Altcoins Vs. Memecoins 2024: Understanding the Differences in 2024

Since the introduction of Bitcoin in 2009, the cryptocurrency industry has experienced significant growth and evolution. While some cryptocurrencies have originated from modifications of Bitcoin's code, many others have established their own unique blockchain networks tailored to specific purposes. Apart from Bitcoin, there is a wide range of cryptocurrencies, commonly called "altcoins." Among them is a category of altcoins inspired by popular internet memes known as "meme coins." These meme coins, with their unique origins and strong community-driven nature, have gained attention for their appeal and value in the crypto world. 

Understanding the differences between a meme coin and an altcoin is crucial for making informed decisions in the crypto market. This blog post is designed to provide that understanding. Here, we will discuss meme coins vs. altcoins in detail and examine the five main differences between them, highlighting the unique origins and strong community-driven nature of meme coins that contribute to their appeal and value.

Altcoins, short for "alternative coins," refer to all cryptocurrencies other than Bitcoin. This category includes a wide range of digital currencies that are not Bitcoin, including Ethereum and meme coins. It's important to note that while meme coins are considered a subset of altcoins, not all altcoins are meme coins. In fact, some individuals in the crypto community categorise all cryptocurrencies, except for BTC and ETH, as altcoins.

The concept of altcoins emerged with the creation of "Namecoin," the first cryptocurrency to separate from Bitcoin's codebase. Namecoin was designed to enable data insertion into the Bitcoin blockchain, effectively serving as an alternative. Subsequently, various other cryptocurrencies, including Litecoin (LTC), Bitcoin Cash (BCH), and Bitcoin Gold (BTG), have been introduced as hard forks of Bitcoin, each with its own unique features and modifications.

In addition to hard forks, numerous altcoins have been developed independently with their own blockchains and specific use cases. Notable examples include Ethereum (ETH), which introduced smart contract functionality; Polkadot (DOT), which focuses on interoperability; Cardano (ADA), which emphasizes sustainability and scalability; and Ripple (XRP), which is designed for cross-border payment solutions.

Meme coins, also known as meme cryptocurrencies, are digital currencies that derive their names and characteristics from popular internet memes or comedic concepts. Unlike traditional cryptocurrencies, meme coins are typically created without a specific use case or purpose and are often designed purely for amusement and entertainment. As a result, they generally lack intrinsic value and are not intended for serious financial transactions.

Despite their seemingly unserious nature, meme coins have gained significant popularity in recent years, largely due to the widespread appeal of internet memes and the culture surrounding them. These coins have capitalized on the internet meme phenomenon, attracting a dedicated community of supporters.

The emergence of Dogecoin as the original meme coin sparked a significant trend within the crypto world, resulting in the expansion of numerous meme coins with substantial market capitalizations. Some of the prominent meme coins include Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe coin (PEPE). Although these coins originated as unconcerned memes, they have evolved into legitimate cryptocurrencies with defined use cases, underscoring their growing relevance within the broader crypto ecosystem.

1. Purpose of the Coin

Meme coins are designed to attract a specific group of individuals. The strength of its developer team and community determines whether a meme coin can evolve into a serious project. However, the beginning of meme coin creation is frequently random. In contrast, altcoins are created with a particular objective in mind, aiming to either enhance the current constraints of blockchain technology or introduce new and creative applications.

2. Technology 

The majority of the meme coins available today are built as ERC-20 tokens sticking to a standard for fungible tokens on the Ethereum blockchain. These tokens are frequently developed using pre-existing technologies such as Bitcoin or Ethereum. However, altcoins differentiate themselves by leveraging innovative and advanced technologies with the goal of addressing existing issues within blockchain technology and improving traditional digital infrastructure through the application of blockchain technology.

3. Uses

Meme coins usually lack practical, real-world use and are mainly utilised for entertainment, speculative trading, or tipping users on social media platforms. On the other hand, altcoins like Ethereum and Polkadot are engineered with specific real-world applications in mind. For example, Ethereum functions as a foundation for constructing decentralised applications, while Polkadot strives to enable interoperability among different blockchains.

4. Price Volatility 

Cryptocurrencies are generally more unstable compared to other types of financial assets, but meme coins take this instability to a higher level. They experience extreme price fluctuations and are much more volatile than alternative cryptocurrencies. The primary reason for this is that the value of meme coins is often influenced by the excitement surrounding the meme and speculation, rather than their underlying value. Alternative cryptocurrencies have a more solid foundation that investors use to support their investment decisions, making them less susceptible to extreme price swings compared to meme coins.

5. Community

Established meme coins like Dogecoin and Shiba Inu have dedicated and robust communities compared to alternative coins. The reason for this is that the success and growth of meme coins rely on the ability to build a strong community. Without the support of a community, meme coins would not be able to survive. The communities of alternative coins are typically varied and consist of individuals with different interests in the project for various reasons.

When considering investment decisions, it's crucial to understand the distinctions between meme coins and altcoins. Meme coins are typically traded for speculative purposes and short-term profit, while altcoins are invested to support the underlying project and for potential long-term gains. Meme coins tend to be highly volatile and lack real-world use cases, unlike altcoins, which often have specific utility within a particular ecosystem. Regardless of the cryptocurrency you decide to invest in, conducting thorough research is essential to make informed investment choices.