Monero (XMR), a privacy-focused cryptocurrency has climbed nearly 25% in the past week and has a current trading volume just north of $100 million (USD), losing the least in terms of price over the last 24 hours, when compared to the top 10 cryptocurrencies by market cap.
The reason why Monero is performing well is simple – a hard fork is scheduled for later this month (around March 14, 2018), and will result in the birth of a new coin, MoneroV (XMV). All Monero holders will get the new MoneroV in a 1:10 ratio following the snapshot at block 1529810.
Typically cryptocurrencies experience a lot of buying pressure right before a hard fork, as holders of the coin stand to receive free tokens – as was the case with Bitcoin Cash last year.
Similarly, investors have started stocking up on their Monero (XMR) holdings leading up to the fork, and we can expect even more buying pressure in the days to come.
Monero is one of the more mature cryptocurrencies, recognized by some as the ‘top privacy coin’, which is why the relative strength around this coin and its hard fork seems to be greater than normal.
What is MoneroV and why a hard fork?
“The best private digital currency in the world”, according to the MoneroV website.
MoneroV is privacy focused cryptocurrency which is secure, untraceable and finite. It will utilize the proof-of-work consensus algorithm and requires miners to verify transactions. At block 1529810, MoneroV miners will begin creating new blocks on the network.
MoneroV incorporates difficulty retargeting for miners, generates new block every 120 seconds, and has dynamic block sizes to speed up transactions times and reduce network congestion. As a privacy coin, it also utilizes ring signatures and stealth addresses. MoneroV is essentially Monero 2.0, with updates and improvements on all the shortfalls prevalent in the original Monero cryptocurrency.
MoneroV (XMV) looks to improve on two major shortfalls of Monero.
- The scalability issue – MoneroV will implement a new protocol (MimbleWimble) to help solve the scalability issue plaguing most coins like Monero and Bitcoin, preventing the use of mass adoption as a currency. MoneroV aims to be used on a large scale as a privacy-protected currency.
- Supply issue – Monero (XMR) currently has an infinite supply, whereas, MoneroV (XMV) will have a finite supply. There will be 158 million XMV circulating after the hard fork, with a total max supply of 256 million.
With only days left until the hard fork, Monero should see some good price action over the next several days. However, recently it has become common for coins to experience major swings ahead of significant developments. Moreover, once the snapshot takes place, most traders and investors will exit their positions, resulting in a price correction. For now though, XMR looks strong and stable.