Monacoin review. Why the Japanese cryptocurrency is so promising

07.09.18 14:21
Cryptocurrency

The idea of digital money that can be launched with any conditions of the creators quickly captivated the World. It’s not a surprise since cryptocurrency does not require physical means, unlike fiat money; it exists only like digital information, so it is available wherever Internet exists. Besides, crypto funds can function without state approval and legislative framework.

Given the huge number of crypto coins for every taste, it would be weird if Japan did not have its own cryptocurrency, and Monacoin has become this special coin.

Mona supports the main principles of cryptocurrency; it exists beyond the control of the state and legislation system; its’ viability and functionality is provided by users.

The developers claim that Monacoin is driven forward not by the developing team but by great support of users, who mine it (the coin was not pre-mined before the release) and promote through computer games and web applications, and this is the main difference between Monacoin and other cryptocurrencies.

The promising Japanese crypto project Monacoin has officially started 1 January 2014. However, the idea appeared in 2013.

It is a Litecoin fork, and the main difference between Monacoin and the coin-forerunner is the total emission of tokens. Monacoin offers 105,120,000 coins, while Litecoin is limited to 84,000,000.

The developers of the currency are known as Mr. Watanabe; their identities remain secret.

The popularity of the coin has been increasing rapidly after it was announced on Japanese TV channel WBS TV Network Tokyo.

Unlike other cryptocurrencies, Monacoin does not have white paper; instead of it, the developers launched a game.

Monacoin appeared to be pretty successful cryptocurrency; in Japanese society, it is a worthy competitor of Bitcoin. Given the fact that Japan has authorized cryptocurrency, the Japanese national coin does not have to face the typical legislative limitations on crypto money.

Courtesy of CoimMarketCap

Monacoin technical characteristics

Monacoin algorithm Lyra2REv2

Monacoin uses Lyra2REv2 algorithm, which was primarily applied to Vertcoin. It is an improved version of the previous algorithm Lyra2RE. Their peculiarity is that parameters of time and memory consumption are separated; Scrypt-N algorithm does not have such a function, that’s why ASICs were able to decipher Scrypt-N quickly. Lyra2RE changes memory requirements once in a while, so it is not cost-effective to adapt ASICs to constantly changing principles of computation.

Lyra2REv2 has improved performance of work with GPU and contains several addition hash functions.

Thus, Monacoin supports the main decentralization principles of cryptocurrency because ASIC owners cannot monopolize mining. Moreover, since there was no pre-mining, developers do not “break the rules” possessing a big part of coins. Monacoin really belongs to the crypto community.

Dark Gravity Wave difficulty re-adjustment algorithm

Dark Gravity Wave calculates the difficulty level for every block, unlike, for instance, Bitcoin, which mining difficulty grows sharply with every 2016-th block. This allows re-adjusting mining difficulty smoothly.

SegWit protocol update

SegWit allows solving the problem of cryptocurrency scaling. It has been created to reduce the problem of the malleability of blockchain; now it also increases the number of transactions in a block without boosting its volume. Due to this, the waiting time in the queue decreases, and consequently, the commission fees are reduced; however, the total miners’ remuneration can increase because the number of transactions rises significantly. Besides, SegWit simplifies the addition of auxiliary functions (e.g., protocol Lightning Network, which is also used by Monacoin).

How does it work?

SegWit deletes all the information about signatures from blocks and stores them in external structures; these data take about half of the volume of the entire block, so this enables conduction almost twice more transactions at a time.

P2P architecture

Monacoin is built on peer-to-peer architecture, which unifies computers of all the users and provides a remote informational exchange. This system is based exclusively on the equality of the users (in the system, they are called peers); therefore, the network is protected from external manipulations and pressure.

Unlike client-server model, P2P architecture does not depend on a server, thus being functional with any number of peers.

PoW mining algorithm

This algorithm is applied to blockchain to confirm transactions and create new blocks. Due to it, miners compete each with other for conducting operations and getting a reward. The effectiveness of mining does not depend on the amount of miner’s money; everybody has equal rights, and every new member can start mining any time with the same opportunities as the first miners have.

 

So far, miners get 25 tokens as a reward for every block; the average time to create a block is 1,5 min.

How to buy Monacoin

You probably will not manage to buy Monacoin for fiat money unless you are Japanese. Since the coin is a kind of Japanese national cryptocurrency, you can easily buy it for JPY. Bitbank, Zaif, and Fisco are suitable websites for this. In other cases, you can exchange more popular digital currencies for Monacoin; so far, it is the fastest and the easiest way to get the Japanese crypto.

Step 1. Buy Bitcoin for fiat money

You shouldn’t have any problems buying Japanese cryptocurrency if you are BTC owner, but if your crypto wallet is empty, first you have to take care of means for exchange. Bitcoin is perfect for this because it is still the most popular cryptocurrency, so there are a lot of options for buying it, including online purchase for USD and EUR. The best place for buying is Coinbase, one of the most demanded crypto exchanges where credit cards are accepted. It is a convenient and safe platform, where users can store their funds offline and protect accounts with two-factor authentication.

You have to verify your identity to use Coinbase; this requires providing scan copies of your ID. Confirmation takes some time, so if you are an unregistered user, consider that you cannot buy cryptocurrency instantly.

Step 2. Choose an exchange to buy Mona for Bitcoin

Fortunately, there are many platforms where to buy Monacoin for BTC. The most popular among them are Bittrex, QBTC, CryptoBridge, and Zaif (you can find the full list of the most prevalent exchanges for Monacoin on CoinMarketCap).

After creating an account on the chosen site, there will be automatically created an online crypto wallet for you. Most exchanges require verification of identity before providing users with addresses of wallet and allowing to exchange currencies. Keep your addresses in a safe place.

To exchange BTC for Mona, transfer the previously purchased Bitcoin to the online wallet of the exchange.

Step 3. Buy Monacoin

Terms of trade, a commission fee, and time of transfer vary on platforms. To buy Monacoin, you have to find the necessary trading pair (BTC-MONA), specify how many coins you want to purchase, and then, confirm the payment.

You can find out the price ratio of Monacoin to Bitcoin with CoinMarketCap cryptocurrency converter calculator.

Monacoin uses Lightning Network algorithm for conducting transactions; in addition to providing a high level of anonymity, the technology also enables instant payments, so you will not have to wait long for your BTC to be exchanged for Mona.

Where to store Monacoin

Every cryptocurrency needs a wallet to be stored; without it, users cannot send, receive, and keep the digital money. A wallet that unifies safety and ease of use would be perfect; unfortunately, if you choose reliability, the digital depository appears to be very massive or hard to connect to the Web. On the contrary, if you want your coins always to be at hand, there’s a high probability of losing your digital money.

Full node

There is an official Monacoin wallet, which can be downloaded at the official website. It is a hardware wallet that contains the whole blockchain, that’s why it is perfect for miners. If there is no malware on your computer, such way of crypto storage is pretty reliable. However, it is pretty memory-consuming, and you do not have access to it from other devices.

Lightweight wallets

Desktop wallet 

Electrum Monacoin

This wallet also has to be installed on a computer, but it does not download the whole blockchain, and therefore does not require much memory. However, this advantage has two sides; all the memory-consuming information is kept on the servers of the company, so the use of Electrum Monacoin implies trust to third parties.

Electrum is very convenient, and even an inexperienced user can easily manage it. You can download it on Monacoin.org.

Mobile wallet

Coinomi

Coinomi is a multicurrency wallet, which is available for Android OS. There is no fixed commission fee; it is variable, which gives users much opportunity to save.

The app contains Changelly and Shapeshift exchangers that allow trading the most popular cryptocurrencies without applying separate services.

Disadvantages

Proof-of-Work algorithm

Even though Proof-of-Work is perfect for decentralized principles, it has several disadvantages. Mining requires difficult calculating which further becomes more complicated, and it is fraught with high consumption of power. Considering that miners can sell their coins in order to pay off their electricity bills, it may negatively affect the currency exchange rate.

Besides, the reward for mining is halved every 1,051,200 blocks (the next halving will be 2020.09.06. Here you can find block reward halving time countdown); the more coins are mined, the less profitable mining is. In time, people will stop mining because of low income; the fewer miners, the higher the risks of a 51% attack.

Transactions in blockchain are conducted if most nodes confirm them, so if the most of miners agree not to confirm operations, 51% attack can occur.

Anonymity

Transactions cannot be canceled; they are registered in the blockchain, which stores such records from the very beginning of the cryptocurrency existence, and they cannot be deleted. Since there is a possibility of transferring money to the wrong address, most of the trading platforms require customers’ identity confirmation. In this case, confidentiality can play trick with users.

Besides, since SegWit separates information about users from other data, it’s hard to check transactions. Also, and the structure with signature needs maintenance, and miners are not motivated to do this, because they have a reward for conduction transactions, not for processing of signatures.

Should I invest in Monacoin?

It is hard to make Monacoin price prediction because the cost of all the cryptocurrencies is volatile and depends on different factors which is difficult to foresee. However, there is one important thing that can be the reason of Monacoin stability and even appreciation. It is state legalization. Japan legalized cryptocurrency, and Monacoin, as the most popular Japanese crypto money, got into different market areas, which made the coin more stable and reliable. However, the world is reluctant to implement the cryptocurrency in the financial area, so in such an aspect, Mocacoin has more advantages than other currencies.

Apparently, Mona welcomes technological innovations; such technologies as peer-to-peer payments, Lightning Network, SegWit, and Dark Gravity Wave, along with the support of Japan attract investors. It is a very promising currency that offers much more advantages than gigantic Bitcoin.

As well, a user-oriented approach which is reflected in the Proof-of-Work algorithm and full decentralization makes Monacoin one of the most demanded and attractive cryptocurrencies on the market. Of course, the developers can significantly improve the situation of their coin by promoting it to international investments. To meet such a global goal, they have to conduct a marketing campaign outside of Japan and translate Web services into other languages. Monacoin has good prospects for growth, and it’s sad to see that the developers are rather passive in this respect.

As well, the exchange rate strongly depends on the state of the leading currencies, Bitcoin and Ethereum, so Monacoin future is also dictated by the general mood in the cryptocurrency environment.

Anyway, technical analysis has a good forecast for the future of Japanese crypto coin; still, as usual, we do not recommend investing the amount of money the loss of which can significantly affect your financial situation.

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