How does Memecoin work?

Memecoin is a token-based cryptocurrency that is built on a blockchain. These coins are created out of an internet meme or current event or to represent an animal or other living and nonliving thing. Although meme coins are a good way to start investing in cryptocurrency, they have their pros and cons.

1. What's memecoin?

Meme coins are tokens created via a project and by a group of blockchain developers that represent a popular internet meme, current events, animals, or other living or nonliving things. For example, the meme coin Freedog and Resistance Dog ($REDO) were formed as a result of the detainment of the founder of Telegram in France.

$DOGS, a recent token launched on the TON blockchain, was formed from an animal, and so is CATDOG. On the Telegram ecosystem, there are also tokens referred to as Banana representing a fruit. This meme coin on the TON ecosystem, as well as other blockchains, has become a source of investment for many individuals interested in investing in cryptocurrency or as an additional income stream.

For example, those who mined the Notcoin tap to earn a game were able to earn some dollars just by clicking an icon on their phone. However, with thousands of meme coins plying on the various platforms, many of them can be a scam project. 

2. Pros of Meme coin

The following are some of the advantages of meme coin mining, farming, or investing in them.

2.1 Very affordable

They are affordable compared to their base platform coins. For example, the recent price of $TON coin is at 5 USDT but that of $DOGS is 0.001 USDT. Therefore, if you are starting out investing in cryptocurrencies, you may consider Memecoins. (This is not a financial/investing advice)

2.2 Potential growth

Most of them have growth potential. This implies that you buy them at lower prices now and sell them at higher value in the future. Therefore, making capital gains from your previous acquisition.

2.3 Easy to farm

Certain meme coins can be owned without spending any money. They are farmed daily and at the time of their TGE, a portion of the total market share of the token is allocated to the farmers referred to the community. 

2.4 Serves as an additional income

Farming meme coins can serve as an additional income source for people. Some individuals have made millions of dollars from doing so.

2.5 Community-based

Meme coins are mainly community-based. Therefore, project owners can use the community to earn from their project using its life cycle. 

3. Cons of Meme coin

There are many projects out there that have the potential to provide earnings to people interested in cryptos and Web 3. However, it might be difficult to spot scammers and hackers who might create projects to defraud people. Therefore, if you're actively engaging with meme coins, then you must be careful not to involve yourself in projects whose owners are scammers.