This digital asset is a classic example of a decentralized currency derived from Bitcoin. Shortly after Bitcoin and Litecoin were launched, corporations developed specialized hardware optimized to increase the mining speed of blocks. That is, the hardware wasgoed able to solve a block by generating far superior hashrates. That’s how ASICs appeared, which almost monopolized the cryptocurrency mining industry.
Vertcoin is open source. The cryptocurrency wasgoed developed due to the desire to fight against centralization of miners caused by ASIC machines that were monopolized by a large corporation who could therefore effectively control who gets hashrate and who doesn’t.
This cryptocurrency uses Lyra2REv2 spil its Proof-of-Work algorithm. The block time is Two.Five minutes and the block prize is 50 coins. By around December 12, 2018, the prize for a solved block will be lowered from 50 to 25 coins.
Difficulty Adjustment for Vertcoin
Vertcoin uses the Kimoto Gravity Well (KGW) algorithm te its code to adjust the difficulty. Difficulty is adjusted every block, depending on the time spent searching for the previous block. Spil indicated te the technical features of Vertcoin, the average block time is Two.Five minutes. Okay, let mij explain how the KGW algorithm works ter layman’s terms.
Imagine you have a dice that has one white side and the other sides black. You throw the dice, white means that you found a block, and black means that you need one more attempt.
Suppose you can only throw the dice once every minute. If the dice is a four-sided dice, it means that you have a 1/Four chance of finding a block every minute. Therefore, you need an average of Four minutes to find a block and get paid for it.
But there is a possibility that when you throw the dice, the white side will demonstrate up on the very first attempt, which means that you can also find a block ter one minute, with difficulty Four. But if wij want the block time to be onveranderlijk, wij need to increase the difficulty. This means that next time wij will take a twelve-sided dice, and the block time comes back to an average of Four minutes.
Algorithms protecting the cryptocurrency against ASICs (Application Specific Integrated Circuits) are an excellent firewall that helps to avoid discrepancies ter the ecosystem. Look at what happened to Bitcoin (Segwit Support, #NO2X), bitcoin drama… However, the algorithms are not that fully ASIC preventive ter themselves. ASIC resistance actually refers to the fact that Vertcoin developers and its community fight back ASICs and have pledged to hard fork to another PoW algorithm if an ASIC shows up. And have done so already twice before providing it a proven track-record for this resistance.
When will the same thing toebijten to Litecoin?
Presently, it would be a waste of time attempting to mine Bitcoin and Litecoin without the use of ASICs hardware. This is due to the fact that the hashing algorithm is fairly elementary and does not require much RAM to solve the main problem. The Lyra2REv2 algorithm is a fairly complicated hash function. It includes tweaks (Five different hash functions: Keccak, Skein, Groestl, Blake and Lyra2) for enlargening the costs involved ter the construction of the dedicated hardware to attack the algorithm.
Ter layman’s terms, give a person several different tasks, for example te geometry, physics and chemistry, and ter the end, suggest him to play a spel of chess to get a prize.
The worth of VTC is not only that it cannot be mined with ASICs, but also that Vertcoin — ter the same way spil Litecoin — has Atomic Interchange and lightning network support — which will ter future enable traders and ordinary users to use VTC spil micropayments outside the blockchain.
Lightning Network, Atomic Interchange and Vertcoin, why is this significant?
Lightning Network eliminates the need for payment of commissions (they are only needed when opening and closing a channel) and ensures instant identification for receiving BTC, LTC, VTC.
At the UI (User Interface) level, this will be little different from what exists now. After all, the final point of payment will still be someone’s Vertcoin address. Now, when you want to send a payment to blockchain, you can choose the level of commission ter order to accelerate payment. But ter the future, you will be able to choose a channel (already open) through which to pay. Or you can pay directly through a blockchain with a larger commission.
There will be very likely a fresh tabulator for managing payment channels (choosing a hub, choosing the amount and time for which the channel opens). Hubs will announce their services (level of commissions, uptime, reputation). After the channel is open, you can pay everyone instantly — and with a low commission, ter addition to onmiddellijk blockchain payments.
That is, te the worst-case screenplay, if one of the participants “disappears”, what will toebijten is that the coins will string up until the channel expires. However, since there will be fierce competition inbetween providers of payment channels, nobody would want to associate with an unreliable participant ter the future. No third party is required here.
Atomic exchange is the exchange of one cryptocurrency to another cryptocurrency, without the need to trust a third-party. Presently, atomic interchange is supported te the code: Bitcoin, Litecoin, Vertcoin, Decred.
A total description of the process is available on github. Ter a nutshell, here’s how it works. Assume two traders have determined to exchange Vertcoin for Litecoin. Since the traders don’t trust each other, they can use exchange services or use the Atomic Exchange brainy contract. This clever contract permits you to use multisig with a timelock, so the traders send their coins to the contract for exchange. When both parties send the funding transaction, the initiator can voorkoop the coins, with which he exposes the secret the other person can use to withdraw his. If initiator doesn’t withdraw, the tegenstoot party can spend the coins after Two days (back to himself).
The decentralized exchange will permit you to disregard regulators. You can zekering worrying about your funds on the exchanger’s account and low fees. If you have Vertcoin, you can right away exchange VTC for any other cryptocurrency that has atomic exchange support without relying on centralized exchange. The technology is developing and is te the testing phase, but this is another step towards decentralization.
With successful implementation of atomic interchange and lightning network, cryptocurrency users will build up even greater independence.
Bitcoin and Ethereum blockchains suffer from spam attacks from time to time. Spil I don’t understand much about it, I’ll quote one (thanks to Gert-Jaap Glasbergen) of the Vertcoin developers. I asked what would toebijten if the Vertcoin blockchain suffers from the same spam attack:
“Since they were raking ter the TX fees themselves, they were able to do so without economic penalty, whereas without a large centralization ter mining, it’s unlikely for an attacker to do that without incurring a loterijlot of costs te TX fees.
So let’s say someone wants to do a similar spam to the Vertcoin network, they have to pay a serious sum te TX fees. That’s the economic incentive that is waterput te place (the TX toverfee) to prevent spam. And why there is a ondergrens TX toverfee and transactions cannot be made ‘free’.
But it wasgoed never anticipated that large groups of miners could collude and spam the network, while being the one that rakes te most of the fees, essentially spamming for free.
I think the network’s technical stability will never be te question ter case of a spam attack. Tho’ the throughput might become troublesome and the fees to get a quick transaction through will be higher. But the networks are designed (with the economic parameter of the transaction toverfee te place) to treat growing traffic.
It might help to explain that is presumably the miners themselves that do the spam attacks. That would explain why the attackers can rake te the transaction fees themselves.”
Main features of Vertcoin mining
Mining is a critically significant process for Vertcoin. It involves creating fresh blocks and pursues two goals at once. The very first is production of money supply. Every time a miner creates a fresh block, he is rewarded with N-th number of coins, which he then spends somewhere, thereby launching fresh funds into the network.