Meme Coin vs. Altcoins: 5 Key Differences

What are Meme Coins?

Meme coins are cryptocurrencies that are created based on some popular internet memes or humorous characteristics, with no specific purpose or use case. They are created just for fun and entertainment purposes and hold no inherent value. However, they became quite popular in recent years capitalizing on the hype of the internet memes.

Being the first-ever meme coin, Dogecoin started the meme coin trend and today they became an inseparable part of the crypto ecosystem with billions of dollars worth market cap. Some of the top meme coins are Dogecoin (DOGE), Shiba Inu (SHIB), Pepe coin (PEPE), Bone ShibaSwap (BONE), etc. While most of these are started as memes, they are growing into actual cryptocurrencies with specific use cases.

For example, dog-themed meme coin Dogecoin is being used for making online payments and the second-best meme coin, Shiba Inu is building an entire ecosystem of protocols including a decentralized exchange, ShibaSwap, a layer2 blockchain, Shibarium, and SHIB metaverse.

Meme coins have also taken up various narratives such as AI meme coins and cat themed meme coins. With the increased adoption of Meme Coins, some of the recent meme coin presales have become immensely popular.

What are Altcoins?

Altcoins are all the alternative cryptocurrencies to Bitcoin. So, except for Bitcoin, every cryptocurrency can be referred to as an altcoin. In fact, meme coins are a part of altcoins but not vice versa. Some people in the crypto community prefer to call all cryptocurrencies, other than Bitcoin (BTC) and Ethereum (ETH), as altcoins.

The first-ever altcoin was “Namecoin” and it was created as a hard fork from Bitcoin, to insert data into the Bitcoin blockchain. The cryptocurrencies that exist today such as Litecoin (LTC), Bitcoin Cash (BCH), and Bitcoin Gold (BTG) are also the hard forks of Bitcoin. Other cryptocurrencies that have their own blockchain and were created with specific use cases such as Ethereum (ETH), Polkadot (DOT), Cardano (ADA), Ripple (XRP), are also altcoins.

Meme Coin vs. Altcoins: 5 Key Differences

As we discussed in the previous section, all meme coins are a part of altcoins but not all altcoins are meme coins. They share several key differences based on their origin, applications, underlying technology among other factors.

Purpose

Meme coins are created for entertainment purposes or to grab the attention of a particular section of people. Whether a particular meme coin grows to become a serious project depends on how strong their developer team and their community is. But the origin of meme coin creation is often random. On the other hand, altcoins have a specific purpose behind their creation, either to improve upon the existing limitations of blockchain or to bring new and innovative applications. 

Technology

Most of the meme coins that exist today are ERC-20 tokens, which is a fungible token standard on the Ethereum blockchain. They are often created on existing technologies like Bitcoin or Ethereum. But altcoins use innovative and advanced technologies as they aim to solve existing problems in blockchain and apply blockchain technology to optimize traditional digital infrastructure.  

Use Cases

Meme coins have limited to no real-world use cases. They are used for entertainment and for speculative trading or for tipping other users on social media. But, altcoins are created keeping specific real-world use cases in mind. For example, Ethereum is used for decentralized applications and Polkadot is used for enabling interoperability between different blockchains. 

Price Volatility

While cryptocurrencies are inherently volatile compared to other financial asset classes, meme coins take this to the next level. They are highly volatile and witness wild price swings compared to altcoins. The major reason behind this is meme coins prices are often driven by the hype around the meme and speculation, instead of their fundamentals. Altcoins have fundamentals based on which users invest in them. And, they are less volatile compared to meme coins. 

Community

Established meme coins such as Dogecoin and Shiba Inu have strong and loyal communities compared to altcoins. This is because, the origin and development of meme coins depends on how big the project can form a community. Meme coins cannot survive without community support. Communities of altcoins are often diverse and include different types of people who are interested in the project for a variety of reasons.