In recent days, Monero (XMR) has had the biggest gains of the Top 20 Tokens category, with its coinmarket cap gaining an impressive 34.32%. This is due, in no small part, to all the buzz surrounding a proposed hard fork, known as Monero V (XMV).
Ranked No. 9 in the global market with its current value at $373.35, Monero is the premier Bitcoin alternative for those seeking anonymity. Its blockchain technology protects privacy in three ways:
- Ring signatures
- Stealth addresses
- RingCT, enabling the sender to hide among other transaction outputs, receiving address and the amount of transaction respectively.
Monero is private, untraceable and decentralized.
Hard forks are nothing new in the cryptocurrency market. Bitcoin, for example, has had many hard forks over the last year. Recently, Litecoin was hard forked following controversial comments made by its founder, Charlie Lee. Forks tend to drive up the price of the parent currency.
Monero V’s roadmap cites Monero’s infinite coin supply, high transaction rates and “the centralization of decision-making” as the primary motives behind this new fork. In a recent sneak peak video, the developers revealed their latest launch, the GUI wallet. Monero V will be created, and Monero holders will get 10 XMV tokens for each XMR.
The catch: they’ll need access to your Monero private key to award those XMV tokens, and they’ve premined 5% of the tokens, equal to 10 million XMV. Color me highly skeptical.
“The Monero V development team will manage 5.859375% of the total supply of Monero V coins, using it to enhance the development of all future works.”
I’ll let that sink in for a moment and tackle the private key issue first. They don’t really have any other options, as the Monero V blockchain, up to the point of the fork, will literally be the Monero blockchain. There’s no way to accomplish awarding the tokens with newly generated keys. However, it would be highly recommended that anyone considering making the jump moves their XMR to a new wallet until Monero V’s code has been reviewed. Exercise your better judgement.
As for the premining, it certainly raises suspicion, as Monero V’s cap will obviously drive up the value of those 10 million tokens. With the demise of BitConnect and other shitcoins-my term for scamcoins-the crypto community has become justifiably wary of new forks, as seen by the reactionary criticism on Reddit.
All trolling and fear-mongering aside, it’s interesting to note that one major difference is Monero V’s lack of a tail emission. Monero block rewards will never drop to zero. Block rewards will gradually drop until tail emission kicks in at the end of May 2022. At this point, rewards will be fixed at 0.6 XMR per block.
Bottom line: miners won’t work for free. Because of the dynamic blocksize, competition between miners will cause fees to decrease over time. However, if mining Monero V is not profitable due to a high cost and low reward, miners lose their incentive and will stop mining, reducing the security of the network. Tail emission ensures that a dynamic block size and fee market can develop. Without it, Monero V has no way to secure their blockchain in the longterm.
As always, I’ll leave it up to you, the wise (you must be if you’re reading this), discerning reader to draw your own conclusions.