Security and reliability of memcoins
The role of memcoins in today’s marketplace remains a debatable issue.
On the one hand, these altcoins, like other cryptocurrencies, should be decentralized and less vulnerable to external attacks.
On the other hand, crytoskeptics are convinced that meme tokens do not have enough control of regulatory agencies and there is a huge volatility of rates.
In addition, there are questions about the nature of their decentralization. But first things first.
Crypto-enthusiasts and, in particular, memcoin fans are convinced: due to the lack of centralized management in the system funds are more secure.
This is enabled by blockchain technology and the consensus mechanisms used to ensure that transactions are conducted by the participants themselves: miners or validators.
Opponents of this approach (usually the opponents of the concept of cryptocurrencies themselves), on the contrary, believe that memcoins lack some fundamental component.
There is no control by governments, no overall integration, no support from significant financial counterparts..
But there are crazy fluctuations in value, which are often caused by trivial social media posts.
It is the latter factor that is the main argument against memcoins. Increased volatility can lead to the fact that today you have a fortune, and tomorrow you have nothing.
And all because someone wrote a couple of posts on Twitter.
It turns out that it’s necessary to look for some kind of result (intermediate value) between total control (because if it’s implemented, it won’t be a cryptocurrency anymore) and the creativity that memcoins bring to life.
A word or two about the decentralized nature of memcoins. It at least raises questions. The largest representative of this class of cryptocurrency – Dogecoin – initially had a limited issue.
It was 100 billion coins. However, in 2014 it was decided that the emission limitation was no longer necessary.
Dogecoin co-founder Jason Palmer made a life-changing move. In other words, decentralization is not at the level of program execution, but as a concept questioned.
And if so, the advantage over traditional means of payment, where governments and central banks play an important role, is already extremely controversial.
In this sense, the criticism of decentralization applies not only to memcoins, but also to many other constantly updated altcoins.
Renewable, for example, through the network’s hardforces, which are actually initiated by developers and other central players.
Memcoins as a medium of exchange
When comparing fiat money and memcoins as a medium of exchange, the options under consideration will have both advantages and disadvantages.
The first thing to note is the different volatility. In this respect, traditional means of exchange win over memcoins, because they allow for at least some planning, given the stability of the exchange rate.
Second, cryptocurrencies are not accepted in many places. Digital currencies are simply banned in many countries.
And even where allowed, for example in Japan, the business itself can determine whether to accept payment in cryptocurrency or not. This is especially true for memcoins.
However, meme tokens also have their advantages. For example, relatively small commissions. If you transfer fiat money from one bank to another, it will be very expensive.
And of course decentralization.. Anyway, memcoins have much more signs of decentralization.
Fiat money is directly controlled by the authorities, and its supply is often unrestricted, leading in the long run to depreciation, that is, inflation.
And what does it take to get memcoins into everyday life?
How to make memcoins free to be accepted
First, there needs to be a well-defined legal framework that allows businesses to accept cryptocurrency payments.
And the point about memcoins should be detailed, so that there would be no legal delays. Secondly, businesses must be motivated to accept such payments.
A beauty shop or bakery can easily accept payment in Bitcoin or Ether, but not in Dogecoin and Shiba Inu. Why? Because popularity (and liquidity) is higher.
Third, memcoins need to be sufficiently widespread among users. And it’s not enough to have a desire; you need real support from business.
Modern payment services could well implement support for memcoin payments. Fourth, it is necessary to work out smart contracts.
In the current economic climate, when humanity is not ready to give up fiat money, we need the ability to quickly convert some assets into others.
For example, DOGE to dollars or BTC. This can be done through smart contracts. Are there any ethical problems with memcoin approval?
The widespread approval of memcoins
The main thing that opponents of Dogecoin, Shiba Inu, Pepe, FLOKI and others can cling to is the lack of some kind of “fundamental basis”.
After all, what are memcoins? Some beautiful or funny story from the Internet, on the basis of which the cryptocurrency is created. Another obstacle could be the climate factor.
Many cryptocurrencies are based on the PoW consensus algorithm, which means that in order to mine these coins, you need a mining organization and electricity.
While the question of the environmental harms of mining is controversial, remaining the subject of speculation by various interest groups, the idea of possible harm in the face of a popular green agenda is not good for e-cash.
Memcoins could be used for money laundering or other illegal activities. As, however, other cryptocurrencies and conventional fiat money.
So there is no difference between memcoins and other means of payment.
On the other hand, regulators, represented by central banks, are generally not too interested in supporting any digital currency other than their own (except CBDC, which uses the advantages of cryptocurrencies in the form of “transparent blockchain” to strengthen control).
And finally, the general low preparedness of humanity for something new. Cryptocurrencies, of course, enter into everyday life.
But most of those who are interested in them know about bitcoin and ether. Some people know cryptocurrencies in the top ten by capitalization, but there are far fewer of them.
Withdrawal
Memcoins are unlikely to replace traditional money in the coming years. Some suggest that bitcoin will do that.. But Dogecoin, Shiba Inu and Pepe stay away for now. There are many reasons for that:
- Lack of popularity.
- Decentralization issues.
- Lack of fundamentals.
- Fears of regulatory control and lack of a solid legal framework.
- Lack of interest in the issue on the part of central financial regulators.