TL; DR

Memecoins are cryptocurrencies which are based on popular memes and they do not have intrinsic values or specific use cases.

DogeCoin, Shiba Inu, Floki Inu and PEPE meme coin are examples of Memecoins.

Memecoins can become a form of currency if people and businesses accept and adopt them.

Crypto regulation is also necessary if Memecoins are to become a dependable means of payment.

Introduction

There are various digital assets based on the blockchain that are on the market right now. These include non-fungible tokens (NFTs) and different categories of cryptocurrencies like stablecoins, crypto securities and memecoins. Most of these cryptocurrencies can be used as a means of payment for goods and services.

The main focus of this article is to discuss whether or not people can use Memecoins as a means of payment for goods and services. We will also explore ways in which institutions can integrate Memecoins into mainstream payment s. First off, let’s explain what Memecoins are and how they started.

What are Memecoins?

Memecoins are cryptocurrencies that have been created based on popular memes that exist on various social media platforms such as Twitter and Facebook. Since large communities support them, they become very popular when people launch them on the market. However, their appeal may diminish with time when the associated hype decreases.

Right now, several Memecoins have grown in value and have large market capitalizations. In most cases, celebrities support Memecoins, a reason that makes them very popular in the market. For instance, Elon Musk, Twitter’s current owner and the richest person in the world once popularized Doge Coin (DOGE) and Shiba Inu (SHIB).

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However, most Memecoins lack underlying utility which make them prone to high price volatility. In other words, most of them do not have clear use cases. As a result many investors buy meme coins to become members of certain communities such as the Doge community.

Investors may also generate profit by capitalizing on their high price volatility. In fact, investors purchase them when their values are low and sell them when their prices have risen to certain desired levels. However, a critical question remains: Can Memecoins serve as real currency.

How Did Memecoins Start?

Memecoins started in 2013 when two software engineers Billy Markus and Jackson Palmer developed and launched Dogecoin as an alternative to existing cryptocurrencies, in 2013. Primarily, it was designed to mock existing coins that include Bitcoin and ETH. For many people, DogeCoin is a fun and user-friendly internet currency.

Nevertheless, soon after its launch on 6 December 2013 the DogeCoin became very popular within the crypto community. In fact, millions of crypto users acquired it within a short period raising its value and market capitalization.

There was also a notable event that made the Doge coin even more popular than expected. On 25 December 2013, the Dogewallet was hacked and many community members lost their Doge coins. Notably, the hacking incident made the coin more popular than before as it attracted international attention.

By 2017, the DogeCoin had a market capitalization of over $1 billion and in 2020 Elon Musk posted various tweets which drew much attention to the cryptocurrency. As a result, many people became aware of Memecoins which led to the development of similar coins like Shiba Inu and DogeCash, among others.

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Examples of Popular Memecoins

As said, many meme coins have been launched since 2020. Just like other cryptocurrencies these Memecoins are listed on various crypto exchanges like Gate.io, Binance and Coinbase. Apart from the popularity of Doge Coin, Shiba Inu, whose focus was to ridicule DOGE, came on the market. Later DogeLon Mars, Floki Inu, MonaCoin, Kishu, Hoge Finance, Samoyedcoin and SafeMoon were launched. If you want to buy most of these Memecoins you can visit Gate.io exchange.

examples of Memecoins - Cryptoreporter

Are Memecoins Suitable to be a Means of Exchange?

Now that we have discussed what Memecoins are, let’s find out if they are suitable to be a means of exchange.

There are people who believe that Memecoins, like other cryptocurrencies, can be used as a means of payment due to their decentralized nature. Cryptocurrencies are decentralized because users have control over them and use them as they like. They also leverage the blockchain, meaning that transactions are secure and recorded on the public ledger. In most cases, Memecoins, like other cryptocurrencies, are resistant to hacking and other cybercrimes.

However, there is one great dark side of Memecoins which make them less suitable to be a form of currency. Most Memecoins are very volatile as their prices may fall or rise sharply within a short period. This is against one of the attributes of money which is price stability. A good means of payment should have a stable value over a long period to avert inflation.

Since the value of Memecoins are mainly derived from their communities they are prone to market manipulation by certain investors especially crypto whales. However, the government can resolve that weakness through proper regulation and market oversight. Sadly, overregulation may obstruct innovation and inhibit market growth.

Comparison of Memecoins and Traditional Currencies

We can best assess the suitability of memecoins as a form of currency by comparing them to traditional currencies such as the United States dollar or pound.

Memecoins have many advantages over fiat currencies such as decentralization. Like other cryptocurrencies, Memecoins are not controlled by a single entity and there is no need for intermediaries to facilitate transactions. They have the potential to become a good means of payment since they enable fast and low-cost transactions across geographical borders.

The blockchain also ensures that all transactions using Memecoins are recorded and permanently documented for future reference. This distributed ledger also prevents tampering and unauthorized access to such digital currencies.
However, in comparison to traditional currencies the main disadvantage of Memecoins is high volatility which may disturb the price . Memecoins do not maintain stable values over long periods in a manner similar to fiat currencies. High price fluctuations may distort the price s which reduces market confidence. If the medium of exchange is volatile businesses and households find it difficult to budget their funds.

On the contrary, fiat currencies maintain stable values over long periods owing to government regulation and oversight. Usually, central banks craft strategies to maintain the stability of fiat money which guards it against inflation and other malpractices. For instance, the government may institute measures to reduce the supply of money at any time.

There is also little chance that individuals and large corporations may manipulate the value of money. Although some blockchains may use the mint and burn mechanisms they are not as effective as government controls and oversight.

Also, the fact that the blockchain technology may evolve with time makes it difficult to assure the market that the Memecoins will maintain their current architecture.

It is also important to note that most Memecoins have low levels of adoption as they are not internationally acceptable. Only a few shops and businesses accept them as a means of payment. Therefore, many individuals and businesses prefer fiat currencies over memecoins and other cryptocurrencies.

Again, Memecoins have scalability challenges due to the limitations of their blockchain s. For example, when the number of users at a certain time increases the networks may become congested and slow down. During that period the costs of transactions may rise significantly. This hampers the usability of Memecoins and affects their dependability as a form of currency.

Integration of Memecoins into the Mainstream Payment s

For individuals and businesses to accept Memecoins as a means of payment they should be integrated into the existing payment s. However, there should be incentives for businesses to do so.

Also, there should be various channels for people to convert Memecoins to cash in a secure and user-friendly manner. For example, we should have payment processors which can convert Memecoins to fiat currency at point of sale. This may involve integrating Memecoin wallets into existing payment s such as PayPal and Venmo.

As you can see, it is important for financial institutions, Memecoin developers, payment processors, merchants as well as customers to work together to integrate Memecoins into a viable payment . In addition, there is a need to have Memecoin debit cards which retail outlets accept in a way similar to fiat debit cards.

Ethical Considerations Associated with the Utilization of Memecoins as a Form of Currency

In addition to the factors that inhibit the adoption of Memecoins that we discussed above, there are also ethical considerations.

The fact that Memecoins do not have intrinsic value or specific use cases raises ethical concern about their suitability as means of payment. Since community excitement and hype may determine their values, influential people can manipulate the market.

The environmental impact of Memecoins also raises a special concern. Many Memecoins are secured through crypto mining which consumes much energy and computing power. As such, they can negatively impact the environment.

Another societal concern is that some people may use Memecoins to fund illegal activities such as terrorism as well as human and drug trafficking. It is very easy for people to commit such criminal activities because of the lack of crypto regulation and the anonymous nature of the transactions.

Lastly, Memecoins may lead to economic inequality. The reason is that people with a lot of money can trade them and generate much profit. Therefore, the poorer members of the society who lack the knowledge and financial resources to benefit from trading Memecoins may remain relatively financially disadvantaged.

Final Thought

Memecoins are cryptocurrencies which do not have intrinsic value. Therefore, many people use them for speculative purposes. DogeCoin was the first cryptocurrency which was launched in 2013 and has a large community of followers. Shiba Inu, Floki Inu and PEPE meme coin are other popular Memecoins.

It is possible to use Memecoins as a form of currency if they are widely accepted by customers and businesses. Meme coins to buy are available at various crypto exchanges including Gate.io.