What Is a Meme Coin? Decoding Its Virality

Imagine if your beloved meme character, Pepe the Frog or Shiba Inu the dog, transformed into a crypto coin. Although this might sound too fun to be true, that’s exactly what is a meme coin!

Due to their comedic and rather unique nature, meme coins rose to fame overnight, garnering the love of thousands of crypto and meme fans. Riding on this wave, numerous crypto meme coins have surfaced, mimicking a variety of characters, individuals, animals, or even artworks.

If you’re wondering where to buy meme coins, I suggest finding them on trustworthy crypto exchanges like Binance, Kraken, or Bybit. That said, having some foundational knowledge of what is a meme coin before you join in on the hype will be great. So, let’s get into it!

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What Is a Meme Coin?

When it comes to what is a meme coin, as you can guess, the name says it all: it is a digital coin inspired by memes. Specifically, a meme is an image, video, GIF, or any type of media with comedic or satirical purposes, making it shareable across communities such as 9Gag.

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Memes are often inspired by pop, social, and political culture. If you remember the infamous “slapping incident” at the 2022 Academy Awards, this phenomenon became a sensational meme and even inspired the “SLAP Coin”.

So now, you probably have some idea of how these crypto meme coins came into existence. They are here to add some light-hearted fun to the crypto community, although not all of them are meant to be taken seriously. 

While we have the billion-dollar valued DOGE, some meme coins are “scammy” in nature, such as the Squid Coin. Don’t worry, I’ll talk more about this in the upcoming section.

Now, to further understand what are meme coins, let’s explore their history.

The Origins of Meme Coins

So, if you are curious about what are meme coins, you might as well wonder how they emerged in the first place. It all trailed back to the story of Dogecoin (DOGE), which is the grandfather of all crypto meme coins.

DOGE was first released by software engineers Jackson Palmer and Billy Markus “as a joke”, inspired by the “much wow” Japanese dog meme that was popular on 4Chan and Reddit in the Summer of 2013. The founders had a mission: creating a digital currency that could reach a larger audience base than Bitcoin while playfully satirizing the frenzy toward cryptocurrency.

As an engineer who was also part of the marketing team at Adobe Australia, Palmer turned his idea into reality by creating a website on the domain Dogecoin.com, which featured a splash screen of the Shiba Inu’s logo with Comic Sans text.

Markus then began designing the currency by taking inspiration from the protocols of Luckycoin and Litecoin, conceiving the first-ever coin to be generated from a meme. In less than 72 hours, Dogecoin spiraled into virality, with its value skyrocketing to 300%. The coin gained tremendous support on Reddit, where it was used as a tipping currency.

What followed after was a “new” category of coins that mimicked public figures and animals for irony and comedy, from Kanye West and Max Keiser to pandas and cats. They are what we know today as examples of crypto meme coins.

Also, when talking about what are meme coins, it’ll be a miss to not drag the billionaire Elon Musk into the conversation. Thanks to his active promotions on X, Dogecoin recorded its highest market cap yet, reaching a staggering amount of 88 billion USD.

It was also around 2020 when Elon Musk appeared on TV and claimed himself as “Dogefather” on Saturday Night Live. As a result of this pop culture sensation, a coin dedicated to Elon Musk’s Shiba Inu, “FLOKI”, was born.

Once the celebrity endorsements died down, though, the performance of Dogecoin also began slowing down. Still, alongside a couple of other meme coins, Dogecoin remained in a pretty high position on the cryptocurrency ladder.

Hopefully, this gives you enough illustration not only of what are meme coins but also of how they rose to fame.

How Do Meme Coins Work?

Diving deeper into what is a meme coin, you need to also understand how it works. Meme coins operate similarly to other cryptocurrencies, but their mechanisms differ from project to project.

For starters, most meme coins aren’t actually “coins” in the traditional sense. They may not have their dedicated blockchains and are instead minted on existing networks. Typically, these tokens are mined on blockchains like Ethereum and Solana, which make use of smart contracts.

On the other hand, some meme coins have their own mining protocols. Dogecoin, for instance, can generate new supplies once there are miners who succeed in fortifying the blockchain’s network. Plus, the development of meme coins is often quicker than you’d expect. Dogecoin itself was created in just two hours, and some others took as instant as a few minutes to develop.

Unlike the “more serious” crypto projects, though, most meme coins lack fundamental value and typically don’t begin with a whitepaper.

A whitepaper is a report that details the problems, solutions, features, and future trajectories of a crypto or blockchain project. In retrospect, users find information on meme coins through their respective websites, just like how people discovered Dogecoin.

So, now you have an idea of how meme coins are produced. Still, some questions remain unanswered: How to find new meme coins? How are they circulated?

Meme coins are distributed through a couple of channels or methods:

• Centralized Crypto Exchanges: High-market meme coins, such as Dogecoin and the Shiba Inu token, can be found and purchased on major exchanges like Binance or Bybit.
• Decentralized Exchanges: Most meme coins are circulated through decentralized exchanges, where users can partake in pre-sales and have options to liquidify the meme coins.
• Airdrops: Meme coins are often initially distributed via airdrops.

As you’re probably aware, cryptocurrencies are usually limited in supply. But, most meme coins have uncapped or massive supply, which contributes to their volatile and high-risk nature. However, exceptions do exist. Shiba Inu (SHIB), as an example, has a limited supply of 1 quadrillion tokens.

At the end of the day, the rise and fall of meme coins is largely attributed to the community’s enthusiasm. A lot of meme coins have gone to bust as they receive little to no love from the community, while some have notoriously disappeared due to their “scammy” track record.

The more prominent examples, such as the FLOKI token, tend to have fluctuating patterns. This depends on “how hot” the market reactions are and how easy they are to trade.

Characteristics of Meme Coins

To fully grasp the concept of what is a meme coin, you’ll need to identify the characteristics frequently shared among them.

Especially if you’d like to know how to find new meme coins, here are some “quirks” to be on the lookout for:

• Meme coins generally spark from an idea^[1]. They mimic celebrities, political figures, or animals that have been impersonated as memes, as seen in PEPE coin and Baby Dogecoin.
• Most meme coins act mainly as trading instruments and do not have utility functions like the blockchain-powered Ethereum. For paying validators and verifying transactions, meme coins usually rely on other blockchains. As an example, Shiba Inu is an ERC-20 token that is built on the Ethereum blockchain.
• Most meme coins have a low entry barrier, but several are tied to advanced fundamentals. In terms of how to find new meme coins, it’s sometimes as simple as joining online communities or attending fair launch events.
• Meme coins’ pricing is largely determined by community buzz, market sentiment, and public figure endorsements. For instance, when Elon Musk, Snoop Dogg, and Mark Cuban showed their support for Dogecoin, its value skyrocketed.
• Meme coins undergo extreme movements in a short period of time^[2], causing them to have volatile market valuations.
• Meme coins often have large or unlimited token reserves.
• Most meme coins are relatively priced at a low value per token.

So, hopefully, these characteristics give you enough insights into what sets meme coins apart from other types of crypto assets.

Examples of Popular Meme Coins

On the topic of what is a meme coin, you’ll probably be surprised to know that there are 1,000 different versions recorded so far, making it one of the most expansive categories in the crypto space!

For the crypto community, meme coins are just so interesting, and becoming part of the movement is no less than enjoyable. Users often compete to be the most creative in creating new meme coins. In 2022 and 2023 alone, 80% of the current meme coins in existence have been produced.

I honestly find this amusing to keep track of, and you’ll be surprised by how far these coins can go in tokenizing a range of memes.  More and more characters, be it a cat or a political figure, have been symbolized as the faces of these coins.

To give you some idea, let’s take a look at some of the most popular examples of meme coins:

Dogecoin

Dubbing itself “The People’s Cryptocurrency”, Dogecoin (DOGE) is an open-source, peer-to-peer digital coin. Its symbol is the lovable Shiba Inu, popularized by the “much wow” meme.

Dogecoin is one of the few meme coins that have its own blockchain technology, ensuring secure transactions. Born from an “accidental” crypto movement, Dogecoin started its journey with little value and was only regarded as an experiment.

However, its fortunes changed in 2022, specifically when the Reddit forums r/CryptoCurrency and r/SatoshiStreetBets put in efforts to jack up its pricing. For a period, Dogecoin managed to surpass Bitcoin in daily transactions.

As of writing, Dogecoin is ranked among the top 10 cryptocurrencies. Its capitalization has reached beyond 90 billion USD, although there has been some performance decline. Plus, more than 10,000 Dogecoins are mined every minute, as there’s no maximum supply.

Dogecoin is also accepted as payment for offline and online products and services. These include Tesla merchandise, Twitch “turbo” subscriptions, and AMC tickets.

You can buy Dogecoin on exchanges like Binance, Bybit, or Kraken.

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Shiba Inu Token

The Shiba Inu token (SHIB) is a decentralized altcoin and has been predicted to be the “Dogecoin killer.” Its mascot is the famous Japanese hunting dog “Kabotsu.” Unlike DOGE, SHIB is compatible with the Ethereum blockchain. It’s built on the ERC-20 token standard, so it can be used freely on the Ethereum network.

The token was launched in 2020 by an anonymous group or a person called Ryoshi. SHIB was designed as an experiment to prove how the collective power of decentralization is more powerful than centralization.

Shiba Inu stands out as one of the top-performing meme coins, thanks to the unwavering support from the community. As of this writing, its Reddit fanbase, the ShibArmy, has 500,000 members, while its X account has amassed an impressive 2 million followers (surpassing Solana and even Ethereum).

Within a year of its inception, the token saw an impressive 150% rise in valuation. Last but not least, a pivotal moment in this coin’s history was the generous donation of $1 billion SHIB from Ethereum’s co-founder Vitalik Buterin to support India’s COVID-19 relief.

Shiba Inu is available on Binance or Kraken.

Floki Inu Token

FLOKI is best described as a coin that takes after Elon Musk’s pet pup with the same name.

One interesting aspect is how FLOKI tries to distinguish itself from the crowd through its three-pillar philosophy: status, utility, and charitability. It is now known as a full-blown web3 project that not only comprises decentralized finance (DeFi) but also NFTs and the metaverse.

Uniquely, FLOKI is also a multi-purpose token that operates both on Ethereum as an ERC-20 token as well as on the Binance Smart Chain as a BEP-20 token. For traders, this means FLOKI can be flexibly stored and transacted on both chains.

Here’s the catch: FLOKI imposes a 3% crypto tax for buying and selling, except for transfers between chains.

If you're interested in the Floki Inu token, find it on Bybit or Binance.

PepeCoin

In the exploration of what is a meme coin, dog-themed tokens are not the only ones in the catalog. Take the PepeCoin (PEPE), inspired by The Boys’ Club’s titular main frog character.

PEPE is one of the newer meme coins on the list, launched in April 2023. As read on its X account, this coin was created to be the “most memorable meme coin in existence”, aiming to dominate the rather saturated field of dog coins.

The peak point for the PEPE coin occurred when an investor made a $6 trillion purchase, soaring its market cap from $250 to $1 million in just 4 days. And yet, liquifying this meme coin is still an issue. This is because there’s a discrepancy between PEPE’s actual cash held and the total assets written on paper.

As a result, the future of PEPE remains uncharted. Will it rise to glory or fade into obscurity? If you’re a meme coin follower, stay tuned on PEPE’s social media accounts to see how the story will unfold.

Looking for where to buy Pepe? It's available on Kraken, Binance, or Bybit.

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Why Are Meme Coins So Popular?

In the case of what is a meme coin, you might be wondering how it managed to take the world by storm.

Simply, meme coins add a breath of fresh air to the often complex and advanced world of crypto and finance. From their catchy names to their absurd logos, meme coins are made to be fun and engaging. This “relatability” is what initially attracted the audience, especially crypto newcomers.

People began showing excitement toward meme coins on social media platforms like X and Reddit, with some jokes thrown in between.

Once meme coins start trending, FOMO (fear of missing out) quickly follows. This creates a community with a strong sense of belonging, where like-minded people – appreciators of both the internet culture and cryptocurrency – come as one.

It is not rare for retail investors to also jump on this bandwagon, sharing their tips on how to find new meme coins and advice on investments. But, it doesn’t stop there. The members often collaborate to intensify the “hype” around the token, which explains why the community continues to grow.

This scenario played out around 2021 in the Reddit community “Wallstreet Bets”, where members joked about how Dogecoin would reach the same price as GameStop’s (GME) stock.

The idea successfully caught on, and DOGE’s value surged to the moon, especially after the influence of Elon Musk. Let’s call this the “hype marketing” element of a meme coin. Moreover, meme coins have a low price per token, which means that even the smallest investors can buy a lot of them without spending too much. This also plays an important role in the popularity of the tokens.

So, let me summarize: what is a meme coin, and why is it so popular? One main factor is community marketing.

The movement around meme coins offers a sense of belonging, where people become part of a lively and entertaining community, sharing jokes and engaging with one another as they look into how to find the next meme coins.

This aspect of a meme coin is what makes it so distinctive, or what you may call a unique selling proposition (USP), that is hard to replicate by other categories of crypto coins.

Where to Trade Meme Coins?

At this point, you probably have more rounded insights on what is a meme coin. Maybe you’re now interested in how to trade meme coins? I suggest doing so on well-established crypto exchanges like Binance and Kraken.

	BINANCE	KRAKEN
Active Users	224M	10M
Acceptable Crypto Currencies	BTC ETH LTC XRP + 600 more	BTC ETH LTC XRP + 270 more
Fiat Currency Trading	USD/EUR + more	USD/EUR + more
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Table: Comparison of Binance VS Kraken.

As an example, I’ll show you step-by-step how to trade meme coins on Binance. Especially for beginners, you’ll find Binance’s user interface easy to navigate. It is also one of the highest-rated crypto exchanges, so you can enjoy peace of mind trading on a platform you can trust.

How to Buy Meme Coins?

First, let’s find out how you can buy meme coins.

Step 1: Open Binance. Sign up if you don’t have an account yet. There are also options for quick registration via Google or Apple ID.

Step 2: After you create an account, you’ll need to verify your identity. Remember, this is important to secure your account before you dive into the “how to trade meme coins” part. Start by choosing your residency.

Then, Binance will ask you to fill out your personal information (full name, date of birth, phone number, and ID card number) and go through a liveness check. Do note that your account might not be verified immediately, so you’ll have to wait a bit.

Step 3: Once your account is verified, you can proceed with how to trade meme coins. One of the best places where to buy meme coins on Binance is via the “Buy Crypto” feature, which allows you to buy crypto using fiat (credit/debit card). Just note that you might not find all the meme coins here, only the more popular ones.

Step 4: Here, you’ll be able to choose the meme coin you want to buy and the fiat currency you want to use for the purchase. Just enter the amount you’d like to purchase in your currency or the amount of crypto you want to get. Be aware there’s a minimum amount.

Step 5: Once you choose the meme coin and the fiat currency you want to buy it with, proceed with the payment. You can pay with a range of methods, including a debit/credit card, third-party payment channels, or P2P trading. Each method will probably have a different rate and fees, so pick the one that suits you best.

And that’s it for buying! But when you’re trading, knowing where to find meme coins alone isn’t enough, as you’ll also need to learn how to sell them.

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How to Sell Meme Coins?

The steps will be similar, but this time, when you’re on the “Buy and Sell” page, make sure to switch to “Sell”.

Step 1: Here, enter the amount that you’re going to sell, and the total balance you’ll receive will show up.

Step 2: You can sell your meme coins via bank transfers or P2P trading on Binance. Just choose the payment method you’re willing to accept from the buyer. You will also be charged some fees, depending on the payment method. 

If you choose to sell via P2P trading, just know that it’s an escrow service by Binance. However, your crypto will only be liquefied into cash once another user shows interest in buying your assets, so do your calculations carefully.

Finally! Now, you know where to buy meme coins and sell them. 

Are Meme Coins Safe?

When trying to understand what is a meme coin, the controversies around it often come up – specifically, whether it is a safe instrument to invest in. As I am not a financial expert, I will not give any advice. Instead, I will let you know the bigger picture of what is meme coin is and its safety.

I have touched on how the value of meme coins is highly unstable, as it’s largely tied to community hype, among other factors. To simplify complex concepts, when a meme coin makes a headline, its price will rise to the stars.

However, its stock can quickly drop to the ground once the promotions become more silent and the community loses interest.

The next thing you need to know regarding what is a meme coin is that most of these tokens have no tangible value or utility. Aside from Dogecoin and a few more examples, it’s highly rare for meme coins to be accepted as a form of payment for goods and services.

The world of meme coin itself is rather a slippery slope, filled with many scams, hacks, and pump-and-dump practices, or when a group of investors artificially inflate the coin price. They do this by spreading misleading recommendations and exaggerated claims for the sake of gaining massive traction.

Once this false narrative kicks in, the investors will immediately sell their overvalued meme coins, causing the stocks to crash. Some meme coins have been alleged in this notorious scheme, including the Wall Street Bets (WSB) Coin, SafeMoon, and the BULL coin.

So, what is a meme coin, and whether or not it’s a good bet of investment goes back to you as the crypto trader. Make sure to do a fair share of due diligence and consult with the right source if you have doubts before taking action.

The Future of Meme Coins

So now, with your knowledge of what is a meme coin, it’s normal to ponder: what comes next?

Here are some potential developments that you can anticipate in the trajectory of meme coins:

• The era of utility meme tokens. More meme coins are adopting utility-focused approaches. Shiba Inu and FLOKI are building their dedicated ecosystems, with plans ranging from NFT gaming and crypto education to a full-blown merchandise marketplace and token swapping through a DEX.
• Meme coins as a legitimate currency. More businesses worldwide will accept meme coins as payments. Dogecoin, for instance, is recognized as a form of payment by companies such as Tesla, Newegg, and Microsoft for select products and services.
• Higher-grade security for meme coins. Security is a priority—moreover so in the context of what is a meme coin. Aside from blockchain, integrations with advanced graphic techniques will safeguard meme coins from data theft and fraud.

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Conclusion

What is a meme coin is an interesting topic to explore, albeit there are some controversies. A meme coin is a digital coin or token that’s based on the internet culture, representing an animal, a character, or a famous personality.

Dogecoin was the first meme coin to be created, inspiring the development of many others, including the Shiba Inu token and PEPE coin. All of them share a red thread: they’re designed “for fun” and “as a joke”.

Consequently, meme coins often do not have utility value, and their performance is mainly driven by their popularity in the community and hype marketing through celebrity endorsements.

If you’re wondering where to buy meme coins, your best bet is using renowned crypto exchanges like Kraken or Bybit. Just remember, there are a lot of considerations to be made as meme coins can be a highly risky investment.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Stencel, A.: ‘What is a meme coin? Dogecoin to the moon!’;

2. Youasaf, I, et al.: ‘The connectedness between meme tokens, meme stocks, and other asset classes: Evidence from a quantile connectedness approach’.