Differences between Memecoins and Altcoins
Since the advent of Bitcoin, the first ever cryptocurrency, the crypto industry has come a long way. While some cryptocurrencies emerged from the source code of Bitcoin, others have their own blockchain networks with specific use cases. Thousands of cryptocurrencies that exist today, besides Bitcoin, are called “Altcoins”. And one type of altcoins that are created based on the popularity of internet memes are known as “memecoins”. If you are confused and wondering how to differentiate memecoins from altcoins, this is the article for you. We will explore meme coins vs. altcoins here and discuss five key differences between them in detail. What are memecoins? Meme coins are cryptocurrencies that are created based on some popular internet memes or humorous properties, without any specific purpose or use case. They are created just for fun and entertainment purposes and have no inherent value. However, they became quite popular in recent years, capitalizing on the hype of internet memes. As the first ever meme coin, Dogecoin started the trend of meme coins and today they became an inseparable part of the crypto ecosystem with billions of dollars worth of market capitalization. Some of the top meme coins are Dogecoin (DOGE), Shiba Inu (SHIB), Pepe coin (PEPE), Bone ShibaSwap (BONE), etc. Although most of these are started as memes, they grow into actual cryptocurrencies with specific use cases. For example, the dog-themed meme coin Dogecoin is used to make online payments and the second best meme coin, Shiba Inu builds an entire ecosystem of protocols including a decentralized exchange, ShibaSwap, a layer2 blockchain, Shibarium, and the SHIB metaverse. Meme coins have also taken up various stories such as AI meme coins and cat-themed meme coins. With the increased adoption of Meme Coins, some of the recent meme coin sales have become immensely popular. What are Altcoins? Altcoins are all alternative cryptocurrencies to Bitcoin. So, apart from Bitcoin, any cryptocurrency can be called an altcoin. In fact, meme coins are part of altcoins but not vice versa. Some people in the crypto community prefer to call all cryptocurrencies, except Bitcoin (BTC) and Ethereum (ETH), as altcoins. The first ever altcoin was “Namecoin” and it was created as a hard fork of Bitcoin to insert data into the Bitcoin blockchain. The cryptocurrencies that exist today such as Litecoin (LTC), Bitcoin Cash (BCH) and Bitcoin Gold (BTG) are also Bitcoin hard forks. Other cryptocurrencies that have their own blockchain and were created with specific use cases such as Ethereum (ETH), Polkadot (DOT), Cardano (ADA), Ripple (XRP), are also altcoins.
Differences between Memecoins and Altcoins
| Meme coins | Altcoins | |
| Origins | Meme coins have their origins in internet culture and humor. | The origins of cryptocurrencies vary, with some concentrating on technology and finance, while others lean towards solving real-world problems. |
| Investment appeal | Meme coins became famous because of their fun and meme-worthy characteristics. | Traditional cryptocurrencies are valuable for their usefulness, security and long-term investment potential. |
| Risk assessment | Meme coins are speculative assets with high price fluctuations. | Traditional cryptocurrencies can also be volatile, although they usually have a more stable base. |
| Technology & Security | Meme coins may not prioritize these factors, making them vulnerable to manipulation and security issues. | Established cryptocurrencies rely on reliable blockchain technology, ensuring security and efficiency. |
As we discussed in the previous section, all memecoins are part of altcoins but not all altcoins are mem coins. They share several key differences based on their origin, applications, underlying technology among other factors.
Purpose
Meme coins are created for entertainment purposes or to capture the attention of a certain section of people. Whether a particular meme coin grows to become a serious project depends on how strong their developer team and their community are. However, the origin of meme coin creation is often random. On the other hand, altcoins have a specific purpose behind their creation, either to improve the existing limitations of the blockchain or to bring new and innovative applications.
Technology
Most of the meme coins available today are ERC-20 tokens, which are a fungible token standard on the Ethereum blockchain. They are often created on existing technologies like Bitcoin or Ethereum. However, altcoins use innovative and advanced technologies as they aim to solve existing problems within the blockchain and apply blockchain technology to optimize traditional digital infrastructure.
Areas of use
Meme coins have been restricted to no real-world uses. They are used for entertainment and for speculative trading or for tipping other users on social media. But altcoins are created with specific real-world use cases in mind. For example, Ethereum is used for decentralized applications and Polkadot is used to enable interoperability between different blockchains.
Price volatility
While cryptocurrencies themselves are volatile compared to other financial asset classes, meme coins take this to the next level. They are highly volatile and witness wild price swings compared to altcoins. The main reason for this is that the prices of meme coins are often driven by the hype surrounding the meme and speculation, instead of their fundamentals. Altcoins have fundamentals based on which users invest in them. And they are less volatile compared to meme coins.
Community
Established memecoins such as Dogecoin and Shiba Inu have strong and loyal communities compared to altcoins. This is because the origin and development of meme coins depends on how large the project can form a community. Meme coins cannot survive without community support. Communities of altcoins are often diverse and include different types of people who are interested in the project for different reasons.
Conclusion
Meme coin vs altcoins and their differences are worth paying attention to, for making investment decisions. While people trade meme coins for speculation and to make short-term profits, they invest in altcoins to support the project and make long-term profits. Meme coins are highly volatile and have no real-world use cases, which is not the case with altcoins. Whatever cryptocurrency you choose to invest in, don’t forget to do your own research!
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