BBG Tech: An Introduction to Cryptocurrency and Memecoins

By Aiden Satterfield

Cryptocurrency has revolutionized the financial landscape, introducing decentralized digital currencies that operate without central authority. At its core, cryptocurrency utilizes blockchain technology. 

Right now crypto is in a bad state, a lot of the major coins are far away from their all-time highs in value and this may be the case for the next couple of months. To many this is the perfect time to buy, I’ll let you make that decision. This is not financial advice. But here are my first insights as I’ve dove into this scene over the past couple of months.

February 18th via Coinbase. These are the three most mainstream Major Cryptocurrencies.

Bitcoin: All-time high: $109,026.25(Jan 2025)

Solana: All-time high: 294.85(Jan 2025)

Ethereum: All-time high: 4,721.07(Nov 2021)

What Is Cryptocurrency?

At its core, cryptocurrency is a form of digital or virtual currency that relies on cryptography for security. Unlike traditional currencies issued by governments, such as the U.S. dollar, cryptocurrencies operate on decentralized networks based on blockchain technology.

Understanding Blockchain Technology

A blockchain is a distributed ledger maintained across a network of computers, known as nodes. This ledger records all transactions made with a particular cryptocurrency in a series of blocks, each containing a list of recent transactions. These blocks are linked chronologically, forming a chain hence the term “blockchain.”

One of the key features of blockchain technology is its decentralization. No single entity controls the entire network, instead, all participants work together to validate and record transactions. This structure enhances security and transparency, as altering information in one block would require changes to all subsequent blocks and consensus from the majority of the network. 

The obvious question is how can I make money? 

Well, to me it comes down to four options and the ability to constantly pay attention: 

1. Investing and Trading:
   • Long-Term Investing: This strategy involves purchasing cryptocurrencies to hold them over an extended period, anticipating that their value will increase over time. 
   • Active Trading: Active trading involves opening short-term positions on crypto exchanges. This is entering at a dip and exiting at spikes.
2. Staking and Yield Farming:
   • Staking: Some cryptocurrencies operate on a Proof-of-Stake mechanism, where holding and “staking” a certain amount of the currency in a wallet helps maintain the network’s operations. In return, participants earn additional tokens as rewards.
   • Yield Farming: This involves lending or staking your cryptocurrency in decentralized finance (DeFi) platforms to earn interest or new tokens.
3. Mining:
   • Mining is the process of validating and adding new transactions to a blockchain. Miners use powerful computers to solve complex mathematical problems, and in return, they are rewarded with newly created coins. Mining has some environmental concerns as these computers  a lot of energy. Out of the three major cryptocurrencies you can only mine Bitcoin. Ethereum transitioned to a Proof of Stake system in 2022, and Solana utilizes a Proof of Stake mechanism as well.
4. Participating in Airdrops:
   • Airdrops: Developers may distribute free tokens to holders of a particular cryptocurrency as part of a marketing strategy or to reward loyal users.

A Memecoin?

You may have heard that President Donald Trump has introduced his own cryptocurrency, known as TRUMP, launched on the Solana blockchain. This is considered a memecoin. 

As a college student learning about the world of cryptocurrencies, I’ve been particularly intrigued by the rise of “meme coins”—digital tokens inspired by internet memes and pop culture. Platforms like Pump.fun have democratized the creation of these tokens on the Solana blockchain, enabling users to launch their coins for little to no cost. This accessibility has led to tons of memecoins being created. Fartcoin went viral last month and its all-time high was over a dollar!

What made my eyes widen was when I joined a Telegram group where a member transformed a mere $1 investment into $10,000 by investing in a meme coin that soared from a $100,000 market cap to an impressive $10 million a 100-fold increase. Inspired by such stories, I’ve begun making modest investments, typically no more than $10, aligning with my current financial status, a broke college student. While these small stakes carry the potential for substantial returns, they also come with the risk of total loss. Nonetheless, this hands-on approach offers good learning experiences in navigating the crypto landscape. Apps such as Twitter and joining telegram groups can keep you up to date about the next potential viral memecoin.

However, it’s crucial to approach these investments with caution. The cryptocurrency market is known for its high volatility, leading to significant gains or losses in short periods. Additionally, the legal status of cryptocurrencies varies by jurisdiction and is subject to change, adding a layer of regulatory uncertainty. The decentralized and often anonymous nature of cryptocurrency can also attract fraudulent schemes, making thorough research and the use of reputable platforms essential. The ease of creating tokens means that not all projects are legitimate, and most of them are designed with malicious intent. “Rug pulls,” where developers withdraw liquidity and abandon the project, leaving investors with worthless tokens, are a constant risk. I have seen my $5 investment turn into $20 down to $12 and plummet to 2 cents. Therefore, it’s crucial to approach memecoin investments with a high degree of skepticism and to do your research before investing.

Engaging with memecoins has been an educational journey, providing insights into market dynamics, risk management, and the potential of blockchain technology. While the allure of quick profits is tempting, I keep in mind the risks and continue to invest responsibly, viewing everything as a learning opportunity.