Because the official memecoin of the second Donald Trump presidency flirts with a market cap of $10 billion, and Melania Trump, the subsequent 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 is no such thing as a 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 the whole lot.
* It’s really damaging sum if the platform takes a lower.
— Balaji (@balajis) January 19, 2025
“There is no such thing as a 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 the whole lot,” he posted, calling memecoins a zero-sum – even damaging sum after trade charges – lottery.
Balaji mentioned that memecoins ought to be approached in the identical means as playing in Las Vegas for leisure functions.
“Most can buy property that retain their worth over the long term,” he continued. “It’s generally attainable 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 nicely.”
In response to the put up, many requested Balaji if bitcoin was ever thought of 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 completely happy to elucidate why I believe 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 steadily over time, moderately than unexpectedly, and the mining issuance schedule limits how a lot may be offered by anyone social gathering.”
Market curiosity within the official Trump memecoin has sucked liquidity out of different memecoins, with CoinGecko information reporting that the class has shrunk by 8% within the final 24 hours. Lots of the prime memecoins like DOGE, SHIB, and BONK are down by over 10% on-day.
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