What is Verge? Verge is one of the so-called privacy coins. This means it’s competing against industry-leaders Monero and Zcash. Verge became famous in the altcoin boom of 2017/18 when one of John McAfee’s tweets helped to boost its price for thousands of percentages. This is the Verge beginner’s guide.
Verge beginner’s guide – it’s a privacy coin
Let’s put Verge in the correct category in the crypto universe. We divide cryptocurrencies into three categories: platforms, tokens, and currencies.
Ethereum is the industry leader in the platform category. Ethereum is an entire ecosystem for Dapps and smart contracts. Other platforms include EOS and TRON. Tokens, on the other hand, are created on these platforms. They provide utility inside a specific program. You might have heard of Chainlink and Basic Attention Token.
Currencies are the third clear category. They are meant to function as digital P2P money. The most famous example is, of course, Bitcoin. You have probably heard of Litecoin and Bitcoin Cash as well. Currencies can be divided into a couple of subcategories and privacy coins are one of them.
This category has currencies, which offer privacy features. It means the user can hide all or part of the transaction data (sender, receiver, transaction amount, IP address) when using these coins. Monero is the best-known privacy coin and Zcash is clearly number two in the market. Verge belongs here as well.
Verge is known in exchanges by the acronym XVG. Let’s dive into the history of this coin next.
Verge was born before the ICO boom
Verge’s history can be traced all the way to 2014. Few people know that it’s a currency based on Dogecoin. This is the reason why Verge was called Dogecoin Dark in the beginning.
However, we have to make one thing clear. Verge was not hard-forked out of Dogecoin like Bitcoin Cash was forked out of Bitcoin. Verge has the same code base as Dogecoin, but a blockchain of its own. You could think of how Litecoin is based on Bitcoin.
The name Verge wasn’t used until 2016 when the project was re-branded.
The man behind Verge is Justin Vendetta aka “Sunerok”. If you have been in the crypto space for less than two years, there’s a good chance you have never even heard of Vendetta. Or Verge, for that matter. Both Verge and its founder had lots of media attention in early 2018 and late 2017.
In the beginning, some other Verge team members were known only by their nicknames. This is also the case with Monero and some other privacy coins. You can check the Verge team from verge.com/team.
The image above has the main developers of Verge. The project is still community-run, which means there isn’t a fintech company behind it and there are no office buildings or headquarters anywhere.
Almost every cryptocurrency created after 2016 was born through an ICO. This means there is a fintech company behind it, who organized the crowdfunding and decided the token distribution. This means that the development is controlled by a small team and there is a CEO deciding critical matters.
Verge was founded when ICOs didn’t really exist. There were some crowd fundings organized even in 2014 (like Ethereum), but only a few. This means Verge doesn’t have a big war chest and the development is run by its community.
This leads obviously to one weakness, which is the lack of proper funding. Verge has financed its partnerships and developments by simply collecting XVG tokens from its community.
The McAfee boom and Pornhub
Verge is still an unknown cryptocurrency to many enthusiasts. It wasn’t really until late 2017 when the project really got mainstream attention. If you were an investor in the crypto scene in December 2017, you don’t forget the meteoric rise of XVG.
Verge price started to move in the summer already, but the major boost was given by John McAfee with the following tweet.
I am inundated by people asking me for recommendations on cryptocurrencies. If you would use your heads you would figure out that the privacy coins (anonymous transactions) will have the greatest future. Coins like Monero (XMR), Verge (XVG), or Zcash (ZEC) cannot lose.
— John McAfee (@officialmcafee) December 13, 2017
Verge’s massive price rise started the “McAfee boom” on a larger scale. Investors started to follow McAfee’s tweets closely and buy whatever coin he was mentioning, which made the price go up, of course. Eventually, McAfee stopped recommending coins.
Verge’s price crashed hard after December 2017 and it hasn’t still recovered from that loss. When this article is written (April 2020), XVG is still about 99% down from its ATH price. The “crypto winter” of 2018 was especially tough for Verge since they were hit by several unpleasant surprises.
There was a messy crowdfunding campaign in 2018, which kept Verge on the news for the wrong reasons. There were also two 51% attacks to the Verge blockchain, which forced the project to hard fork. The biggest buzz was in March of 2018 when Verge published a partnership with the adult content website PornHub.
In a way, it makes a lot of sense for a privacy coin and an adult website to co-operate. Few people want others to know they are purchasing such content, so using XVG as a payment method could be a solution. Behind this, there is a partnership with a company called Mindgeek, which owns several adult content websites.
Verge halvings, wallets and Paycent
Verge had also a halving event in March of 2018. The block reward was cut from 1560 XVG to 730 XVG. This is a similar halving that takes place with Bitcoin and already has taken place with Litecoin, Bitcoin Cash, and Bitcoin SV in 2019-2020. However, the XVG price action doesn’t follow the same pattern Bitcoin does.
There was also another block reward halving in late 2019. The previous reward of 730 XVG was cut further to 400 XVG. As you can see, the halving isn’t exactly 50% in Verge’s case.
In 2018, Verge published a brand-new Android wallet. The XVG coin was also listed in Bitfinex, Huobi, and Bithumb, which are significant exchanges. Verge agreed also to a partnership with NetCents Technology. This will pave the way for mass adoption in the future.
In 2019, Verge announced a partnership with PayCent.
— VergeCurrency (@vergecurrency) May 25, 2019
This is a so-called dual wallet, which means it supports both cryptocurrencies and fiat currencies. It has also a debit card included. This partnership makes it easy for a Verge user to pay groceries or any other items with XVG. You can read more about the partnership from this link.
Verge also published an iOS wallet and several software upgrades in 2019. The project also celebrated the 5th anniversary in 2019. Now they are working with Ledger Nano support, which would be another important step.
Wraith Protocol offers optional privacy
Verge’s blockchain is similar to Dogecoin and Bitcoin. This means it’s public by default, on the contrary to Monero. You can browse transactions any time with a Verge Explorer. There is a common misconception of privacy coins, that they’d have private blockchains. This isn’t the case.
Verge published a significant upgrade regarding this matter in early 2018. This is called the Wraith Protocol and it was an eagerly awaited upgrade at the time. Wraith Protocol gives the user the choice between a public and private transaction.
If you have heard about Zcash, that is another privacy coin where this option is available. Monero, on the other hand, is always private.
See the info graphics above. That’ll explain how the Wraith Protocol works.
If you want to hide your transaction, it’s masked using stealth addresses. Monero uses similar technology to hide its transactions too. This means the funds are moved to the receiver using a temporary stealth address, so the real receiver can’t be seen from outside.
Verge is using TOR and I2P networks
Let’s go a bit deeper into the tech behind Verge. As you know by now, it is a so-called privacy coin. This means Verge will give you privacy, that isn’t available on the Bitcoin blockchain. People often start to think about criminal use, but privacy is for everyone and especially for corporations.
Using TOR and I2P networks is probably the most important feature of Vege. TOR means The Onion Router, and some people might recognize this abbreviation from news related to the dark net. The purpose of TOR is to hide the user’s IP address by routing the traffic through a network of TOR nodes.
In a normal situation, your internet traffic is routed through ISP servers. When using the TOR network, your IP address changes so many that no one can track it. The Invisible Internet Project, I2P, is an advanced version of TOR.
Verge is using both TOR and I2P, which provides its users’ anonymity. You can read more about TOR and I2P and their differences from this article.
Verge Beginner’s Guide – Verge vs Bitcoin
As mentioned earlier, Verge is based on Dogecoin, which is in turn, based on Bitcoin. This means that Verge and Bitcoin share many technological similarities. For example, Verge is using a Proof of Work consensus algorithm, which means the blockchain maintenance is done with physical mining devices.
Bitcoin mining has been dominated by ASIC miners for a long time. This is not the case with Verge, because the hashing algorithm is different. The hashing algorithm (also called as the mining algorithm) defines if the mining consumes more memory or CPU.
Bitcoin is using the legendary SHA-256 hashing algorithm, but Verge supports five different algorithms: Scrypt, X17, Lyra2rev2, myr-groestl, ja blake2s. You might have heard of Scrypt before because that’s the one Litecoin is also using.
Because Verge supports several mining algorithms, it doesn’t make sense for ASIC manufacturers to build five different models for just one coin. Therefore, Verge mining can be done with GPU rigs too.
There are also other differences. The Verge blockchain has a block time of 30 seconds, while Bitcoin has 10 mins. This means that Verge transactions are much faster and quite fast compared to any rivaling coin. For example, Litecoin has a block time of 2,5 minutes and Bitcoin Cash 10 minutes.
Verge is capable of ~100 TPS (Transactions Per Second), but in the future, it’d reach 2000 TPS. Bitcoin can handle less than 10 TPS at the moment. Verge transaction fees are 0,1 XVG, which means they are practically free.
As mentioned in the history section, Verge is using block reward halvings, just like Bitcoin. Verge rewards are being cut ever 500,000 blocks. The next halving, from 400 XVG to 200 XVG, occurs at the block 4,200,000.
When this article is published (April 2020), we’re at the block 3,996,413. Verge is also quite close to the maximum amount of coins ever released. There are currently 16,243,485,143 XVG circulating from the maximum supply of 16,555,000,000 XVG. This means the XVG inflation percentage is very small.
Verge vs Monero
Previously, we compared Verge to Bitcoin. Since this is a privacy coin, we’d also compare it to Monero, which is currently considered to be the #1 in the privacy niche.
You might want to check first the video below, which is comparing several different privacy cryptocurrencies. It doesn’t talk about Verge, but since you know how Verge works, it’s still very useful.
Let’s also go through some of the main features and differences between Verge and Monero.
Monero uses also the Proof of Work consensus algorithm, so it’s a mineable coin, just like Verge. While Verge supports five different hashing algorithms, Monero is using CryptoNight. They released an improved version of this in 2019, called the CryptoNightR.
Monero has tried to remain ASIC resistant since the beginning. This means that they’ve tried to use a hashing algorithm, which wouldn’t be profitable for ASIC manufacturers to build a microcircuit for. But, the development of ASIC devices has been so rapid, that Monero has been forced to hard-fork several times to remain ASIC resistant. Verge doesn’t have this issue.
Verge is also faster and lighter of the two. Monero’s blockchain is about 10x in size due to the heavy privacy protocols it’s using. Monero block time is 2 minutes compared to Verge’s 30 seconds. In practice, it (which one is faster) depends on how many confirmations your wallet software or exchange requires.
When we look at the privacy features, Monero is better. Verge has one advantage and that is the TOR/I2P. Monero is not hiding your IP address, so users must have a VPN software as extra protection.
It’s obvious, that Monero is a more complete privacy coin out of these two. Verge is offering a much more private solution than Bitcoin, but it’s not completely private either. The optional privacy through the Wraith Protocol is currently an advantage for Verge.
Many exchanges have booted out privacy coins in the past year due to increasing AML regulations. This might be a big problem for Monero in the near future.
Verge as an investment
Verge is competing against tough opponents in the field of privacy coins. Monero has dominated this field for years continues to do so. Verge and Monero have some similarities in the project leadership. Both are run by the community, which some see as a big advantage.
Others point out the lack of funding when there is no fintech company supporting it. This is where Zcash differs from the two. Currently, the pecking order is clear: Monero, Zcash and the rest (Verge, Zcoin, PIVX, Bitcoin Private). Verge is leading “the rest” group.
There was a time when privacy was a big topic in the crypto community as well. Now it seems like privacy coins have lost the race to platforms and staking. Even if privacy is constantly discussed in public, it doesn’t seem to interest masses enough.
It doesn’t help that coins like Monero are often mentioned negatively in ransom(ware) cases. ‘WannaCry’ was a famous attack a couple of years ago. The creators demanded payment in Monero in order to unlock your computer files.
As mentioned earlier, there is also increasing pressure to kick out privacy coins from exchanges. Some analysts see this as a big threat while some think it can be solved. One thing is certain: AML regulations are only getting tighter.
Verge is currently number 86 in the cryptocurrency rankings. It has a market cap of ~42 million USD, which is only a fraction of the ATH market cap of 4 billion dollars (December 2017). As a comparison: Monero has a market cap of 1 billion USD and Zcash about 350 million USD. These two are in a clearly different category.
Verge is doing well compared to rest. Zcoin, PIVX and Bitcoin Private are all smaller coins.
It’s currently difficult to see how Verge could reach Monero or Zcash in the market cap, at least significantly. The RSK smart contract integration will be a big step, though. This will enable smart contracts and increase Verge’s capacity to 2000 TPS.
The general problem Verge has, is funding. There never was an ICO, so there’s no fintech company with a war chest behind the project. Verge must crowdsource funds in the future as well from its community.
Verge price and how to buy Verge
If you want to invest in Verge, you’ll probably get the best price from Binance. You can buy XVG with bitcoins, which you can buy with fiat money first from Coinbase. Binance also supports a credit card deposit, but it’s not recommended due to high fees. Verge is also available in Bittrex, which is a well-known and reliable operator. XVG can be bought with bitcoins from there as well.
Once you’ve bought XVG, we recommend moving them to safer storage. Go to vergecurrency.com/wallets for alternatives. There are desktop wallets for Windows, Linux and Mac OS and mobile wallets for both Android and iOS.
Stay up-to-date by following the official Twitter handle @vergecurrency and the Reddit page /r/vergecurrency. We recommend following the Twitter account of “Sunerok” Justin Vendetta as well. The official website is vergecurrency.com, where you’ll find an FAQ page, the black paper, Verge wallets and more.
Image Credit: iStockPhoto / eclipse_images