The Operation of Meme Coins as a Shared Belief System: What Lies Behind?
This article is sourced from hitesh.eth, authored by Block unicorn.
Summary:
CoinList CEO: Bitcoin is the King of Memes, Memecoins will continue to surge… How are the former ICO dominators doing now?
Background:
ZackXBT questioned the collaboration with lowercase Neiro, the “most evil meme market maker,” and after official acknowledgement, the coin price soared by 38%.
Table of Contents:
Disillusionment with utility tokens – Loss and distrust
Success within Meme coins – Reinforcing beliefs through profits
Social setbacks – The difficulty of persuading others
Encountering a charismatic Meme coin theorist – Emotional connections
Spread of Gospel on social media – Dopamine stimulation
Formation of Meme coin frenzy – Cult leaders and shared belief systems
Cult-like behavior – Complete cognitive commitment
The psychological and social processes that lead to the formation of Meme coin frenzy are similar to other forms of frenzy. However, in this case, it is driven by financial losses, emotional reliance, and social validation obtained through the cryptocurrency market and online communities.
The following is a breakdown of the different psychological stages during the formation of Meme coin frenzy:
Individual journey starts with financial losses from utility tokens or venture-supported projects, which also marks the initial stage of psychological transformation:
Cognitive dissonance – The individual once believed in the utility or long-term value of utility tokens, but after experiencing financial losses, their mindset conflicts. They had trusted that these assets would fulfill their promises, but reality didn’t align with their expectations.
Loss of trust – The brain feels disappointed with the promises made by these utility tokens. Financial losses lead to the collapse of trust in the system (venture support or project-centric), triggering the need to find alternative narratives to explain why they went wrong.
Search for redemption – After the disappointment, the individual’s mindset becomes open to new ideas, especially those promising faster or more dramatic financial returns. This openness lays the foundation for their eventual turn towards Meme coins.
Next, the individual earns some money through investing in Meme coins, leading to a shift in mindset:
Relief and validation – Profits gained from Meme coins after losses in utility tokens provide a sense of validation. The brain starts associating Meme coins with success, triggering confirmation bias: they start believing that Meme coins not only bring profits but also serve as a true alternative to utility tokens.
Reinforcement of bias – At this stage, the brain weaves a narrative that Meme coins will skyrocket. The bias shifts towards Meme coins, considering them as a new path to financial success, despite the lack of solid foundational support. At this point, the brain doesn’t require Meme coins to have deep practicality; profits and emotional solace are enough to provide validation.
The individual begins to promote their new belief in Meme coins to others but faces resistance:
Difficulty articulating the vision – Although individuals strongly believe in the potential of Meme coins, they struggle to effectively convey their vision to others. This may be due to the lack of a coherent theory behind Meme coins, leaving only emotional belief instead of logic.
Social friction – Resistance from others brings frustration. The brain seeks social validation but doesn’t receive external confirmation from peers, and this belief remains at a personal and internal level. This prompts them to double down on their beliefs and actively promote Meme coins on social media.
Cognitive solidification – Faced with increasing rejection, the individual’s beliefs become more entrenched. At this stage, the brain starts seeking external reasons to explain why others cannot understand what they “see.”
A turning point occurs when the individual encounters a charismatic leader who presents a compelling narrative about the future of Meme coins:
Emotional appeal – The charismatic theorist provides the intellectual framework that individuals need to support their beliefs. The theory explains the chaos and speculation in the Meme coin world and provides a reasonable explanation for why Meme coins are the future.
Personal connection – After studying the charismatic leader, individuals find similarities in their stories, creating an emotional bond. The background story of the theorist resonates because it reflects their own experiences – financial losses, disillusionment, and redemption achieved through Meme coins. This emotional connection solidifies their trust in the theorist’s viewpoint.
Cognitive relief – The brain finally experiences relief. The narrative from the charismatic figure resolves the internal conflict between past losses and current gains, providing a structured way to explain why Meme coins are the future. The theorist’s framework becomes the new intellectual pillar of their belief system.
As individuals start promoting the viewpoint of the charismatic theorist on social media, their influence begins to grow, leading to powerful psychological reinforcement:
Dopamine feedback loop – Whenever individuals receive likes, comments, or new followers on social media, the brain experiences a wave of dopamine stimulation. This reward mechanism reinforces the behavior of spreading the theory, making the brain feel self-affirmed through external recognition.
Reinforcement of Meme coin performance – If at this point the price of Meme coins rises, individuals gain further validation, further solidifying their belief in Meme coins and the theorist’s viewpoint. The brain starts associating financial success with spreading this ideology, forming a strong financial and social reward feedback loop.
Shift in social identity – With the increasing influence on social media, individuals begin to identify themselves as evangelists or promoters of Meme coins. Their sense of identity intertwines with the success of Meme coins and the charismatic theorist’s viewpoint.
Eventually, the individual’s belief becomes part of a larger movement, and others who share similar biases and frustrations discover the same charismatic theorist:
Discovery of charismatic leaders – Other enthusiasts of Meme coin frenzy, who have also lost trust in traditional tokens and hold optimism towards Meme coins, eventually find the same charismatic leader. This forms a key follower group around the leader’s narrative, and individuals realize they have become part of something bigger than themselves.
Shared belief system – The cult of Meme coins forms around the theorist’s ideas, the profitability of Meme coins, and the emotional and financial success they promise. The leader becomes the center of this belief system, providing intellectual and emotional validation, solidifying the collective bias of the group.
Echo chamber and group reinforcement – As more people join this movement, the group forms an echo chamber, continuously reinforcing each other’s beliefs in Meme coins. The theorist’s viewpoint becomes almost sacred and unquestionable. At this point, the individual’s brain operates within a closed system, ignoring opposing opinions, and the collective belief in Meme coins grows stronger.
At this stage, individuals are fully immersed in the frenzy of Meme coins:
In-group/out-group thinking – Individuals now view themselves as part of the “in-group” of Meme coin believers and consider those who question Meme coins as part of the “out-group.” The brain starts protecting the fervent belief system, disregarding skeptics and staunchly upholding the Meme coin narrative.
Cognitive solidification and social identity – The individual’s identity is now inseparable from the Meme coin movement. Their self-worth stems from the influence on social media and the performance of Meme coins, and the leader’s viewpoint is seen as absolute truth.
Continued dopamine rewards – Individuals continue to receive regular dopamine stimulation from social media interactions and price fluctuations of Meme coins, making it increasingly difficult for them to break away from this belief system.
Throughout this process, the individual’s mindset shifts from financial disillusionment to establishing an emotional connection with the charismatic leader, followed by cognitive bias validation, and ultimately complete identification and immersion in the cult of Meme coins. This cycle is driven by psychological, social, and financial reinforcement, creating a powerful feedback loop that is difficult to break. Meme coin frenzy operates as a shared belief system, providing financial hope and social belonging, with the charismatic theorist at its core.