Donald Trump launches new meme coin - what is it and how does cryptocurrency work?
President-elect of the US, Donald Trump has entered the cryptocurrency world, launching his own meme coin on Friday, which ignited a frenzy of buying and reportedly propelled its market capitalization to several billion dollars.
Taking to his Truth Social platform and X, Trump introduced the new coin, designed to leverage the appeal of a prominent personality, movement, or viral internet trend.
"My NEW Official Trump Meme is HERE! It's time to celebrate everything we stand for: WINNING!" he declared.
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Unlike traditional cryptocurrencies, meme coins are typically created for speculative trading and hold no intrinsic economic or transactional value. However, they often gain traction by tapping into cultural or social phenomena.
The coin's official website hails it as a tribute to unwavering leadership. "This Trump Meme celebrates a leader who doesn't back down, no matter the odds," the site proclaims.
Incoming First Lady Melania Trump has also joined the cryptocurrency trend, launching her own digital coin just ahead of her husband’s inauguration as U.S. president.
"The Official Melania Meme is live! You can buy $MELANIA now," she announced on the social platform X on Sunday.
The "Official Melania Meme" website explains that the coin is a crypto asset created and tracked on the Solana blockchain.
Disclaimers on the official websites for both the $Trump and $Melania coins make it clear that these tokens are "not intended to be, or the subject of, an investment opportunity or a security."
According to CoinMarketCap, the $Trump coin currently boasts a market valuation of approximately $12 billion (£9.8 billion), while $Melania's coin holds a valuation of around $1.7 billion.
Interestingly, Donald Trump, who once dismissed cryptocurrency as a "scam," reversed his stance during the 2024 presidential campaign, becoming the first candidate to accept digital assets as donations.
What is cryptocurrency and how does it work?
Cryptocurrency, often referred to as "crypto," is a digital form of currency like Bitcoin, used either as an alternative payment method or a speculative investment.
The term "cryptocurrency" comes from the cryptographic techniques that ensure secure transactions without the need for central authorities like banks or governments.
At the heart of cryptocurrencies is blockchain technology, which creates a tamper-proof record of transactions and tracks ownership.
This addresses a significant challenge faced by earlier attempts at digital currencies, which was preventing individuals from duplicating their holdings and spending them twice.
Cryptocurrency units are often called coins or tokens, with their uses varying. Some function as a medium of exchange for goods and services, while others serve as stores of value.
Certain tokens are also used to engage in specific software applications, such as games or financial platforms.
What exactly are meme coins?
Meme coins are a unique form of cryptocurrency or digital asset that draw inspiration from viral internet memes and trends. Often named after popular characters, animals, or individuals dominating social media, these coins thrive on online hype, pop culture, and social media buzz.
What sets meme coins apart is their quirky and playful imagery, inspired by internet memes, which appeals to a wide range of investors. Ownership is ensured through private keys, adding a layer of security for holders.
Among the most popular meme coins are Dogecoin, championed by Trump ally Elon Musk, and Shiba Inu, both of which have gained massive followings and widespread recognition.
How do meme coins work?
Like other cryptocurrencies, meme coins are highly volatile and speculative, with their value heavily influenced by trends and internet chatter.
They are created using blockchain technology, which securely stores and shares data across a decentralized network. The tokens themselves are hexadecimal numbers stored within the blockchain, enabling seamless transactions.
Advantages of meme coins
Meme coins offer a fun and engaging way to explore cryptocurrency and blockchain technology, making them an appealing choice for beginners eager to learn about digital assets.
Compared to most other cryptocurrencies, meme coins are typically more affordable, making them accessible to a wider range of investors and providing a low-cost entry point into the crypto market.
Disadvantages of meme coins
Meme coins are highly volatile and heavily influenced by speculation and trends, making them an inherently risky investment option.
These digital assets lack intrinsic value, serving no real-world purpose beyond being tokens for trading or speculative activities.
With limited global regulation surrounding meme coins, the potential for scams remains high, posing significant risks for investors seeking security and transparency in their investments.
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