Original Author: hitesh.eth
Compiled | Odaily @OdailyChina
Translator | CryptoLeo @LeoAndCrypto
"A whale made 289x profit on SPX", "Smart money addresses traded GOAT for 117x profit, and GNON for 855x profit"...
"Murad: Meme coins are a sign of the crypto industry's maturity", "Zhu Su: Memecoin infrastructure makes everything tokenizable possible", "Arthur Hayes: Meme coin GOAT may reach a $1 billion market cap"...
SPX, GOAT, GNON, besides BTC reaching $69,000, the industry's big news lately has been the daily emergence of meme coin wealth myths, with real on-chain data and industry leaders' dissemination, meme has become the hottest track recently. Crypto KOL hitesh.eth wrote an article outlining "From contact to belief in Memecoin, the thought process and social cognition of traders", the full text is as follows, compiled by Odaily:
The formation of the "Memecoin cult" follows a similar thought process and social development as the formation of other cults, driven by capital losses, cognitive attachment, and social recognition gained through the cryptocurrency market and community.
The following are the different cognitive stages in the process of creating the Memecoin cult:
1. Disillusionment with utility coins - loss and distrust
The journey begins with individuals losing money in utility coins or VC-backed projects, which is where the initial cognitive shift occurs:
Cognitive dissonance - People believe in the utility or long-term value of these utility tokens, but after experiencing losses, their thoughts are in conflict. They believed these assets would bring returns, but reality did not match their expectations.
Loss of trust - People are disappointed with the prospects of these utility tokens, asset losses cause people to lose confidence in utility tokens (VC-backed or utility-focused projects), triggering a psychological need to find another narrative to explain why they lost money.
Seeking redemption - After disappointment, people's thoughts begin to change, gradually accepting new things, especially ideas that promise faster or more significant financial returns, this openness lays the foundation for them to eventually turn to Memecoin.
2. Memecoin's success - reinforcing beliefs through gains
Next, people make money by trading Memecoins, and their cognition undergoes an emotional transformation:
Solace and recognition - After losing money on utility coins, making a profit from Memecoins is like receiving recognition. People begin to associate Memecoins with success, triggering a confirmation bias: they start to believe that Memecoins are not only profitable but also a reasonable alternative to utility coins.
Reinforcement of bias - At this stage, the brain begins to form the notion that Memecoins will thrive. Although lacking fundamental support, the bias shifts to viewing them as a new path to financial success, without the need to consider the deeper utility of Memecoins, as profits and emotional release are sufficient to prove this point.
3. Social frustration - efforts to convince others
After the profit stage, people begin to promote the new narrative of Memecoins, but face resistance:
Inability to clearly express the vision - Although individuals believe in the potential of Memecoins, they struggle to effectively convey their vision to others, perhaps because the logical theory behind Memecoins is lacking, leaving them with only emotional beliefs rather than logic.
Social conflicts - Resistance from others can be frustrating. People will seek social recognition for their new beliefs, but without external confirmation from their peers, this belief can only be personal and internal, prompting them to double down on their beliefs and continue to heavily promote Memecoins on social media.
Cognitive barriers - The more individuals are rejected by others, the more entrenched their beliefs become. At this stage, their minds begin to seek external reasons to explain why others do not understand what they "believe" in.
4. Encountering Memecoin "gurus" - emotional connection
At this point, a charismatic Memecoin theorist appears and makes a compelling description of the future of Memecoins, marking a turning point:
Emotional appeal - The Memecoin theorist provides the knowledge framework that is missing for individuals to support their beliefs, making sense of the existing chaos and speculative world of Memecoins and outlining their future vision.
Personal connection - After encountering the Memecoin theorist, individuals will find similarities in the narrative they are spreading, creating an emotional bond, as the theorist's backstory resonates emotionally, as it reflects the thought processes and experiences the individual has gone through - financial losses, disillusionment, and redemption through Memecoins, this emotional connection strengthens trust in the theorist's views.
Cognitive closure - There is a sense of closure. The theorist's narrative resolves the internal conflict between past losses and current gains, and provides a structured way to explain why Memecoins are the future. The theorist's framework becomes the framework for the individual's belief system.
5. Preaching on social media - dopamine frenzy
As individuals begin to promote the Memecoin theorist's ideas on social media, their influence starts to expand, generating powerful psychological reinforcement:
Dopamine feedback loop - Whenever individuals receive likes, comments, or new followers on social media, their brains receive a dopamine stimulus, and this reward system reinforces the behavior of spreading the theory, making the brain feel the effectiveness of external recognition.
Memecoin profit reinforcement - If Memecoin prices rise during this period, individuals will receive additional recognition, further consolidating their beliefs in Memecoins and the theorist, as their minds begin to link financial success with the propagation of the ideology, forming a powerful feedback loop of financial and social rewards.
Transformation of social identity - As their social media influence expands, individuals begin to see themselves as Memecoin evangelists or advocates, their sense of identity intertwined with the success of Memecoins and the theorist's ideas.
6. Formation of the Memecoin cult - cult leader and shared belief system
Finally, when others with similar biases and frustrations find the same Memecoin theorist, the individual's beliefs become part of a broader belief:
Discovering the cult leader - Other utility coin skeptics and Memecoin optimists eventually find the same charismatic cult leader, around whom a large following forms, creating a belief community, and the individual realizes they are part of a larger belief collective.
Shared belief system - The Memecoin worship revolves around a shared belief in the theorist's ideas, the profitability of Memecoins, and the emotional and financial success they create, with the theorist at the center of this belief system, providing cognitive and emotional validation for the collective biases of the group.
Echo chamber and group reinforcement - As more people join the movement, the group becomes an echo chamber, constantly reinforcing each other's beliefs in Memecoins. The theorist's ideas become almost sacred and unquestioned, the individual's thoughts now operate in a closed system, dissenting views are rejected, and the collective belief in Memecoins becomes stronger.
7. Cult-like behavior - complete cognitive investment
At this stage, the individual is fully committed to the Memecoin movement:
In-group/out-group thinking - The individual now sees Memecoin believers as the "in-group" and anyone doubting Memecoins as the "out-group", their thinking begins to protect the cult's belief system, rejecting skeptics, and doubling down on the Memecoin narrative.
Cognitive barriers and social identity - personal identity is now inseparable from the Memecoin movement, they derive self-worth from the influence of social media and the performance of Memecoins, while the ideas of charismatic leaders are seen as absolute truth.
Sustained dopamine rewards - individuals continue to receive regular dopamine stimulation from social media interactions and MEME price fluctuations, making it increasingly difficult to break away from the belief system.
In this process, the individual's thoughts shift from financial disillusionment to emotional connection with the charismatic leader, followed by cognitive acceptance of their biases, and ultimately a complete cognitive and social commitment to the Memecoin cult.
This cycle is driven by emotional, social and economic reinforcement, making it a powerful and unbreakable feedback loop.
The Memecoin cult operates as a shared belief system, providing both economic hope and a sense of social belonging, all driven by its core theorists.
