What is Vertcoin?
Vertcoin (VTC) is a fork of Bitcoin that represents a peer-to-peer network with a digital coin. The main goal of Vertcoin is to build a decentralized financial system owned and supported by its users without the participation of centralized mechanisms, for example, banks. Vertcoin cryptocurrency is an open-source project for anyone who is ready to participate in the development process. Business owners are invited to add VTC as a payment option, miners, to launch a full node, and programmers, to create and improve code for the next generation. VTC was designed for ordinary users, not for ASICs owners. Anyone can mine VTC coins on their PCs, and such an approach makes the network as decentralized as possible. You can buy VTC on an exchange of your choice and then create a Vertcoin wallet to store and manage it in Guarda.
Vertcoin cryptocurrency was launched on 11/01/2014. No one raised funds for its creation, there was no ICO, and no pre-mine - only three blocks were mined before the official launch to check the network's performance. Blocks on the platform are generated every 2.5 minutes, with a reward of 25 VTC. All funds for project development have been received through charitable contributions. The team entered into a partnership with Litecoin, and as a result the Lightning Network technology was added in 2017. Later, the developers began to test atomic swaps with LTC. Vertcoin uses a similar algorithm to Litecoin - Scrypt - but with some changes. The main feature is based on the rationalization of RAM with protection through the Lyra2RE algorithm, which provides a serious level of security against attacks. Despite this, hackers tried to capture more than 51% of the hashrate using a botnet in 2015. As a result, the company lost more than $100,000, forcing the VTC team to implement the algorithms Lyra2REv2 and Lyra2REv3 with an improved security system to protect Vertcoin from further attacks.
How does Vertcoin work?
When Bitcoin appeared in 2009, only a small group of people were involved in the mining process. At that time, anyone could get BTC using a PC, but since then entire mining rigs have begun to appear, displacing ordinary users. The mining process on PC became unprofitable. A new technology called "ASIC miners", working with the SHA-256 (Bitcoin) algorithm, was created in 2013. Later, ASICs started to be used for mining on the Scrypt and got more profit than GPU and CPU miners. Vertcoin arrived in 2014 to try to solve this problem. The key task of the company is simple - the developers wanted to make VTC mining with the ASICs impossible, or at least very expensive. If someone even designs an ASIC-miner for Vertcoin, it very quickly becomes useless and unprofitable. Such a technological decision makes the network more decentralized. Of course, it cannot be said that centralized mining using CPUs or GPUs is now impossible, but the network becomes more secure with implemented solutions, and ordinary users can still mine VTC with good profit.
The Scrypt mining algorithm, also used in Litecoin, has been implemented in VTC with some modifications: LTC mining requires 1 Mb per channel, whereas in VTC 2 Mb per channel was required at the beginning, and after that the value doubles every few years. The key task of Scrypt is to complicate the block generation process by increasing the resource requirements used for computing operations. The key difference that makes it more difficult to monopolize mining is that the RAM is more demanding and the power consumption requirements are lower than in the case of SHA-256. The block generation speed in a Scrypt-based blockchain is approximately 30 seconds and difficulties are recalculated every 240 blocks. However, as we already know, ASIC miners were invented to work with the Scrypt algorithm and the interest in VTC grew in 2014. The mining process has become more complicated for miners using CPUs or GPUs.
The developers of the project continued to adhere to their ideas of decentralization of mining and integrated a new Lyra2RE algorithm. This requires low processing power and energy resources, and also provides high-speed data processing, improved level of data security, and additional ASICs resistance. It has been developed for both GPU and CPU mining. Lyra is a password system that uses a cryptographic algorithm to decode specific sequences. This technological solution has two main tasks: Firstly, to provide additional protection against ASICs mining. This is necessary because control over the network and its processes must not fall into the hands of attackers, and network users must be sure that mining will not become centralized. Secondly, this solution gives the opportunity for ordinary users to mine VTC cryptocurrency with good profit. Anyone can get rewards without expensive mining rigs or consuming a lot of electricity. If someone creates an ASIC for Vertcoin mining, developers can make a fork on the network to increase the memory requirements and thus make mining by ASICs useless and unprofitable. Such an approach gives increased interest to a digital coin, provides users a desire to participate in the democratic system development, and allows the system to remain decentralized.