Verge Cryptocurrency Review

By Michael EatonOn 11 Apr, 2018

Thanks for checking out our Verge Cryptocurrency Review. Verge has been one of the top performing cryptocurrencies over the last year.

New to this space and interested in investing in cryptocurrency? Access our other cryptocurrency related material before you dive in!

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Verge Cryptocurrency and Blockchain Use Case

Verge focuses on privacy first and foremost. What makes Verge cryptocurrency unique is that it utilizes technologies other than blockchain network technology to help keep users anonymous. IP Addresses are obfuscated using The Onion Router (Tor) and Invisible Internet Project (I2P). Combined with Verge’s Wraith Protocol users can rest easy knowing they can transact in an anonymous way.

The Onion Router was first developed in 2002 by the U.S. Navy to protect government communications. The goal of Tor is to conceal the identities of users and keep their online activity free from surveillance. It does this by separating identification and routing information. Data is encrypted and is then randomly bounced through a network of relays run by volunteers around the globe. To learn more about Tor click here.

The Invisible Internet Project is a network layer that allows peer to peer communication (aka data transfer) to remain free of censorship. This can be achieved by encrypting user traffic. Once the data is encrypted it is distributed to over 55,000 computers that are located in all parts of the world. This makes analyzing the data very difficult. To learn more about I2P click here.

The Wraith Protocol is unique to the Verge platform. It aids in keeping transaction data anonymous while giving users flexibility. The black paper has this to say about the Wraith Protocol:

“Wraith Protocol makes it possible to choose between a public or private ledger. Through this new system, users who value transparency and accountability, e.g. merchants, have the option to have transactions viewable on the blockchain. On the other hand, it also provides an option to those who prefer transactions to vanish entirely.”

This is significant. Verge cryptocurrency caters to the needs of a variety of users. Verge can be used by businesses within industries that are heavily regulated because users can choose to engage in transactions that are transparent. At the same time individuals and organizations can choose to turn on the Wraith Protocol and transact in a private way.

Development and Management

The Verge cryptocurrency project is open sourced which means that anyone is able to aid in its development as long as they can prove they are qualified. Participation is merit based. But there are certain developers that are more involved than others.

The Verge website lists the twenty most active members of the development team. All of the members of the team have decided to keep their identities secret. Doing this is consistent with the spirit of the project but it makes it difficult to understand their experience. We can only judge their programming and software development abilities by how they’ve handled the situations they have encountered.

The founder and the lead developer goes by the pseudonym “Sunerok”. Again not much can be gathered concerning his previous experience with blockchain development and programming in general. But unlike his fellow team members he’s been willing to reveal his physical appearance. There are a variety of videos on the internet in which he discusses his ideas. This video right here is a good example.

The Verge network was compromised last week and this was a good test of the team’s capabilities. You can read the details of the hack in our Crypto Weekly Update posted on Monday. This is a concern because a well developed blockchain network should be incredibly difficult to compromise. But what’s more concerning is that it took the development team two tries to fix the problem. This reflects poorly on the capabilities of the team.

Update – the Verge project was compromised again on May 22nd.

Partnerships and Other Influences

Privacy focused cryptocurrencies have found it difficult signing up big name partners and Verge is no exception to this. However, Verge has announced that they have formed a very significant partnership. The largest in the cryptocurrency industry in fact. The website states:

“A global organization with a vast network of high traffic sites is looking to enter the cryptocurrency market and form a strategic business alliance with Verge as the preferred form of secure payment method, offering a quick and private means of transaction to hundreds of millions of potential consumers daily. This partnership represents an enormous potential market with a global reach that will compete with multiple fiat currencies. We are eager to see this partnership materialize and invite everyone in the Verge community to support this groundbreaking initiative. Help us accelerate this crowdfunding effort and reach our target by donating coins today.”

That’s right. Investors in the project must donate their coins back to the Verge team or else the partnership might fall through. This is highly unusual and we will be keeping tabs on how this develops. The partnership is supposed to be announced on April 17th.

If the partnership does materialize and is significant we will edit this post to reflect and updated score for this section.

Update – the partnership did materialize and it turns out that XVG will be partnering with MindGeek which is one of the bigger transaction processors on the internet and owner of Pornhub (sorry no link provided!). Users of Pornhub can now use XVG to pay for membership accounts on the site. This is a big deal on it’s face but diving deeper we can see that this should not make large difference in the short term.

Users of the site have two choices. They can either sign up with a credit card or the can use Verge. For those that are crypto savvy this might not be too big of an issue but most users will not have experience using cryptocurrencies. This means that they will have to learn about using cryptocurrencies like XVG before being able to sign up using the coin. This is unrealistic and we expect most users to continue to using credit and debit cards to pay membership fees.

This really comes down to a ease of use problem that is facing all cryptocurrencies at the moment. Until crypto is just as easy to use as a credit card people who do not use crypto on a regular basis will not view coins like Verge as a legitmate payment option.

Competitive Advantages and Risks

Competitors

The following are XVG’s main competitors:

1. Monero
2. Zcash
3. Bytecoin
4. Cloakcoin

Competitive Advantages

These should be considered when determining the project’s strengths:

1. XVG is the only cryptocurrency that utilizes I2P at the moment which results in obfuscation of user’s IP Address. This makes it the most effective cryptocurrency and keeping user IP addresses anonymous.
2. Faster transaction times than it’s bigger competitors (Monero and ZCash).
3. A large and very active community. Verge is well known because the community supporting it is extremely active.

Risks

Risk can hint at a project’s chances of ending in failure:

1. XVG’s differentiating features are pre-existing technologies that have nothing to do with blockchain. Competitors can implement Tor and I2P.
2. Untimely and unclear communication from development team. This past incident concerning the hack drives this home further.
3. Regulatory authorities could potentially crack down on anonymity focused cryptocurrency making large scale adoption difficult.

Network and User Trends

Information concerning average daily transaction growth and the amount of active users on the network could not be acquired. We will edit this article if this information is made available.

Network hashrate and difficulty is a key indicator of the security of a blockchain network. Hashrate and difficulty are correlated. As network hashrate increases so does algorithmic difficulty.

The difficulty of the network currently stands as approximately 261K and has increased by about 54% over the last 3 months. This is a good sign. It means miners are choosing to mine Verge cryptocurrency over other options. They believe in XVG and the Verge platform. You can check up on the network difficulty by clicking here.

Transaction fees are also important to look at. High or increasing transaction fees might turn users off and will make real world adoption an uphill battle. Verge has a flat fee of .1 XVG so the transaction fee will increase or decrease based on the price movement of the coin. But XVG is not an expensive coin (because of a large circulating supply) so fees should remain low. For example, even at all time high prices the transaction fee on the Verge network was only about 2 cents.

As touched on the in the Competitive Advantages section the Verge community is extremely active and large. It goes without saying that Verge and XVG are very polarizing and either you love the project or you think it is scam. Those that love it make it known and do what they can to spread the word. This is important because a strong and active community makes it more likely that the cryptocurrency will be adopted by more users in the future.

Should You Buy Verge Cryptocurrency?

Verge is a tough project to score because our XVG review research produced a mixed bag of results. There’s no denying that anonymity focused coins are exciting investment options and XVG is one of the best cryptos right now at keeping user information private.

But Verge might not be able to claim that for much longer. Other projects like Monero will implement I2P into their platform. Competitors do a better job of using on-chain solutions to ensure users remain anonymous.

We definitely feel more comfortable when we can verify the experience of the developers working on the project. We understand why the developers of the project want to remain anonymous. But at the end of the day the developers are the people creating the product you are investing in. We feel more comfortable investing in a project that is transparent as it concerns their dev team. The events that have transpired in the past few weeks increases our feeling of uneasiness as it relates to the team makeup.

The future concerning the Verge cryptocurrency project is very unclear. A lot of investors have been chasing gains recently but we believe purchasing XVG at this point in time exposes individuals to unnecessary risk. We think it might be a smart idea to wait until the partnership is announced on April 17th before investing.