MonaCoin (MONA) Definition

What Is MonaCoin (MONA)?

MonaCoin (MONA) is a digital currency used predominantly in Japan. It was designed as a payment network for peer-to-peer transactions, bypassing exchanges or third-party involvement. The cryptocurrency was created in 2013 and launched the following year by an anonymous individual whose identity has never been confirmed. MonaCoin generally uses the identical blockchain as Litecoin. As Japan's first cryptocurrency, MonaCoin was named after an internet meme—a cat-like figure created using ASCII characters.

Key Takeaways

  • MonaCoin is a cryptocurrency that is predominantly used in Japan.
  • Like Bitcoin, MonaCoin uses the proof-of-work operating protocol.
  • The MonaCoin blockchain can typically process transactions faster than Bitcoin.

Understanding MonaCoin (MONA)

MonaCoin is a cryptocurrency launched in 2014. It was developed for use in Japan by an anonymous inventor called Mr. Watanabe. It was forked from Litecoin but does not use the same Scrypt algorithm. Rather, it uses the Lyra2REv2 algorithm, which uses less power. It is also resistant to ASIC mining machines.

MonaCoin has an active community of developers and users. It was one of the first coins to implement SegWit in its blockchain. Transactions using the coin are much faster compared to Bitcoin. MONA can be purchased using Japanese yen (JPY) or Bitcoin at cryptocurrency exchanges or smart ATMs in Japan. The coin is mainly used for tipping in online games. Some stores in Japan also allow purchases using MonaCoin.

While the Monappy platform is the unofficial hub of the MonaCoin community, MONA also trades on several Japan-based digital currency exchanges. MonaCoin has been approved by Japan's Financial Services Agency, which deemed cryptocurrencies to be a legal method of payment.

Speculation about why MonaCoin was created often focuses on a cultural desire in Japan to create national versions of well-known products. This desire is borne out of a demand for products and services that feel relatable by being created in Japan and having Japanese documentation and content written in Japanese.

Despite its strong association with Japan, MonaCoin is not designed as a national cryptocurrency like Iceland's Auroracoin.

Special Considerations

MonaCoin miners earn MONA rewards for processing new blocks of MonaCoin transactions. The amount of MONA paid as a block reward is, by design, halved every 1.051 million blocks. The reward per block is 12.5 MONA.

With the MONA block reward halving approximately every one million blocks, the block reward changes about every three years. The most recent halving occurred in the early summer of 2021.

Hackers have made away with MonaCoin by hacking exchanges and taking advantage of vulnerabilities in MonaCoin's storage app Monappy to hack it. The first hack occurred in 2018 when cryptocurrency worth $60 million was stolen in Japan from the virtual exchange Zaif. In a second hack a year later, an 18-year-old hacker stole 15 million yen worth of MonaCoin from 7,700 Monappy users.

Supply & Price of MonaCoin (MONA)

The total supply of MonaCoin is set at 105.12 million. The total supply in circulation was 65.73 million as of June. 6, 2023, and its market capitalization was $25 million.

The price of MonaCoin has remained below $2.00 for most of its history. For the first four years after its 2013 founding, the coin's price did not rise above $1.00 until MONA briefly traded for $16.61 in December 2017. In early 2022, MONA's price hovered around $1.00.

By the end of August 2022, MonaCoin's price hovered around $0.48, following a price decline in the global cryptocurrency market. As of June 6, 2023, MONA traded at $0.38.

MonaCoin adjusts its mining difficulty every block, so like Bitcoin, it becomes harder to mine over time.

How MonaCoin (MONA) Is Used

MonaCoin was one of the first coins to implement Segregated Witness (SegWit). Therefore, it has a faster transaction processing time than Bitcoin and other cryptocurrencies. When MonaCoin was introduced on the online Japanese forum 2channel (now 5channel), Mr. Watanabe stated that the cryptocurrency was not a security.

It was noted that the coin was part of a game whose goal was to find hashes in the MonaCoin network. MonaCoin was meant to be similar to points spent in the Monacoin network. MonaCoin is commonly used for a couple of different purposes:

  • Tipping: MonaCoin is frequently used through third-party mobile applications to pay tips, such as in online games.
  • Payment: MonaCoin is accepted as payment by some Japanese stores, including online and brick-and-mortar stores. Monappy is an online platform where MonaCoin holders can exchange MONA for digital assets like coupons, electronics, and other items.

How to Get MonaCoin (MONA)

If you're interested in buying MonaCoin, this is how the process works:

  1. The transaction is initiated and submitted to the MonaCoin blockchain. Using a cryptocurrency exchange such as Bittrex or Zaif, which lists MonaCoin, you can initiate a transaction to purchase MonaCoin. You need JPY or a cryptocurrency to buy MONA.
  2. MonaCoin blockchain processes the transaction. Your MonaCoin transaction is processed using the proof-of-work operating protocol, which requires miners to validate the transaction. At the same time that miners process MonaCoin transactions, new MonaCoin is minted and paid as rewards to the miners.
  3. MonaCoin blockchain is updated. Within an average of 1.5 minutes of initiating your MonaCoin purchase, the transaction is complete, and the MonaCoin blockchain becomes longer by one block.
  4. MonaCoin is stored in your digital wallet. Your newly purchased MonaCoin is accessible through a digital wallet. That wallet may be hosted by the exchange where you purchased the MONA or can be a non-custodial wallet such as a hardware device that enables offline storage.

Where Can I Buy MonaCoin?

You can buy MonaCoin through cryptocurrency exchanges, including Bittrex and Zaif, which are based in Japan. You can also purchase or trade MONA on FinexBox and Coinex. You can also visit a smart ATM in Japan that supports MONA purchases, in addition to using the Monappy platform.

Is MonaCoin a Good Investment?

MonaCoin is used mainly for tipping in online games, and its use is somewhat isolated to Japan. You may decide to buy and use MONA, especially in the Japanese economy, but you should be aware of MonaCoin's limitations before making any purchase.

What Can I Buy Using MonaCoin?

You can use MonaCoin to pay tips to gamers. You can also buy digital assets and other goods using the section of Monappy that functions as an online auction site. MonaCoin holders can pay for some goods and services in Japan using MONA.

The Bottom Line

Bitcoin was the world's first cryptocurrency and remains the most popular. Other digital currencies were developed to mimic its success. MonaCoin was established in 2013 by an anonymous individual in Japan. Approved by the country's financial services agency, MONA can be used to give tips or use as a payment method for online purchases or those made in physical stores. If you want t purchase or trade coins, start with a digital wallet. Coins are available on several exchanges.

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

Article Sources
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