As a crypto noob, one thing I find confusing at a glance is what value the meme coins propose versus the more established assets like bitcoin. So basically it comes down to making a project that only accepts payment in the form of a specific meme coin? So speculation on the meme coin is basically speculation on the value of being able to interact with the project? Is it also just collectorship where people just like the culture and fundamentally want to own those things (regardless of any benefits the technology/usage of the coins have as a store of value)? Do these grift (or not grift) projects typically accept any payments through other methods? Outside of the projects, are people able to use meme coins for arbitrary use cases if they wanted to create a community around it? Sorry if these thoughts are a bit scattered.
(To preface, I used a memecoin as the example in the article because memecoins are the most obvious grifts. But I would say _most_ cryptocurrencies follow the format I describe, including many with relatively legitimate projects.)
> So basically it comes down to making a project that only accepts payment in the form of a specific meme coin?
Usually, the project has some mechanism which creates buying pressure on the cryptocurrency. Accepting payment in the form of the project's cryptocurrency is one way of doing that. Other common methods include:
- Having the project's revenues go towards buying back the project's cryptocurrency. (This creates an incentive for people to buy beforehand.)
- Creating mechanisms for parts of the cryptocurrency's supply to be destroyed, which reduces supply and thereby increases the price of the remaining.
- Having a percentage of the cryptocurrency's transactions (especially sells) go to existing holders, which concentrates the supply in those who hold a lot of early and don't sell.
> So speculation on the meme coin is basically speculation on the value of being able to interact with the project?
This is the claim which is supposed to add a veneer of credibility to the cryptocurrency's valuation. However, it ends up being a pretty shaky claim when the cryptocurrency's valuation is far higher than any reasonable valuation of the project would suggest. A friend of mine who's a crypto speculator laments when projects release their revenues, because it usually brings their associated cryptocurrency prices down to reality.
> Is it also just collectorship where people just like the culture and fundamentally want to own those things (regardless of any benefits the technology/usage of the coins have as a store of value)?
Often yes, especially for memecoins which are transparently worthless, like DogeCoin. Holders feel like they're part of a community, and if they convince others to buy, the value of their own coins increases. (This is otherwise known as a Ponzi scheme.)
> Do these grift (or not grift) projects typically accept any payments through other methods?
As discussed above, accepting payment in the form of the project's cryptocurrency is just one way of doing it. But if the question is rephrased to "can one access the full value of the project without buying any of the project's accompanying cryptocurrency?", the answer is typically no. That's the point of the project!
> Outside of the projects, are people able to use meme coins for arbitrary use cases if they wanted to create a community around it?
Yes, and many do! For example, DogeCoin was originally created as a joke, and I don't consider its original creators to be grifters. But now, my understanding is that there are several community-led DogeCoin projects.
As a crypto noob, one thing I find confusing at a glance is what value the meme coins propose versus the more established assets like bitcoin. So basically it comes down to making a project that only accepts payment in the form of a specific meme coin? So speculation on the meme coin is basically speculation on the value of being able to interact with the project? Is it also just collectorship where people just like the culture and fundamentally want to own those things (regardless of any benefits the technology/usage of the coins have as a store of value)? Do these grift (or not grift) projects typically accept any payments through other methods? Outside of the projects, are people able to use meme coins for arbitrary use cases if they wanted to create a community around it? Sorry if these thoughts are a bit scattered.
(To preface, I used a memecoin as the example in the article because memecoins are the most obvious grifts. But I would say _most_ cryptocurrencies follow the format I describe, including many with relatively legitimate projects.)
> So basically it comes down to making a project that only accepts payment in the form of a specific meme coin?
Usually, the project has some mechanism which creates buying pressure on the cryptocurrency. Accepting payment in the form of the project's cryptocurrency is one way of doing that. Other common methods include:
- Having the project's revenues go towards buying back the project's cryptocurrency. (This creates an incentive for people to buy beforehand.)
- Creating mechanisms for parts of the cryptocurrency's supply to be destroyed, which reduces supply and thereby increases the price of the remaining.
- Having a percentage of the cryptocurrency's transactions (especially sells) go to existing holders, which concentrates the supply in those who hold a lot of early and don't sell.
> So speculation on the meme coin is basically speculation on the value of being able to interact with the project?
This is the claim which is supposed to add a veneer of credibility to the cryptocurrency's valuation. However, it ends up being a pretty shaky claim when the cryptocurrency's valuation is far higher than any reasonable valuation of the project would suggest. A friend of mine who's a crypto speculator laments when projects release their revenues, because it usually brings their associated cryptocurrency prices down to reality.
> Is it also just collectorship where people just like the culture and fundamentally want to own those things (regardless of any benefits the technology/usage of the coins have as a store of value)?
Often yes, especially for memecoins which are transparently worthless, like DogeCoin. Holders feel like they're part of a community, and if they convince others to buy, the value of their own coins increases. (This is otherwise known as a Ponzi scheme.)
> Do these grift (or not grift) projects typically accept any payments through other methods?
As discussed above, accepting payment in the form of the project's cryptocurrency is just one way of doing it. But if the question is rephrased to "can one access the full value of the project without buying any of the project's accompanying cryptocurrency?", the answer is typically no. That's the point of the project!
> Outside of the projects, are people able to use meme coins for arbitrary use cases if they wanted to create a community around it?
Yes, and many do! For example, DogeCoin was originally created as a joke, and I don't consider its original creators to be grifters. But now, my understanding is that there are several community-led DogeCoin projects.