n this blog I’m going to have a look at the cryptocurrency Vertcoin. Normally an analysis of a financial asset is used to determine the value of the asset, but in this analysis I’m not going to give any price prediction at a given time. You can find many people, for instance, on Twitter who are predicting the prices for cryptocurrencies and usually these predictions are looking at increases of several hundred percent. I’m not going to do that, because from my point of view it is too much guesswork.
I’m going to look at Vertcoin’s relative value compared to Bitcoin and Litecoin, as Vertcoin basically is a fork of Litecoin, just like Litecoin is a fork of Bitcoin.
So why do I want to make an analysis of Vertcoin. After all, there are far more than 1000 coins now to look at.
The reason is that Vertcoin is a very undervalued and overlooked coin, which is a stronger coin than both Bitcoin and Litecoin seen from a handful of perspectives.
First of all, if you believe that Bitcoin has a future, then Vertcoin will certainly also play an important role in the future. Of course, it is all about utility. What can the coin be used for which is creating value? Bitcoin is the front runner of cryptocurrencies at the moment. Exactly how Bitcoin will be utilized in the future, other than what we have already seen, it still to be seen and in that context this blog is only looking at the fact that Bitcoin is the most valuable cryptocurrency which has a very close tie to Vertcoin. In the same way, I’m also taking Litecoin into consideration.
Right now the price for Vertcoin is around 8 USD, which compared to Litecoin ( around 300 USD ) and Bitcoin ( around 15.500 USD ) is a very cheap coin. Can it really be that Bitcoin and Litecoin are so much better that the price of those two coins are 40 and 2000 times higher than Vertcoin. Bitcoin has reached an incredible value just because it is the front runner of cryptocurrencies and because of the branding value of the name Bitcoin, but Vertcoin should at least be as valuable as Litecoin.
Why should Vertcoin, at least, have the same value as Litecoin?1
Lightning network. Vertcoin can make atomic swap with Bitcoin and Litecoin. Segwit is implemented in Bitcoin, Litecoin and Vertcoin and the Lightning network is a layer built on top. This is an integration between the coins which means that in the near future, users will be able to swap between Bitcoin, Litecoin and Vertcoin superfast with next to zero transaction cost. The implication of this feature means that the coins are kind of merging, with each coin still standing out with their own characteristics.
If you want to know more about atomic swap and lightning network, you can get more information here: Atomic swap and LN network2
The main difference between Vertcoin and the other coins is that it is heavily focused towards being resistant to ASICs. Today Bitcoin, Litecoin and many other coins are mined by powerful computers that can mine cryptocurrency rapidly. This is usually done by big mining pools which are using special and expensive ASIC graphics cards. Therefore, mining is not really possible for the ordinary person with his/hers PC. As a result of this, these coins which are using ASIC equipment for mining are becoming more centralized and vulnerable from centralized control and attacks.
Vertcoin is the people's coin because it is designed and intended to be mined by individuals using their own PC. This decentralization of the mining makes Vertcoin a more secure coin. The fact that huge mining pools are not controlling the game for Vertcoin, makes all the difference. If you want to make changes to Vertcoin it can only happen with strong community consensus.3
Vertcoin has no leader, just like Bitcoin has no leader. Satoshi Nakamoto went under cover. Strong leaders can have a tremendous influence on a coin’s development, branding and utility and therefore be part of the reason, why the coin has reached a certain market capitalization. But strong leaders can easily be a disadvantage for a coin, because they become single point of failures. If the leader suddenly leaves the scene, for instance with early retirement, then the coin can potentially collapse. Many coins in the crypto space have leaders, like Bitcoin cash, Litecoin, Zcash, just to mention a few. Vertcoin doesn’t have a leader as such, but Vertcoin has a very strong community behind it. This makes Vertcoin comparatively much less vulnerable.4
Vertcoin is a fork of Litecoin, so many features are the same. Yet Vertcoin also has stealth addresses, which Litecoin and Bitcoin don’t have. A traditional bank account is based on a private ledger in which the transaction history is only known to the account holder and the bank. In such a system the account holder can widely distribute his/her account number and receive any number of payments without exposing the account history to the payers or casual observers. This is essentially what is accomplished with stealth addresses, without sacrificing the decentralization of the currency.5
Low fees and fast transactions. Both Litecoin and Vertcoin will only ever have a maximum of 84 million coins and blocks arise every 2.5 minutes. VTC’s difficulty, adjusts with every block rather than every 2016 blocks as Litecoin and Bitcoin, so congestion is not created in the network and high fees are not needed in order for transactions to be confirmed. In fact, the average transaction fee is less than half a cent which is very low compared to Bitcoin’s transaction fee which raised above $11 during a time where it was more profitable to mine Bitcoin Cash.
Based on these arguments, I’m very confident that Vertcoin will eventually gain a value which is similar to Litecoin, if not higher. Vertcoin does not have the same exposure to the public and fiat money like Litecoin and Bitcoin, and before that changes I believe Vertcoin will stay a bit in the shadow of these coins. But this can quickly change when Vertcoin becomes available on more high profile Exhanges and the atomic swap functionality is fully available on decentralized Exchanges. This will come in 2018.