You may have heard that Monero (XMR) is about to undergo a “hard fork” which will produce a brand new coin, Monero V (XMV). Originally this fork was scheduled for March 14 but was postponed to the end of April for a few reasons. First of all, the Monero network is going to be updated in just a few days so it makes sense to postpone for this reason alone. However, the reason given by the team behind Monero V is for further third-party implementation – which speaks volumes to all of those naysayers who warned that the Monero fork was going to carry risks. Of course, as with anything in the cryptocurrency space, you should proceed with extreme caution and know what you are getting into. With that said, I personally believe that Monero V is going to do very well and may take off rather quickly!
The Monero hard fork has been met with an overwhelming amount of skepticism over legitimacy as well as privacy concerns. However, as I already mentioned, the hard fork was postponed to ensure third-party implementation, such as MinerGate among others, and this is a very good sign. If reputable crypto-based platforms are integrating the Monero V then they must recognize it as a smart and valid move. Besides that, the Monero hard fork is coming at a time where many of the existing scams have been identified and are being safeguarded against at organizational levels such as recent moves made by Facebook to protect consumers. This not only protects individuals but also deters scammers from putting in the work just to be banned. These are the main reasons I believe the Monero V hard fork is the real deal.
Before we go any further, let’s explore the basic concept of a “fork.” Since the inception of Bitcoin, there have been several other coins known as either “altcoins” or “fork coins”. Altcoins operate on a brand new blockchain completely separate from any others. It may be based on or even copied from an existing coin or it may be entirely new. Ethereum ETH is an example of an Altcoin. A fork coin, on the other hand, is exactly what you might think – when a second blockchain is created from an existing one, effectively “forking” the chain. There are two types of blockchain forks: soft fork and hard fork. A soft fork is implemented more as an update to an existing coin where operations are carried out on a side chain while the original chain becomes less dominant. Segwit is an example of a soft fork to the Bitcoin BTC blockchain. A hard fork is a fork with major changes where an entirely new currency is created out of an existing coin’s blockchain, such as Bitcoin Cash. In cases of a hard fork, coin holders are usually rewarded with free coins of the new currency because the fork starts with a snapshot of the entire blockchain prior to the fork. As such, any coins held by private keys on the old blockchain will carry over under the same private key on the new forked chain. As mentioned above, Monero V (XMV) is a “hard fork” of the Monero blockchain and anyone holding Monero (XMR) during the split will receive 10 XMV coins per 1 XMR!
With such a large gift of essentially free money, it can be easily enticing to take part but many people still have concerns over safety. The development team behind this fork has gone above and beyond to ensure the safety of user’s privacy and to address every major issue that has been brought against them. A major concern has been over confidentiality. Previously, in an article about Cryptonote, we discussed how anonymous coins such as Monero work by using something called “ring signatures” to hide where a transaction started as well as where it ended. Many proponents of this system believed it would be possible to bypass this feature during the Monero fork potentially exposing users private keys and reducing the privacy of transactions. In reality, Monero V may actually be more secure by increasing the number of ring signatures from 5 up to 8 making transaction even more confidential than ever before.
Another significant difference is the implementation of “Mimblewimble”. This is a topic to get into more detail in a future article, but the core basics are two-fold: transactions and transaction amounts are obfuscated by cryptographic numbers called “blinding-factors” and even more exciting is that Mimblewimble features built-in scalability that is simultaneously resistant to blockchain analysis due to limiting information in legacy blocks to a simple list of inputs, a list of outputs, and a list of keys — and nothing else. Scalability is a major issue facing every blockchain and has been addressed in many ways, including in very rare cases, building it into the coin itself. Monero V will be one of those rare cases. Another way Monero V will differ from Monero is in supply. Monero famously removed the supply limit effectively creating an infinite amount of coins to be mined. This is good news for the miners but not really sustainable for regular users. Essentially Monero will undergo various periods of inflation as the available supply continues to grow indefinitely. By implementing a cap of 256 million XMV, the developers ensured that Monero V can undergo periods of healthy growth and gain value over time.
One final note on changes to the newly forked blockchain concerns mining. Monero introduced browser mining to the world. On one hand, this was a revolution that allowed anyone with an internet connection to mine cryptocurrency, opening up new possibilities for small-scale or prospective miners. Like a double-edged sword, however, a new breed of unethical miners emerged, using people’s CPU power to mine through their browser without their permission. In extreme cases, these “virus miners” would operate in the background until the hijacked device became unusable due to overheating! Monero V makes a point of addressing the darker side of this new mining possibility by implementing changes to the proof of work protocol. While these changes are not explicitly listed out, they are entirely focused on removing the possibility of unethical mining. Just one more reason why I believe the XMV development team can be trusted to deliver a very promising new option for crypto enthusiasts in the face of extreme skepticism.
Now you understand what is going to happen at the end of this month and you know a little bit about the new currency that will be created. You may even want to participate but are still unsure of the safest way to do so. There is no reason to be concerned with your current Monero holdings are completely safe. The fork should not affect your current coins, however, it is recommended that you hold them in a trusted local wallet or in a web wallet that is supported. The Monero V website has stated that even supporting exchanges such as HitBTC and Ovis will be safe for both holding current Monero and claiming Monero V after the split but holding locally or with a trusted web wallet, such as MinerGate, is the most recommended. The Monero V split will take place at block 1564965 on the Monero’s cryptonote blockchain (which will take place on April 30). During this time you will want to ensure your Monero is in the wallet of your choice and remains there until after the snapshot and split. After the snapshot is taken of block 1564965, you are free to move your Monero however you like without affecting your ability to claim your newly created Monero V. In order to claim the new coins you will have to wait for the official Monero V GUI wallet when it is available and keep an eye out for the official claim guide to be released by the Monero V team.
As it was stated earlier, MinerGate is planning to support the upcoming Monero hard fork. Again, anyone who holds Monero at MinerGate at the time of the fork ( ~30th April 2018) will be an owner of Monero V and will receive 10 times the amount held in Monero coins. MinerGate was among early supporters of the fork and has been working hard to ensure full implementation for its users, including web wallet and mining. Many MinerGate users already know that Monero is often the most profitable currency to be mined for small setups, making the implementation of Monero V all the more exciting.
If you are a current MinerGate user or want to join and mine some Monero XMR in preparation for the fork you can rest assured that it is safe to keep your Monero XMR coins on MinerGate before, during and after the hard fork. MinerGate users don’t need to take any additional actions to claim XMV tokens to their personal account, as they will be distributed automatically. MinerGate team is waiting for future updates from Monero V, in order to complete a demon audit, prevent possible key reusing attacks and make withdrawal process of XMV as safe as possible.
We will keep you updated and informed about further progress with MoneroV.
Thanks for being with us!