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 entire 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 just matched by a promote order. And after an preliminary spike, the worth ultimately crashes and the final patrons lose all the things.
* It’s truly unfavourable sum if the platform takes a reduce.
— Balaji (@balajis) January 19, 2025
“There is no such thing as a wealth creation. Each purchase order is just matched by a promote order. And after an preliminary spike, the worth ultimately crashes and the final patrons lose all the things,” he posted, calling memecoins a zero-sum – even unfavourable sum after trade charges – lottery.
Balaji mentioned that memecoins must be approached in the identical method as playing in Las Vegas for leisure functions.
“Most can purchase belongings that retain their worth over the long term,” he continued. “It’s typically potential so as to add use instances to a memecoin, or to maintain it within the headlines to maintain its worth aloft indefinitely. And we’ve seen examples of that as effectively.”
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 instances 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 satisfied to clarify 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 regularly over time, moderately than , and the mining issuance schedule limits how a lot could be offered by anybody 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.
READ MORE: Bitcoin retraces to $100K, TRUMP Tanks 30% as Melania Memecoin Skyrockets
