verge blog - A History of Verge – Understanding the Verge Price Spikes

A History of Verge – Understanding the Verge Price Spikes

Verge’s Background

Verge is a privacy-focused cryptocurrency that was originally launched under the name of DogeCoinDark in October 2014. The project was created to keep transactions anonymous and untraceable.

Unlike most of its peers, Verge doesn’t use cryptography so much. Instead, it offers its anonymity by leveraging Tor – which hides your IP address by encrypting your traffic and sending it through a chain of computers around the world – and L2P, which offers peer-to-peer routing. By using their Wraith Protocol, Verge users can make either public or private blockchain transactions.

Even though its initial name might have you believe that Verge is a fork of Dogecoin, it is actually an entirely different blockchain that uses a mix between a proof-of-stake and a proof-of-work protocol.

It stirred a lot of controversies when it announced the following thread title:

“[ANN][DOGED] DogeCoinDark [POD] — Scrypt — Global Darknet is LIVE! UNTRACEABLE!”

While privacy is a great feature, this type of advertisement referring to illegal market payments was rather unappropriated.

The first 450 blocks were mined quickly, and then DogeCoinDark was then checked out by a then-popular service called Proof of Developer, discovering that the founder was the only person behind the project.

verge 1024x203 - A History of Verge – Understanding the Verge Price Spikes

Rebranding

In February 2016, wanting to separate itself from the associations to the Doge brand and the “dark” reference, DogeCoinDark was renamed Verge. Since then, the project has been dedicated to legitimacy and adoption by the general public. After the February 2016 rebrand, the project has grown to a $1.5-billion-dollar currency.

The Team

Verge’s main developer is Justin Erik Valo aka Justin Vendetta or Sunerok.

verge team 1024x525 - A History of Verge – Understanding the Verge Price Spikes

Like a majority of the crypto market, Verge is an open source project, which means that there is no company behind Verge. The coin is supported by the community, meaning there is no stable, full-time team and no physical headquarters from which the projects runs its operations.

The advantage here is that anyone can propose changes or improvements to the blockchain, and, if the suggestion is voted by a majority of people, the changes are then implemented.

The downside to this arrangement would be that the team’s members can’t remain fully anonymous forever, which leads to a nondescript team page that constantly changes.

Wraith protocol

What is the wraith protocol?

Wraith Protocol is a technology that was designed to enable the user to easily switch between public and private ledgers on the Verge Blockchain.

The Wraith protocol was announced early in September 2017, and the launch was scheduled to occur in the following month.  As Verge was always intended to function as a private currency, the protocol was created to add additional features which the users could activate whenever they wanted to.

The launch of the protocol missed its initial deadline and was delayed another three times, even the final deadline, December 31st, 2017 being missed.  This lead many traders from the Verge community to panic sell their holdings which in turn caused a major price dip, from $0.129 to $0.096.

The feature was officially in January, but quickly criticized for its many delays, and “lack of originality and usefulness”.  The release generated a massive price action, the value always sitting around the $0.11 mark.

The McAfee Incident

On December 13th, McAfee seemed to be a very vocal supporter of Verge and other fellow established privacy coins Monero and ZCash in a series of tweets made from his Twitter account. He reiterated his preference for the coin and even shared a 150,000% increase target in a DM with a follower. By talking about its potential, McAfee’s influence helped the price of XVG increase.

While the price did experience a growth from than $0.01 to $0.15 in just a few days, McAfee then made a 180 turn and denied his $15 prediction, claiming that his Twitter account was hacked.

Some find it hard to believe a cybersecurity veteran as himself would be the victim of a hack. Members of the community claim that he has also supported Verge on other social accounts, adding further confusion to the matter. What’s more, he began to actively discredit the currency and mock Wraith protocol at the beginning of 2018.

Another Verge influencer, XVGWhale, shared a series of messages between himself and McAfee on his phone, in which the latter claims he single-handedly increased the market cap of Verge and asked for over $1 million as compensation for his contribution. Two days later, XVGWhale claimed that his Twitter account was also hacked.

The Hack

On the November 2017 incident, CoinPouch, a wallet endorsed by the Verge team, lost around 125 million XVG in a hack. Nobody really knows what happened, as neither party wants to assume responsibility, and the account where the coins were transferred to suggests that the hackers might have sold them through an exchange.

The address still remains one of the top 100 richest Verge wallets, who together own 96% of the total supply, most of them being already mined. Only 6,000,000 XVG have been transferred from the wallet since the incident.

The Hard Fork

On April 4th, 2018, Verge announced that it experienced a minor hash attack but that the issues had been solved. However, it appeared that the problem was neither solved nor minor.

An XVG miner revealed that the coins could be minted whenever you wanted by using spoofing timestamps on new blocks. And someone had already been doing that every second for approximately 13 hours. To solve this problem, Valo implemented a new code, which changed clock drift to stop the spoofing.

But while that did fix the problem, it also caused the chain to hard fork, rendering all updated wallets and clients unusable.

Things have since been fixed, yet the event generated a negative wave in the community, criticizing the team’s technical expertize and their method of handling such situations.

It is important to mention that Justin knew about the inevitability of a hard fork, which is a logical thing when a change in the drift in the codebase is performed.

The Crowdfund Issue

In early October 2017, Verge initiated a crowdfund with a target of 1,000,000 XVG, around $6,600 at the time. The target was achieved within a week, with over 1.8 million XVG being donated.

But Verge’s last crowdfunding in March did not go so smoothly. The target set was 75,000,000 XVG or ~ $3,000,000. Valo also promised to announce an important partnership, but this announcement was delayed repeatedly.

In the last day before the proposed deadline, one of Verge’s existing partners, Tokenpay, donated 66.5 million XVG, or almost 90% of the goal.

On April 17, Valo revealed that he could not access his funds on Coinbase. $1.5 million vanished from the funds’ wallet and were transferred to wallets held by the Binance exchange.

In spite of all this, the price of Verge spiked from $0.04 to $0.10 in the days prior to the announcement. When the partnership was finally announced, the coin’s price skyrocketed.

The Pornhub Partnership

On April 17th, Verge announced that it was partnering up with adult entertainment company MindGeek, allowing its cryptocurrency to be used as a payment option on Pornhub for its adult content.

“Cryptocurrency Verge has signed a partnership with adult entertainment site Pornhub. Customers will be able to pay for all Pornhub on-demand purchases via the new method — something fans of the site have been wanting for a while. Pornhub said a crypto payment method topped a list of suggestions on the site’s feedback forum.”

This partnership is considered one of the biggest cases of cryptocurrency adoptions by totally different industry so far.

MindGeek’s other platform, Brazzers, also started accepting XVG for payments.

For all the criticism Verge deserves, this use case is both big and legitimate, which will likely have a big halo effect for the crypto community at large.

verge partners 1024x279 - A History of Verge – Understanding the Verge Price Spikes

German Bank Partnership

Through its partnership with the payment platform TokenPay, Verge has closed a deal on the 27th of April with the German bank WEG Bank AG. This partnership led to a huge demand and consequently led to a surge in XVG’s value by 22%. The partnership will release a highly anticipated debit card which will allow XVG owners to use them like regular bank-issued cards.

Bitfinex listing

On may the 1st, popular cryptocurrency exchange Bitfinex listed the Verge coin on its platform, allowing traders to exchange it with BTC, ETH, USD, EUR, GBP, and JPY. Again, this gave the coin a major boost in value, up to 20%, while most of the cryptocurrency market went through a dip.

CoinPayments

On May 2, CoinPayments, a gateway for payments with cryptocurrencies for most e-commerce platforms, announced that it will support Verge.

Considering its issues from the past, and how it still managed to hold on when the market crashes happened, we can definitely say that Verge is a very resilient coin. This cryptocurrency will likely experience more growth in the future thanks to its many developments and partnerships.