Ask HN: Can someone explain a meme coin like I'm a 3-year old?
How do the newly created $TRUMP and $MELANIA meme coins work? How much was invested in creating them? What can they be used for? Can I buy one and sell half of it?
https://shamlatech.com/start-your-own-meme-coin/
The Bitcoin system is, ultimately, a secure database which says that "so and so owns 0.431 BTC" and lets you transfer BTC to someone else's ledger. In the case of BTC the system enforces a limit on how many BTC can exist.
Memecoins run on programmable blockchains like ETH, but again, somebody just programmed it to make a database that has entries like "so-and-so owns 1.51 units of $MELANIA".
It has value insofar as someone believes they can trade "X units of $TRUMP" for a Subway Footlong or a "Y units of $MELANAIA" for an ounce of Gold. No belief = no value. The same is true for BTC, but BTC is singular and rather constrained whereas anybody can create a memecoin. Note that BTC is denominated in this unit
https://en.bitcoin.it/wiki/Satoshi_(unit)
so you can buy a fraction of a BTC, memecoins can be denominated the same way. This is different from an NFT which is also a a ledger entry but there are only a certain number of them, each one has a unique identity, and you can't split one in half.
I disagree, there's a very important important difference here compared to the rest, because there's an off-market utility.
People know they can purchase it from a particularly crooked politician to bribe him for government power, influence, and access. Even afterwards, possessing a large collection of coins becomes a way to get favors compared to those who don't.
There's the problem that, when supply is limited, auctions clear at a price set by the person who thinks the object is worth the most, whose opinion is likely to be wrong.
(Radio advertising, a business that I've hovered around the periphery of for years, is like that in my mind. The owner of all the car dealerships in my city feels a little squee every time he hears his name on the radio, which distorts his judgement. People who do direct-to-consumer advertising on YouTube, however, have an excellent model of how much value an ad contributes to their business, which is why radio advertising impression rates are on an an entirely different planet than online ads.)
They cost virtually nothing to create and can’t be used to buy anything other than cash from someone even more credulous and later to the party than the current holder.
Thats basically it.
The other thing they do is provide a way for someone to signal that they contributed to the issuer's wealth without triggering existing safeguards around transparency, bribery, etc
He noticed interest rates at banks dropped when gold and silver ships from the Americas appeared on the horizon of European ports. Cause it meant money supply was going to increase in the market. Leading to more trade > manufacturing > jobs. So he asked the question why wait for the ships? Lets just print IOUs on paper and generate all this economic activity. Convinced the king and everyone has been doing it since.
Only problem is if IOUs are printed faster than goods arrive in the market we get Inflation or even Hyperinflation. People spend more and more, to buy less and less causing all kinds of chaos. If printed too slow there are other problems.
Kings over printed all the time to pay off debts inccured in maintaining armies, building palaces or whatever. Which leads to people ditching the currency for gold or something else, panic, bank run, bank failure, king toppled etc
On the flip side, industrial revolution, Tech disruption caused goods to arrive faster in the market faster than money was printed causing them to be sold cheaper than produced.
So we end up with Central Banks given the job of tracking inflation and increasing or decreasing the money supply to keep things stable.
Buying those other 80% from him using cash will be how companies and foreign governments bribe him for presidential favors or to hurt their competition, while pretending that they just wanted the cards. You might also be able to get minor favors by showing-off your existing collection, just to prove you're a fan.
Having a way to "use" the coin for real-world results actually makes it slightly less-silly than most... Alas, it happens to based on evil crimes that will hurt the vast majority of Americans.
Their disclaimer:
> Trump Memes are intended to function as an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol "$TRUMP" and the associated artwork, and are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type. GetTrumpMemes.com is not political and has nothing to do with any political campaign or any political office or governmental agency. CIC Digital LLC, an affiliate of The Trump Organization, and Fight Fight Fight LLC collectively own 80% of the Trump Cards, subject to a 3-year unlocking schedule. CIC Digital LLC and Celebration Cards LLC, the owners of Fight Fight Fight LLC, will receive trading revenue derived from trading activities of Trump Meme Cards.
It can't be done.
Some things are too technical for a 3-year old no matter how you put it.
This isn't one of them.
It's simply defined as a shitcoin, because it's not worth shit, and you're not supposed to say that to a 3-year old.
Simple as can be but you're also supposed to grow up a bit before you get to handle real money anyway.