As a seasoned analyst with years of observing the crypto market, I have seen the rise and fall of various trends, from initial coin offerings (ICOs) to decentralized finance (DeFi). Each trend presents unique opportunities and challenges, but none quite like meme coins.
Previously, Binance‘s ex-CEO Changpeng ‘Cz’ Zhao voiced his disapproval towards the increasing popularity of meme tokens, emphasizing that it would be more beneficial for blockchain developers to concentrate their efforts on projects centered around functionality.
In a recent post on November 26th, Zhao stated that meme coins are starting to seem somewhat peculiar. He encouraged developers to instead concentrate on developing “genuine applications” with practical use cases, as opposed to giving priority to projects driven by hype.
Comments by CZ (Changpeng Zhao) have sparked a renewed discussion on the excitement surrounding meme coins, highlighting the concern that these digital assets may not possess significant real-world worth.
As a researcher delving into the world of digital currencies, I’ve observed that meme coins predominantly thrive on viral advertising and social media hype to ignite temporary investor enthusiasm. These coins can indeed yield immediate profits for a few, but they often fall short when it comes to practical use or substantial applications. Consequently, the majority of investors end up suffering substantial losses as the initial buzz subsides.
In the midst of the ongoing debate about Pump.fun, a meme coin deployment platform built on Solana, it’s important to note that recent issues have arisen concerning a livestream feature designed to increase user interaction. Unfortunately, this feature has been misused in distressing ways, such as through the dissemination of threats of self-harm and inappropriate content.
A distressing event unfolded where a user expressed they would consider suicide if their digital token didn’t achieve a specified market value. Matters worsened as this person subsequently posted a video that appeared to depict them carrying out the threat.
The worry about meme coins goes beyond just their problematic use on certain sites. As a CoinWire study showed, meme coins advertised via social media, especially on platform X, often see a decline of 90% or more in value within a span of three months.
These kinds of patterns can erode faith in the entire crypto market, shifting focus away from initiatives that offer real value and progress, and fostering doubt among prospective users and authorities regarding the industry’s future stability.
Many influential people within the field have voiced criticism towards meme coins due to their apparent lack of practical use and significant impact on the digital currency market. For instance, Ripple‘s CEO, Brad Garlinghouse, has contended that tokens such as Dogecoin do not provide valuable real-world applications.
In a similar vein, Vitalik Buterin, a key figure in Ethereum‘s creation, voiced his criticism towards meme coins backed by celebrities just recently.
In a June blog post, Buterin emphasized that financialization should be considered valuable to society, using instances like healthcare and open-source software as demonstrations where blockchain technology can yield social advantages.
Utility-driven blockchain initiatives form the foundation of the industry’s long-term viability.
Examples like Axie Infinity, where gamers can generate income from their gameplay, and Fetch.ai, a blockchain token powering automated machine-to-machine interactions, demonstrate the practical solutions that blockchain technology offers in tackling real-life issues and transforming conventional sectors.
As per information from CoinGecko, the collective market value of meme coins now stands at a staggering $120.27 billion, surpassing industries such as GameFi ($24.1 billion) and artificial intelligence-centric tokens ($39 billion) in size.
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2024-11-26 12:34