What does Vertcoin mean for the future of cryptocurrency?
BY DAVID SEAMAN
The topic of alt coins is something that thoroughly annoys some hardcore Bitcoiners.
SEAMAN! We thought you were our guy. Now you’re covering alt coins, you snake! Lol.
I’m certainly not against Bitcoin (I own some, will respect it forever as the Prometheus who gave us cryptographic fire, and I genuinely want to see it skyrocket).
But alt coins are here, and at least one or two are here to stay, in my view. Even FOX Business Network is getting in on the action, with a feature story the other day, “Altcoins: Brave New World Beyond Bitcoin.”
What are these things, you ask.
Alt coins, simply put, are any cryptocurrency aside from Bitcoin itself.
Bitcoin was a technology developed in 2008, and since then there have been a number of attempts to refine the Bitcoin idea further, to try out new algorithms and concepts, and to just do a better job of being decentralized, electronic, instant, fair money.
Many of these attempts have failed. And many will fail.
The alt coin world is filled with coins I think will be dead in a few weeks, or a few months.
But I’ve done my research, and I think there’s a diamond in the rough. I did a fifteen minute video the other day sharing the results of my research.
I didn’t evaluate these alt coins as you would a tech stock or company—because digital currencies are not stocks with earnings and employees and product lines.
If the currency is technically superior and develops a truly decentralized network of miners, and if that currency shows an organic adoption rate in line with Bitcoin’s early days (or significantly better), it gets added to my short list.
From there, I do further research, dig even deeper.
I could be wrong, but Vertcoin seems to be the real deal. The core developer is a former developer for Microsoft and Accenture and is a masters student in information security at Johns Hopkins. The other developers are scattered around the globe and seem very, very clever and aggressive in their development timeline.
Vertcoin already has a great basic wallet client based on bitcoin-qt. Already has a zero-trust Web wallet, a significant technological achievement, and Android wallet app development has been fast tracked.
The coin has a 30 second commercial in the works and users self-fund a number of other ambitious outreach projects.
Adoption rates for Vertcoin are simply unheard of for a coin this new, aside from Dogecoin, which I wouldn’t consider an investment. You can already use it to buy small batch artisan roasted coffee from Black Market Beans. You can use it to buy Reddit Gold, or web hosting from CleverPuffin, or gift cards, sports cards, and even sex toys.
Their subreddit has 3,439 subscribers, impressive for a coin that just launched a couple months ago.
This coin, unlike many other alt coins, is NOT pre-mined. This means the developers did not award themselves a chunk of the coins. They are regular users, mining the coins and buying them at market rate and spending them, just like you and me.
I think this fairness is key to any coin’s growth.
No one wants an unfair coin that enriches its creators.
No one wants a coin backed primarily by a profit-focused company or powerful foundation. The company goes bankrupt, the coin becomes worthless. The foundation gets attacked, the coin loses credibility.
Vertcoin, like Bitcoin’s early days, is an electronic force of nature. Anyone can join the community, develop software around it, and have a voice in its future.
This is one of the fairest coins that has launched in 2014. (I’m excluding projects like Auroracoin from this assessment, as I think non-earned coin distributions are doomed to failure—a user should have to earn their coins, I believe that’s a major part of how a coin’s psychological value is derived over time).
And I think Vertcoin’s ASIC resistant, multipool resistant algorithm (you can read the technical details at vertcoin.org) is the secret sauce that will launch this coin into the stratosphere.
Bitcoin has largely become the domain of multi-million dollar mining companies who can order specially designed circuits (ASICs) that mine coins orders of magnitude faster than an individual miner can.
This isn’t in line with Bitcoin’s founding spirit (the white paper by Satoshi Nakamoto specifically suggests the coin’s network would consist of ordinary CPU miners).
Of course, reality is often different from expectation, and Bitcoin became something that GPU miners got into, before being pushed aside by powerful ASIC interests, many located in Asia.
This network profile is just too centralized for my tastes.
If Bitcoin becomes the exclusive domain of financial institutions and massive server farms at “secure sites”—well, that looks a lot like our existing, centralized financial system where a handful of banks control all the electrons moving around the world.
Vertcoin, due to its algorithm, is profitable for GPU miners but not so for ASIC farms.
The real world result of this is that anyone who goes to Best Buy and picks up a high-end graphics card can become a GPU miner, and make bank (at least for now—difficulty has been rising).
I’ll take the neckbeard indie miner any day of the week over the venture funded ASIC speculator in Asia.
Decentralized systems work best when they are, uh, decentralized.
Vertcoin takes off where Litecoin left things, and I see the fact that there are already Vertcoin clones as a sign that these ideas are valuable. But unlike the clones, Vertcoin already has a small and growing network of merchants and users who will gladly accept it.
I’m not saying you should invest in this coin, or trade any of your BTCs for it (although I did).
I’m not even saying cryptocurrency will take over the world (although I think it will, clearly).
I’m just asking you to remember I told you way back in March 2014 about Vertcoin. I want those cocktail party bragging rights in a few months’ time.
David Seaman is a journalist and host of the David Seaman Hour, available free on iTunes Podcasts and Stitcher. This article was originally featured on Medium and republished with permission. You can find the original here.