When Will Smith smacked Chris Rock, the infamous moment shook the world and was immortalized on the Blockchain two days later. The slap’s near-instantaneous transformation into currency was unsurprising. Memecoins are a kind of cryptocurrency associated with viral events and Internet jokes, having a volatile value that fluctuates rapidly. Certain currencies, such as Dogecoin and Shiba Inu, have persisted and are now accepted as payment by Tesla and GameStop. The majority, such as Space Kim – a token mocking North Korean leader Kim Jong Un – are pranks, a hazardous investment with no discernible aim. However, those who enter early may benefit handsomely. This is why, two days after the Oscars, the currency attracted almost $3 million in trade before plummeting to practically nothing inside a week. Its brief surge benefited early investors who understood the memecoin ecosystem and that whenever interest rates decrease, so does the value. However, it sparked a violent sell-off for thousands of others, with many scrambling to recoup as much of their original investment as possible.
The Rise Of Memecoins
According to most sources, memecoins were created in 2013, after the widespread success of a picture of a talking Shiba Inu dog named Doge. A couple of software engineers created a digital money with a theme. Dogecoin was created to mock the bitcoin industry.
However, in 2021, when cryptocurrency started to gain widespread recognition, the industry began to expand. Experts claimed the increase resulted from a combination of factors: Redditors artificially raised GameStop’s stock, surprising Wall Street, and empowering outsiders who felt emboldened by the notion that they, too, could influence financial markets. Many had discretionary wealth due to high savings rates during the epidemic, which made them more comfortable with riskier investments. Additionally, prominent figures such as Elon Musk have endorsed joke currencies such as Dogecoin online.
Billy Markus, the developer of Dogecoin, expressed his displeasure for memecoins in February, saying on Twitter that they have become clogged with spam adverts, false information about founders, extravagant claims, and frantic efforts to get Musk’s attention for promotion.
The Biggest Issue With Memecoins
Coin makers have complete control over the number of coins struck, often in the billions or trillions, guaranteeing that each currency is worth significantly less than one cent and lowering the barrier to investing in a coin to an absurdly low level. (Investors could buy up a Will Smith Inu coin for roughly $0.0000002176)
One of the most typical scams, known as a rug pull, in which coin producers seek investment in their currency and then abruptly leave it by selling a sizable share, thereby reducing the coin’s value to zero for others, has wreaked havoc on average investors in recent years. Once considered a lighthearted version of cryptocurrency, critics and former memecoin moguls argue that the industry is now replete with frauds, making it an especially risky commodity that rewards a few at the expense of many.
Almost all experts believe that participation is basically gambling and that sticking to renowned gateways that trade the major cryptocurrencies Bitcoin, Ethereum, and Litecoin, such as Altalix, is the safest and wisest way to invest, particularly for newbies unfamiliar with this niche arena.