Meme coins such as Dogecoin and Shiba Inu have gained much popularity in recent years largely due to their low price and the significant media and social media hype. They are often referred to as “meme coins” because they were created as a joke or for fun, and their values are primarily derived from internet trends and memes. On the other hand, traditional cryptocurrencies like Bitcoin were created with the serious intention of potentially replacing or complementing traditional centralised banking systems.
There are several factors which differentiate these two categories of cryptocurrencies:
1. **Foundation and Intention**: Bitcoin was the first cryptocurrency created, with the initial intention of decentralizing money and removing it from the control of governments and banks. Meme coins, on the other hand, were not created with such serious considerations or transformational purposes.
2. **Market Value**: As of 2021, Bitcoin holds the highest market capitalization among all cryptocurrencies, and it continues to stand as the default trading pair for the crypto market. Meanwhile, Dogecoin and Shiba Inu, although having momentous spikes due to social media hype, have considerably lower market capitalizations and are not as widely accepted for transactions as Bitcoin.
3. **Technical Aspects**: Bitcoin’s blockchain technology is more robust as it uses the proof-of-work model. Dogecoin and Shiba Inu, while also underpinned by blockchain technology, do not offer the same level of innovation. Bitcoin’s limits on supply issuance (21 million coins) can lead to more predictable market dynamics, whereas dogecoin has no maximum limit which could potentially lead to inflation.
4. **Price Volatility**: Due to its meme status and dependence on social media trends, meme coins tend to be much more volatile compared to traditional cryptocurrencies. They often see drastic price changes – both surges and dips – which can make them high-risk investments.
5. **Utility and Acceptance**: Bitcoin has wider acceptance as a form of payment with more and more companies accepting it for transactions. Dogecoin and Shiba Inu have less utility and are generally held for speculative reasons.
In summary, Bitcoin and other traditional cryptocurrencies were created to solve real-world problems and have developed substantive use cases over time. In contrast, meme coins originated from internet culture and their values are largely influenced by social media trends and speculation. While they have the potential to generate massive short-term gains, they can be incredibly volatile and there are serious questions about their long-term viability. As with all investments, it’s important to conduct thorough research and consider your risk tolerance.
