Because the official memecoin of the second Donald Trump presidency flirts with a market cap of $10 billion, and Melania Trump, the following first girl, launches her personal, Balaji Srinivasan, the previous CTO of Coinbase, mentioned in a thread on X that this complete class of tokens may very well be equated to playing.
A memecoin is a zero-sum* lottery.
There isn’t any wealth creation. Each purchase order is solely matched by a promote order. And after an preliminary spike, the worth ultimately crashes and the final patrons lose every thing.
* It’s truly adverse sum if the platform takes a lower.
— Balaji (@balajis) January 19, 2025
“There isn’t any wealth creation. Each purchase order is solely matched by a promote order. And after an preliminary spike, the worth ultimately crashes and the final patrons lose every thing,” he posted, calling memecoins a zero-sum – even adverse sum after alternate charges – lottery.
Balaji mentioned that memecoins needs to be approached in the identical method as playing in Las Vegas for leisure functions.
“Most should purchase belongings that retain their worth over the long term,” he continued. “It’s typically potential so as to add use circumstances to a memecoin, or to maintain it within the headlines to maintain its worth aloft indefinitely. And we’ve seen examples of that as properly.”
In response to the put up, many requested Balaji if bitcoin was ever thought-about a memecoin, to which he argued that it wasn’t due to its use circumstances and decade-plus endurance.
You might be free to contemplate any asset a memecoin, and I’m not offended by that, however I’m blissful to elucidate why I feel Bitcoin is completely different.
1) Bitcoin is the bottom layer asset of a blockchain with ~800 Th/s in hashrate throughout lots of of datacenters worldwide.
2) It hasn’t been… https://t.co/tazGAzGnjn pic.twitter.com/58AZxtsy9a
— Balaji (@balajis) January 19, 2025
“Bitcoin is the bottom layer asset of a blockchain with ~800 Th/s in hashrate throughout lots of of datacenters worldwide,” he wrote. “It grew step by step over time, slightly than suddenly, and the mining issuance schedule limits how a lot might be bought by anyone social gathering.”
Market curiosity within the official Trump memecoin has sucked liquidity out of different memecoins, with CoinGecko data reporting that the class has shrunk by 8% within the final 24 hours. Most of the prime memecoins like DOGE, SHIB, and BONK are down by over 10% on-day.
READ MORE: Bitcoin retraces to $100K, TRUMP Tanks 30% as Melania Memecoin Skyrockets
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