role they play is much different.
Some meme coins evolve into legitimate projects if they make enough money in their early stages, while others fade into obscurity.
Other meme coins are used as incentives to reward actions. Some meme coins are launched by individuals on meme launcher platforms (like pump.fun) for people who enjoy real-time high-risk meme coin trading.
Other meme coins are used to unite a community over shared ideals or a common goal.
Meme Coins Vs Crypto
The biggest differences between meme coins and crypto can be found in the table below:
While both categories are cryptocurrencies, and operate within the same broader ecosystem, their goals and characteristics are vastly different.
Note that even the best meme coins lack the technological prowess of most altcoins.
Best Examples of Traditional Cryptocurrencies
Here are some famous coins you have to know about:
Bitcoin $BTC - The first ever cryptocurrency, and still the dominant player in the market, often seen as a store of value and referred to as “digital gold”
Ethereum $ETH - Pioneered the idea of smart contracts and decentralized finance and DeFi applications, completely revolutionizing the blockchain industry
Solana $SOL - Known for high speed and low cost transactions, making it a favorite for blockchain developers and users
Binance Coin $BNB - The native token of the Binance exchange (the world’s largest crypto exchange). It is widely used to pay transaction fees and enjoy high-yield staking within their ecosystem
Best Examples of Meme Coins
Here are the most famous meme coins:
Dogecoin $DOGE - What started as a joke quickly became a cultural phenomenon thanks to the enthusiastic support of Elon Musk, which surprised even DOGE’s creator
Shiba Inu $SHIB - Dubbed the “Dogecoin Killer”, $SHIB gained massive popularity and a huge following during the last bull run, despite limited utility (p.s. it didn’t kill DOGE)
PepeCoin $PEPE - The internet’s favourite frog became a viral meme coin success that captured the attention of investors
Bonk $BONK - This meme coin was airdropped to new Solana Saga phones, turning them from a failed product launch into the most valuable and desirable Web3 smartphones in the world
Meme Coins vs Altcoins
All meme coins are altcoins, but altcoins are not necessarily meme coins. That’s an important difference to clarify.
Some notable differences include:
Fundamentals - Promising altcoins are usually backed by strong fundamentals, like unique technology, innovative features, credible team members, while, on the contrary, many meme coins lack fundamentals or signs of quality or longevity.
Purpose - Legitimate altcoins will strive to fill gaps in the current financial system by offering viable solutions to real-world problems, whereas most meme coins fail to deliver anything beyond short term speculative trading opportunities.
Market Cap - Established altcoins often rank higher in terms of overall market valuation. If we compare with obscure meme coins, they form the bulk of bottom-tier rankings on crypto exchanges and data tracking websites like CoinMarketCap and CoinGecko.
Are Meme Coins a Good Investment?
In general, it’s essential to conduct thorough research and understand the potential risks before investing in either category.
Due to the extreme volatility of meme coins, there’s a good chance you will lose your investment, so DYOR and proceed with caution!
Final Thoughts on Meme Coins and Altcoins
Understanding the difference between meme coins and traditional currencies will serve you well in this complex and dynamic space.
You could lean into the playful and fun meme coin space and find vibrant communities full of humour, whereas, if you’re more interested in technological progress and innovation, altcoins might be a better fit for you.
Important: Always conduct thorough research, stay informed about market trends, and never invest more than you can afford to lose.
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