What is MonaCoin (MONA)? [A Comprehensive Guide to MonaCoin]

What is MonaCoin (MONA)? [A Comprehensive Guide to MonaCoin]

By Mr.CryptoWiki | cryptocurrency | 20 Nov 2019


Joke coins seem to have become its own niche in the cryptocurrency market. Well, perhaps that’s a bit of a stretch, but there’s no doubt that there many projects and tokens have been launched with a less than serious intention - at least to begin with. 

The first token that comes to mind here is, of course, DogeCoin, a token that was literally takes after an internet meme based on a dog. That token has a market cap of $312 million currently - a joke coin has over $300 million invested in it and much, much more during the peak of the cryptocurrency market in late 2017/early 2018.

But that is not the only such token and, in fact, many tokens have come about that originate from jokes and memes, but have since gone on to tackle real use cases and offer sincere value. Silly or flippant beginnings does not reflect silly or flippant utility, as we discover in the token we’re looking at together: MonaCoin.

We’ll examine the history, purpose, expansion, partnership and competitors of what is described as “Japan’s first cryptocurrency” i.e. MonaCoin, which gets its origins from an internet forum meme.

The History of MonaCoin (MONA)

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The MonaCoin (MONA) project was launched on January 1, 2014, as was the result of a fork of the Litecoin (LTC) network. The identity of the founder(s) of MonaCoin is unknown, and they identify collectively under the pseudonym “Mr. Watanabe.” The project is described by these founder(s) as initially thought of as a game with the objective of the game being to discover hashes. The project receives both its name and its logo from a popular ASCII character on the 2chan internet forum, Mona, a cat.

MonaCoin was once a popular token, ranked as one of the top 20 cryptocurrencies on CoinMarketCap, but since the arrival of many more cryptocurrencies, and Bitcoin’s rise to a household name, MonaCoin has dropped in popularity. At its peak, MonaCoin was valued at roughly $15 with a market cap of just under $850 million. It is now valued at $1 with a market cap of $67 million.

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MonaCoin does have its own foundation, the MonaCoin Foundation, which is not associated with the creators of the project. This is a community run group that oversees work on certain aspects of the project, largely marketing.  

MonaCoin is often described as “Japan’s first cryptocurrency” and though its popularity has declined significantly, developers who support the project’s development have added support for SegWit and the Lightning Network. It is still relatively popular within Japan, being used to tip other users and have shrines erected in its honor. 

As a payments system, what separates it from the many other such tokens, if anything? Does it purpose extend beyond standing as a representation of Japanese popular culture?  

The Purpose of MonaCoin (MONA)

MonaCoin’s purpose is focused on payments through and through.  It had been designed with that single minded purpose and nothing more, which makes life difficult for a market and particular niche that is taking off even among the non-tech savvy. 

MonaCoin very much depends on its cult following to keep itself going. There are platforms where the token can be exchanged for electronics, coupons and other items. A Monappy website allows users to tip streamers with the token, and generally speaking, the video game industry finds uses for the MONA token.

The token has been approved by Japan’s regulatory body, the Financial Services Authority (FSA), which is indeed a real plus for the project. At least within the confines of Japan, it is a plus point that it is both approved by the FSA and present as an option in ATMs. 

MonaCoin is tightly linked to its place in Japanese culture and some have said that the language barrier has prevented adoption and development abroad. There is even a Japanese group called Virtual Currency Girls has a MonaCoin user.

MonaCoin features a lightweight client that runs as a part of wallet provider Electrum’s services, and can also be stored on the Coinomi wallet.

Perhaps then MonaCoin’s purpose is something a little more than acting as a means of payment, perhaps it a representation of Japanese culture and for that reason is very dear to those who hold the token. In Japan, at least, it is somewhat well known, and perhaps it will find a more specific purpose so that it continues to exist as a viable digital asset.

Interesting Facts

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Being a fork of the Litecoin protocol, the MonaCoin network shares certain properties with Litecoin but has some distinct differences: the network’s block generation time is 1.5 minutes and uses the Lyra2RE(v2) hash algorithm. Litecoin, by comparison, has a block time of 2.5 minutes and uses the Scrypt hash algorithm. Litecoin itself is a fork of Bitcoin (BTC). The total supply of MonaCoin is 105 million coins, which is also quite different from Litecoin’s 84 million and Bitcoin’s 21 million.

The particular algorithm that MonaCoin prevents ASIC centralization, as the algorithm is conducive to mining on CPUs and GPUs.

Controversies

MonaCoin has suffered an attack from one of its mining pools in 2018, resulting in the theft of roughly $90000. One mining pool allegedly withheld transaction blocks, with users on the MonaCoin subreddit describing issues that were occurring on the network, including double spends and incorrected confirmed payments. The thread on the subreddit described the issue to include seeing new blocks mined very easily and issuing new blocks rapidly. 

Smaller networks - especially those without a broad development team - are more susceptible to attacks and centralization, which is certainly a concern for MonaCoin.

Partnerships

MonaCoin has no partnerships to speak and is well and truly a decentralized cryptocurrency in the sense that it is run by the community, developed by the community and used almost exclusively by its community. Its use is largely limited to Japan, and the coin isn’t available on many exchanges or wallets. However, a few merchant outlets do accept MonaCoin as payment, besides a few ATMs that deal with MonaCoin. Exchanges that MonaCoin is available on include Bittrex, Zaif, UpBit and BitBank

A strictly payments focused token does not gain much in the way of partnership as a token like Ripple (XRP) does. Awareness and adoption are the critical requirements for such a network. It does help that ATMs and exchanges get on board, but it feels like MonaCoin is at a disadvantage here.

Competitors

MonaCoin is in a very tough space namely that of payments. The competitors in the use case of payments are numerous as they are considerable. Bitcoin, anyone? How about Litecoin, Bitcoin Cash (BCH), Stellar Lumens (XLM), Dash (DASH) and the myriad other tokens that are available on more exchanges and see greater liquidity?

The problem with tokens that attempt to become a payments-focused token is that they face the likes of Bitcoin, which is far more well known, liquid and tried and tested in the field. Naturally, people would deal with a currency that is widely accepted as opposed to one that has very limited usage circles. 

Perhaps it could be that MonaCoin will find a respectable level of use in Japan, but even so, Bitcoin is very popular in Japan with the country’s authorities already legalizing it as tender. It’s hard to see why any token would be considered over Bitcoin in any significant way when many of the world’s governments are beginning to accept Bitcoin as an asset.

While the MONA token may have sentimental or a certain cultural value for its holders, that sort of thing does not last very long - trends fade. Dogecoin (DOGE) was once ridiculously popular, and while it still maintains a certain amount of popularity, it is no longer the case that it is a token that can be recommended for investment.

Conclusion

Having said all of this, what can we make of the MonaCoin project? It has its origins in being a cryptocurrency for Japan, something that has both use and sentimental value for its native investors. However, the market has changed significantly since those days, with cryptocurrencies becoming virtually a household name - and Bitcoin is the king of the throne here. It’s hard to recommend any token that is payments focused over Bitcoin, given what it has become. 

Perhaps if you’re in Japan and within the circle that allows for the use of the MONA token, then this token could be considered a reasonable investment - it is still used in Japan according to Redditors. Besides that, it’s hard to recommend as an investment as it is just unrealistic to think that this could outperform similar assets in the long run.

However, nothing is set in stone in the cryptocurrency market where millions of dollars can literally disappear in seconds. Perhaps there will be a future in which technological implementations and the desire to use a national cryptocurrency specifically for one purpose. (for example, how citizens of developing nations  favour one particular mobile wallet). In MonaCoin’s case, this could be as a video game currency or as a tipping token - who knows? 


Mr.CryptoWiki
Mr.CryptoWiki

In crypto since 2002 ;)


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