Beware the memecoin promise of riches
There are numerous stories in the crypto media of people making significant profits from investing in meme coins like Doge or Shiba Inu. More recently investors of Pepe have spoken about record profits from their initial investment. But just how realistic is it to make good money from what essentially has been designed as a joke? Lets find out.
A meme coin is a cryptocurrency that is based on a joke or meme and uses that principle as its core marketing feature. Hardly a serious investment you might think. However, the power of social media shows us that once things gain traction then almost anything is possible.
In early 2021 Dogecoin rose from $0.01 per coin to an all time high of $0.56 less than a year later, largely thanks to an endorsement from Twitter chief Elon Musk. This incredible return on investment made many people sit up and take notice and has led to a raft of imitators to be produced in its wake.
Pump and dump
Unlike mainstream cryptocurrencies, meme coins are commonly used for trading and short term investing and have little to no utility. This is crucial to understanding how investors in meme coins like Pepe can lose profits just as quickly as they are made. To the untrained eye which doesn’t keep up with the latest Twitter trend or Reddit hype, it is all too easy to fall for the news stories which tell you this coin will return amazing profits over the medium to long term. The reality is that coins like Pepe or Doge are distributed to early investors in order to be dumped on unsuspecting retail buyers much later, often when crypto hype is at its peak.
Anyone with an ounce of common sense knows that investing is not a subject to be trifled with and any decisions need to be carefully thought out. Indeed, many successful investors plan their exit strategy before they enter a position. This helps take away any emotion and allows the investor to operate with a cool head and even colder hands. Mainstream media and hype are often ‘top’ signals and an indication for early investors to begin to sell.
There is a growing opinion that long awaited and wide ranging crypto legislation will seek to protect investors by outlawing tokens with little to no use case such as coins like Pepe. As educated as the average crypto investor is, there are still a number of unwitting folk new to the space that continue to fall for this classic pump and dump scheme. If this industry is to gain further mainstream legitimacy, it is essential that such projects are outlawed.
Real world utility
One of the most assured ways to make money from cryptocurrency is to invest in long term and sustainable projects which have real world utility rather than those that are hyped. As the blockchain industry continues to evolve we are witnessing a natural evolution of the market and those projects with a working and utilised product with real world customers are the ones which will be left standing after all the dust has settled.
Projects such as VeChain, which are revolutionising the supply chain industry or Render which is changing the way digital artists distribute and get paid for their work, are prime examples of how Web3 technologies are providing a better and fairer future for all of us.
Here at Project Lambo we are proud of our core principles and our ongoing mission toward fostering and improving community inclusion. We are not only working to revolutionise blockchain gaming but we are determined to make our platform a cause for social good. Alongside initiatives for enhanced education and social mobility, we have integrated the very latest AI technology that means our games are not only fun to play but rewarding and informative at the same time.
As the benefits of distributed and shared technologies become ever apparent, more and more people are beginning to realise that when used properly this nascent technology has the power to radically change society for the better. Furthermore, as much as Bitcoin and Ethereum appear to be ‘old news’ it is clear from the adoption curve that we are still very early in the development of this industry.
As we progress through the decade it will become more and more evident that the image of the cryptocurrency fraud or scam is not what this technology was intended to be used for. However with meme coins like Pepe and Doge continuing to generate eye popping headlines it may take some time yet before we are a distance from all the negative associations these projects bring with them. It is therefore essential for anyone looking to invest in the long term future of Web3 to consider how and where they are going to allocate their resources.
The benefits of blockchain technology are far reaching and well known. Ten years from now it will be those projects which have written sustainable principles into their core protocol design which will be reaping the rewards of an ever maturing market. It goes without saying therefore that the chances that a meme coin will be leading the charge will be very slim indeed.
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