Though many are unsure, we might be observing the next advance in financial technology. Or are we simply queuing up to be duped and defrauded in a newfangled, high-tech gold rush? That question goes with me everywhere. I don’t need to tell you that every day, I’m bombarded by the next meme coin taking my social media timeline by storm. And to be honest, you ought to be asking yourself that question right now.

It’s absurdly simple to create a new cryptocurrency these days. Token launchpads, plug-and-play smart contracts, and development kits have made it practically democratized. Even someone with limited coding knowledge can spin up a new token on Ethereum, BNB Chain, or even the newer platforms like Sui. Just because you have the power to create an app doesn’t mean you should. The barriers to entry are practically nonexistent. It’s like giving away the keys to Fort Knox…made out of cardboard.

This ease of creation is the double edged sword that is social media. On the one hand, that promotes creativity and new ideas. Creating and deploying smart contracts is cheap, allowing developers to quickly test new ideas and create decentralized applications (dApps). At the same time, it opened the floodgates to scams, pump-and-dump schemes, and projects that had literally zero value underneath them. It’s kind of like the App Store – for every useful app, there’s ten that are completely useless or completely malicious.

Remember the ICO boom of 2017? Everyone was out there starting their own coin, trying to disrupt everything from dog grooming to space travel. The hype around these projects was unbelievable, the returns on investment were…well, mostly zero. Then I found a major national study that illustrated a shocking pattern. Indeed, most ICOs from back then are worth zero today. Worthless. It's a sobering thought.

Are we seeing a repeat of history? The latest wave of new coins is just like that market mania. The underlying technology might be more sophisticated, but the core dynamic remains the same: a lot of hype, a lot of speculation, and a lot of people hoping to get rich quick. The question is: who ends up holding the bag when the music stops?

The rapid introduction of new cryptocurrencies goes far beyond individual investors possibly losing cash. It has broader, unintended consequences.

While price undoubtedly plays a large role, let’s focus for a moment on the environmental aspect. We’re all already being lectured to lower our carbon footprint, recycle more and just generally consume less. And yet, we rejoice every time a new digital asset is created which, in many instances, further harms our environment. Frankly, that’s a disconnect—that we need to get away with.

So, how do you navigate this minefield? How do you tell the difference between a true project and a rug pull? The Daily Journal highlights some "green flags," such as a strong team, a clear use case, and active community engagement. But honestly, those are just the basics. Every scammer knows to check those boxes.

The entire episode seems implementary of the Tulip Mania in 17th century. People were buying tulip bulbs for ridiculous prices now, thinking only that the prices were going to skyrocket further. Of course, the bubble did eventually burst, and most investors went home with empty pockets.

  • Increased Regulatory Scrutiny: The more scams and rug pulls that occur, the more pressure regulators will face to crack down on the entire crypto industry. This could stifle innovation and push legitimate projects offshore.

  • Environmental Concerns: While not all new coins use energy-intensive proof-of-work mechanisms, many still rely on blockchains that have a significant carbon footprint. Are we willing to sacrifice environmental sustainability for the sake of another meme coin?

  • Market Manipulation: The ease of creating new coins makes it easier for bad actors to manipulate the market. Pump-and-dump schemes are rampant, and unsuspecting investors are often the victims.

Are we about to repeat the same mistake with new crypto-based coins? Are we allowing our insatiable avarice and fear of missing out to blind us? I’m not arguing here that every single new coin is a scam. What I am saying is that you should be very concerned and wary before you lay down your hard-earned money.

Ultimately, the responsibility lies with you. Don't blindly follow the hype. Don't rely on social media influencers. Do your own research. Understand the risks. And only invest money you can afford to lose.

The future of cryptocurrency is still uncertain. One thing is clear: there are no guarantees. So, before you jump on the next crypto bandwagon, take a deep breath, step back, and ask yourself: is this innovation, or just another get-rich-quick scheme? Your financial future might depend on it.

Here's what I look for:

  • Longevity: How long has the project been around? A coin that's been around for more than a year or two has a higher chance of being legitimate than one that just launched last week.
  • Developer Activity: Is the development team actively working on the project? Are they releasing updates and addressing bugs? Check the project's GitHub repository to see their activity.
  • Trading Volume: Is there substantial trading volume on reputable exchanges? Low trading volume can be a sign of manipulation.
  • Market Capitalization Longevity: How long does a market capitalization sustain? Is it hours, days, weeks, months or years?

The Unexpected Connection: Tulip Mania 2.0?

The whole thing reminds me of Tulip Mania in the 17th century. People were paying exorbitant prices for tulip bulbs, convinced that they would only go up in value. Of course, the bubble eventually burst, and many investors were left with nothing.

Are we making the same mistake with new crypto coins? Are we letting our greed and FOMO cloud our judgment? I'm not saying that all new coins are scams. But I am saying that you need to be extremely careful before investing your hard-earned money.

Do Your Own Research: The Only Way To Win

Ultimately, the responsibility lies with you. Don't blindly follow the hype. Don't rely on social media influencers. Do your own research. Understand the risks. And only invest what you can afford to lose.

The future of cryptocurrency is still uncertain. But one thing is clear: there are no guarantees. So, before you jump on the next crypto bandwagon, take a deep breath, step back, and ask yourself: is this innovation, or just another get-rich-quick scheme? Your financial future might depend on it.