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May 15, 2020

12 min

9

What is Verge Blockchain: Complete Guide

1 Comments

9

12 min

Since Bitcoin was created and launched in 2009, more than 1500 different cryptocurrencies, collectively termed altcoins, are now available to buy, trade and sell. Verge is an interesting example of an altcoin as it is faster, cheaper and offers even more privacy than Bitcoin!


What is Verge (XVG)? 

Verge (XVG) is a decentralized open-source cryptocurrency with a strong focus on anonymity and privacy. Launched in 2014 by Justin Sunerok as DogeCoinDark and rebranded into Verge in 2016, the company became famous after partnering with Pornhub in 2018, where it is possible to pay for a premium subscription with Verge (XVG). Verge is an open-source cryptocurrency, meaning it is not backed up by any company. The developers categorize Verge as an easy-to-use currency for everyday transactions. 

Despite having a transparent ledger where all the transactions are shown, the addresses or identities of the users cannot be inferred due to IP obfuscation by Tor (see below). The mission of Verge is to improve on the shortcomings of Bitcoin and provide individual users and businesses with a decentralized, fast and efficient way of performing confidential transactions.


Brief history 

The project was started in 2014 with the aim of rendering blockchain transactions completely anonymous and untraceable. 

In February 2016 rebranding Of DogeCoinDark to Verge took place to separate the project from “dark” associations. After that, the team has been fully committed to promoting the coin and encouraging adoption.

In 2017, a somewhat controversial incident took place: John McAfee, a prominent personality in the cryptocurrency world, posted a tweet about Verge, calling it a good coin to invest in and making a price prediction of $15 for XVG. This, allegedly, led to a further increase in the price of Verge to $0.3, which became its historical high, despite McAfee later withdrawing his claims and even discrediting the currency and its protocol in early 2018. 

In November 2017, CoinPouch, a wallet supported by the Verge team, lost around 125 million XVG as a result of a hack. To this day, it is not clear what exactly happened, as neither party wants to take responsibility, and the account that the coins were transferred to suggests that the hackers might have sold them through an exchange.

Verge became famous for partnering with Pornhub where it is possible to buy Premium subscription with XVG. This partnership is considered one of the biggest cases of cryptocurrency adoption by a totally different industry.

In April and May 2018, Verge suffered from 51% miners (double-spending) attacks. Basically, the hackers forced the system to use only one algorithm by altering block timestamps. The mining difficulty dropped significantly; as a result, they were able to incorporate a new block every second. Verge experienced a total of 3 attacks in a couple of months. 


Verge (XVG) technology

The key features of Verge include:

  • Tor IP obfuscation. Tor (an acronym of The Onion Router, the original software project name) is an IP obfuscation service which ensures anonymous communication across a layered circuit-based network. Tor is integrated in all of Verge wallets, thus eliminating any possibility that the communicating peers can be identified through network surveillance which usually relies on knowing its source and destination.
  • Multi-algorithm mining. Verge Currency uses Proof-of-Work (PoW) mining principle and one of the very few cryptocurrencies to have multi-algorithm support. Specifically, Verge utilizes 5 different hash functions: Scrypt,  Lyra2rev2, X17, blake2s, and myr-groestl. Such design allows for equal access to different groups of miners. Mining is the only way to create new XVG since Verge is not a private company funded by pre-mined coins or an ICO.
  • Atomic Swaps. Atomic Swap technology, or atomic cross-chain trading, is a technology that enables direct peer-to-peer trading across different blockchains with BIP65 support, thus eliminating the need for trusted third parties or intermediaries. In the future, traditional centralized exchanges can be replaced by decentralized exchanges (DEX), which would completely eliminate the need to rely on  intermediaries. By enabling Atomic Swaps capability, Verge takes a proactive step towards a decentralized future.
  • Dual-key stealth addressing. Dual-Key Stealth Addressing enables senders to create an unlimited amount of one-time destination addresses on behalf of the recipient without any interaction between the parties whatsoever. Stealth addresses provide an additional level of obfuscation for further protection of the receiving party when performing transactions with Verge. If multiple users send funds to one stealth address, these transactions do not appear on the blockchain as multiple payments to the same address. Instead,  they look like multiple payments going to different addresses.
  • Verge runs on a Proof-of-Work consensus mechanism and uses five types of mining algorithms: Scrypt, X17, Blake2s, Groestl, and Lyra2rev2. Unlike other anonymity-focused digital currencies, e.g., Monero and Dash, it offers more transparency in public verification of transactions.
  • The block time is 30 seconds vs Bitcoin’s 10 minutes, and the capacity of Verge is 100 transactions per second as opposed to Bitcoin’s 7. 
  • The transaction fee is 0.01 XVG, which is practically free. 
  • The maximum supply of Verge is limited to 16.5 billion coins, which is supposed to provide a more fair distribution in the community and, to a certain extent,  prevent market manipulations, 
  • Wraith protocol. For the first time in the history of cryptocurrency, Verge made it  possible to choose between public and private ledgers while staying anonymous in both cases. 

Technology-wise, Verge does not utilize cryptography as much as its fellow privacy-focused cryptocurrencies (Monero, Zcash etc). The main feature of Verge is the ability to obfuscate the users’ IP address and location using I2P (Invisible Internet Project) and TOR (The Onion Router) network layers. While anyone can view the transactions that occur on the Verge ledger, the participants’ location or IP cannot be identified. All Core Verge wallets offer built-in TOR integration, supported by an additional level of SSL (Secure Sockets Layer) encryption. 


Why not simply use VPN?

When communicating via Virtual Private Network (VPN), the only encrypted part of the connection is from you to your VPN provider. From there on, the communication stays unprotected. Therefore, VPN service requires trust that your provider does not disclose information, logs, and records about your operations. On the other hand, with Verge, the user does not have to rely on any third party for the protection of confidentiality, which makes it more reliable and secure than using a VPN.


Perspectives 

One feature currently under development is RSK smart contracts. RSK is the first open-source smart contract platform with a 2-way peg to Verge that also rewards the Verge miners via merge-mining, allowing them to actively participate in the Smart Contract revolution. The aim of RSK  is to add value and functionality to the Verge ecosystem and increase scalability by enabling smart-contracts and near-instant payments. RSK can achieve the same security as Verge in terms of double-spend prevention and settlement finality, since the blockchain is secured by merge-mining.

The implementation of the Wraith protocol was an important event in the history of cryptocurrency in general. Verge is a stable member of Top-100 cryptocurrencies in terms of market capitalization, it has established several long-term partnerships with important players in the industry, and has an ambitious roadmap. In general, the consensus among the members of the cryptocurrency community is that this altoin has occupied its niche and will experience a bright future. 


Takeaways

Created in 2014 under the original name  DogecoinDark, Verge (XVG) is an open-source cryptocurrency and a privacy-focused coin with a team of international developers. Verge uses Tor and an anonymous network layer I2Pas in order to hide the IP addresses and locations of specific transactions. The block time (and transaction speed) of Verge is estimated to be at 5-30 seconds thanks to the use of SPV (Simple Payment Verification). Recent introduction of the Wraith Protocol upgrade enabled users to send and receive payments completely anonymously across the Verge blockchain via stealth addressing services. Following the update, Verge users are reportedly able to switch between private and public ledgers on the Verge blockchain. Verge offers five different Proof-of-Work algorithms for mining – Lyra2rev2, Scrypt, X17, blake2s and myr-groestl, which significantly expands the pool of miners and serves to minimize the possibility of double-spending attacks. 


Verge Website

For the ultimate source of information, visit Verge Official Website.


Verge Blockchain Explorer

Track your Digibyte transactions with Verge Block Explorer


Verge Reddit

Join Verge subreddit to discuss the currency with the rest of the community.


Verge Twitter

Follow Verge on Twitter to keep up with the latest updates.


How to store and manage XVG

Looking for a robust wallet to safely store your crypto? Verge (XVG) is supported by multiple wallet providers, including Atomic Wallet. In Atomic, you can manage and exchange XVG, buy XVG with your bank card, and swap XVG with Atomic Swaps – everything you need in one wallet application. Atomic Wallet empowers you with full control over your funds since your Private Keys are protected with a mnemonic seed and never leave your device. Atomic Wallet provides you with one of the best options to store, send, exchange, and buy XVG. Install the app now and manage your XVG right in the Atomic Interface.

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1 comment

GodRACE
May 26, 2020 01:53 am

Very insightful read as I hold some XVG and didn’t understand it’s usefulness until now

+1

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