Why the Monero Coin Price Is Surging
On a day when the broader crypto market was drenched in red, the Monero price chart was showing green candlesticks. The XMR coin price is riding a tailwind that helped it thwart Wednesday’s marketwide correction. In fact, Monero has turned out to be one of the few cryptocurrencies that has managed to recoup most of its losses post the February crypto market crash.
Take a look at the Monero chart below and see how its past one-month performance stacks up against industry leader Bitcoin and its biggest rival ZCash. Monero conspicuously stands out in blue.
Chart courtesy of TradingView.com
If you haven’t been following Monero closely, you may wonder what’s driving investor exuberance for this digital currency. Monero investors have recently been presented with a chance to acquire some free coins. It’s a tempting opportunity they can’t seem to pass up.
Basically, Monero is getting hard forked by mid-March. The split will give birth to a Monero offshoot called “MoneroV,” which will go by the symbol “XMV” and will be airdropped to Monero holders for free.
What You Need to Know About the Monero Hard Fork
Now, investors have been warned by the Monero team to steer clear of MoneroV. There are some obvious red flags that make us wary of this upcoming split. Here are a bunch of facts you may want to consider ahead of the hard fork.
Fact #1: The hard fork will airdrop MoneroV coins in the ratio of 1:10, that is, for every XMR coin you own, you’ll be entitled to receive 10 XMV coins. That means XMV coins will have a circulating supply ten-times that of XMR. So, you can do the math on prices. Even if these coins manage to trade on an exchange, expect them to be priced for pennies on the dollar.
Fact #2: The Monero hard fork will take place at block number 1529810, which means you’ll receive coins in proportion to the number of coins you’ll be holding at this block number. But to claim the XMV coins, you must move your Monero coins to a MoneroV wallet. This poses a grave threat to your privacy and your XMR investment.
Fact #3: MoneroV is supposedly being created to solve Monero’s scaling issues. To that end, MoneroV will adopt a protocol called “MimbleWimble.” But here’s the catch. This supposed solution will not be implemented until the fourth quarter of 2019, which is a year-and-a-half from now. At least, this is the timeline given on MoneroV’s roadmap. But as we’ve seen with most crypto projects in the past, deadlines are rarely met. So, we’re not holding our breath on it.
Fact #4: MoneroV will have a limited supply of coins, unlike Monero, whose supply is infinite. The MoneroV coin supply has been capped at 256 million. At the time of the airdrop, the supply will be approximately 158 million coins. But as I mentioned earlier, this is ten-times that of Monero’s.
Fact #5: No exchanges have so far indicated interest in adding MoneroV. There’s no guarantee any of them will. So it’s highly uncertain whether the coin will have a secondary market for trading. In other words, it’ll be nearly illiquid, at least in the near term.
Like virtually all other blockchain-based cryptos, Monero too has faced a slowdown in transaction processing as its network grew. But does it warrant a hard fork? We have our reservations.
Also, MoneroV does not plan to implement its solution to the scalability problem until another year-and-a-half. But perhaps Monero will itself have found a solution by then. So we don’t see it as a knight in shining armor for Monero as its founders may have us believe.
Finally, beware of the sudden price surge in XMR. The sound of free coins is certainly alluring, so it makes perfect sense why investors are piling into Monero. However, there’s a chance that the Monero price may rout after the speculators have secured their free coins and head for the exits.
Long story short; it’ll best to have all your bases covered ahead of the split.