The Differences in Memecoins and Digital Assets

Cryptocurrency and Digital Assets are seen in the same light, but hold many different characteristics (speed, scalability, cost per transaction, and use-case or utility). When researching, look for business relationships created to solve real-world financial problems.

Just like squares and rectangles, all Digital Assets are Cryptocurrencies, but not all Cryptocurrencies are Digital Assets. Cryptocurrencies can fall under Memecoins or NFT’s (Non-Fungible Tokens), and payment processing tokens (which would be a digital asset).

“A crypto asset is a cryptographically secured digital representation of value.” (Wirexapp 2021)

Crypto can be very ambiguous, and not all actors are good actors. Chances are your “shitcoin” is not “going to the moon” because the lack of utility it brings to society.

Memecoins are exactly what they sound like. An internet meme became popular, they turn that meme into a digital coin or NFT, and people on the internet banded together adding money to a liquidity pool. This is where “rug pulls” happen.

An early investor or developer having a significant position in a Memecoin has the ability to sell off and diminish the market cap. Which leads to people losing a lot of money and stuck in something that has no inherent value.

“Meme coins are cryptocurrencies inspired by Internet memes, jokes, and satire. They have meme-inspired branding, logos, and names and are often not designed to have any specific use cases.” (Lepcha 2024).

Think of Memecoins like baseball cards. Some may find value or gain popularity, but this is much like gambling or hoping for the best without proper research. Some companies are solving real financial problems, with real companies.