What rises from US$6.50 to US$45 only to fall back to US$6.14? I'll give you a hint: it's named after the only person to bankrupt casinos three times. You know, casinos, the definition of which is anyone who walks in with a dollar walks out with eighty cents (it used to be ninety cents, but you know, one person's deflation is a big corporation's inflation). How do you go bankrupt when you're vacuuming money from all that comein the door? (The Wife of Bankrupt Casino Operator coin is worse, having gone from US$7 to a high of mid-8's and then a rapid drop down to now US$0.13.)

I'm of course referring to Meme coins. The original musky meme coin does better those of First Guy and Gal, having sold originally for a few cents, peaking at ~30x that (still cents, though), before plumetting and then doing a few more wide gyrations before ending up at the current fourteen cents.

What's going on here? These coins sure look like they exhibit classic pump and dump dynamics. Low entry price, lots of public promotion that raises value, then suddenly the floor drops out of the elevator. If you're one of the lucky few that bought at the onset and sold at the peak, congratulations, remember to pay your taxes on the gain. If you're still holding onto your coins, be sure to wave goodbye when they dip into nothingness.

The real story behind meme coins is that they are issued out of air, have no real value, but are "crypto" so they must be valuable, am I right? (No, I'm not right!). Funny enough, even the serious crypto sites state that. Here's crypto.com's description: "Most memecoins offer little to no intrinsic utility. Instead, their value comes from market hype, media attention, and FOMO (fear of missing out)..." Yeah, I want to buy some FOMO and hype, please.

You actually get more by buying a Pet Rock. Technically, a pet rock comes in a box (with ventilation!) and is a real rock you can touch, hold, fidget with, read the funny user manual for, and show off to others. You can't do that with a meme coin. Your coin only exists as a digitally recorded record of your purchase, isn't real, has no manual, and there's nothing to show off to others (other than your having spent money on nothing).

Stable coins are a bit different, though the lack of truly strong regulation means that they might not actually be backed by assets that can make the owner of the coin whole. In theory, a one dollar stable coin is worth one dollar because it is backed by a dollar's worth of real assets by the vendor selling it.

And, of course, behind all these so called digital coins is the Mother of All, the bitcoin. (It's really the progeny of a few earlier digital currency attempts, including ecash, hashcash, and b-money) I read Nakamoto's white paper proposing bitcoin when it first appeared and my reaction was "an interesting idea that might be quite usable if it were backed by real assets." The blockchain aspect of the proposed bitcoin (and virtually all other digital coins introduced since) makes for a very secure audit trail, but auditing what? Without backing from a tangible asset behind it, basically all you're doing with bitcoin is keeping a transaction list of everyone who decided to devote computer resources to mining new coins and then selling them to others.

Quite a few of my Silicon Valley colleagues also read Nakamoto's white paper, but came to different conclusions. One of them actually told me "this is a way to print money without government regulation." Yes, that's a quote. And he soon went about doing just that. He's richer now and I'm not, so I guess I missed a turn. Of course it was an ethical turn as well as real one, and I try to steer morally straight.

Another of my acquintances was involved very early on with mtgox, a bitcoin exchange in Tokyo that actually started as a way to trade Magic: The Gathering Online--the mtgo in mtgox--cards, a game I played (I also play the original paper version). That also seemed like a way to mint free money, at least until it was reported that 25,000 bitcoins had been stolen.

But the mtgox debacle also revealed some other issues with bitcoins: 2609 bitcoins somehow got sent to invalid addresses (remember, we're talking about computer software here, and bugs, hacks, and worse all come into play).