Tuesday, February 4, 2014

Vertcoin: Potentially More Valuable than BTC or LTC?

It seems every new cryptocurrency that someone creates these days ends up with people taking sides. It's either a "scam coin / pump and dump" or it's the greatest thing since sliced bread. Now, there are a few ways to make a coin very undesirable -- premining a large chunk of coins before releasing a cryptocurrency to the mining community would be one, and I'd also steer clear (long-term at least) of any coin that distributes a large percentage of the total coins in a short amount of time. Looking at Vertcoin, this is what makes it worth potentially more than even Litecoin -- and long-term it could even surpass Bitcoin (assuming it remains ASIC-proof).

1) It's more resistant to ASICs
2) It has KGW so it's resistant to pools and/or large fluctuations in the number of miners
3) There was no premine or other silliness on the launch
4) It pays out slow and steady over a very long period of time.

Why shouldn't Vertcoin succeed where so many others have failed (other than the name and logo)? At present we are not even at block 30K, which means there are fewer than 1,500,000 VTC in existence. Sure, the first week or two things went a bit too fast, but now we've leveled off and for the foreseeable future we'll generate blocks every 2.5 minutes. We are 810,000 blocks away from the reward halving, and KGW means we really won't hit the halving much earlier than expected. That means 33,750 hours -- or 1406.25 days, or 3.85 years -- from now, we will have mined half of all VTC. By mining slow and steady (as opposed to, say, DOGE, which will be mined out in about 525 days since launch), we avoid the potential for a massive pump and dump.

As to the lack of a premine, even BTC had one -- Satoshi mined it with a small group of friends for about a year before it really hit the public. Wouldn't it have been nice to be one of select few (some say around 20) people mining BTC that first year? 2.6 million BTC went out to a choice few; so much for the "currency of the people" -- and no significant giveaways ever happened, at least not to a point where anywhere near 2 million BTC was distributed among the masses. BTC was also a proof of concept, and the long difficulty adjustment times were at least in part a way for early miners to get even more coins... but probably two weeks just sounded "reasonable" at the time. We now know better. The new standard is KGW, and any new coin that doesn't implement KGW (or have some other way of dealing with potential coin hopping) isn't going to last.

Getting back to Vertcoin, the current network hash rate is around 2.7 GHash/sec, but since VTC is roughly twice as hard to mine (on a GPU) as normal scrypt, that's like a 5.4 GHash/sec coin. Compared to other coins, LTC is at around 100 GHash/sec and DOGE is at 78.5 GHash/sec; most other scrypt coins are in single digit GHash at best, which means VTC has already passed many of them. And that's hardly a surprise, as we've gone vertical in the last day.

We're now seeing VTC trade at 0.008 BTC, or already about one third the price of LTC. Some will call this a bubble, and perhaps it is, but I like to think this is VTC assuming it's rightful place as the number three cryptocurrency in the very near future. When the scrypt ASICs begin to arrive en masse, we'll see even more people start to look at VTC -- as well as any other non-scrypt coins. I'm sure we'll see VTC clones as well, but I'm not sure what they can offer that will be "better" than VTC. Faster transaction times? Maybe. More coins in less time? See points #3 and #4 above. They'll be a flash in the pan at best, but VTC is here to stay.

VTC:  VaNuRCj73JVAwR1YMnt8CXaqoiPgykiMTk
BTC:  153qS9Ze32hnV3fwirZLWNka4wBAowc21E
LTC:  LfCLyykrNFftzpdWejR73hf478ZtBzQ9jE
DOGE: DD9iTWf8diPkvKdB8roPJepTyp6BGVQtct

9 comments:

  1. You are a Prophet of Profit, Jared. How many VTC you got before this pump? You're a millionaire already I think.
    I started mining VTC only after your post about Leasing :( Thank you for your work.
    Sent you some tips :)

    ReplyDelete
  2. I'm just curious what you are going to do with your massive profits now :) I made a post 2 weeks ago about not know which one might explode, I guess you win. If I would have started mining back then, I'd have 20K worth right now. Sad panda.

    ReplyDelete
    Replies
    1. Right now? I'm sitting on my VTC and seeing how far it will go. I'm thinking we might see parity with LTC within a couple months, possibly even surpassing LTC pricing. That means my target is 0.025 BTC per VTC, or over 4x what people are currently paying. If things work out right, I might have a few thousand VTC by that time. Yummy!

      Delete
  3. Hi Jarrad, what do you see the diff of VTC since it's halved compare to LTC and it's increasing pretty fast these days(2 days from 50 to 150). Do you think it will stay at a diff where everyone can get reasonable shares( at current diff my 6.6M rig can get 2 LTC/day, if VTC diff goes up to 1000 by end of Feb then I can only yeild 2VTC and it will drop in the following month ending with 0.01 VTC/day, then no one will mine this coin)

    ReplyDelete
    Replies
    1. Well, this is the blessing and the curse of Kimoto's Gravity Well -- difficulty adjusts rapidly to the hash rate. Long-term, I suspect the profitability of VTC will more or less equal all of the other popular/stable scrypt coins -- as long as it's more profitable to mine VTC than others, people will continue moving to the currency for mining, and when more scrypt ASICs start arriving then we'll probably really see a lot of interest in VTC.

      This is why I suggest people mine as much VTC as possible now and hold as long as they're able. Right now, 1MHash on VTC (which is equal to 2MHash scrypt) will net you around 6.6 VTC per day. At the current exchange rate that's worth 0.0482 BTC, so that's the equivalent of 0.024 BTC per MHash on scrypt, or about 50% more profitable as something like mining DOGE where you would make about 0.0163 BTC per MHash.

      Here's the thing: when I first wrote about VTC, difficulty level was 6.4. At that difficulty, you could have mined 150 VTC per day with three R9 280X GPUs. If you had held onto those coins today, instead of being worth 0.025 BTC per day they are worth over 1 BTC -- a 40x increase.

      This isn't the first time we've seen this either. In April 2013 when I first started mining LTC, it was worth around $3-$4 and the difficulty was around 100. So 1 MHash would have been worth 10 LTC per day, which would have been $30-$40. I cashed out on plenty of LTC at such prices, but if I had help onto the 2000 or so LTC I mined between April and December they would have been worth $40,000 instead of the $8000 or so I traded them for. Will VTC repeat that performance? No one can say for certain, but I'd say there's a better chance for VTC to do it than any other current cryptocurrency.

      Delete
    2. Yeah I agree as the KGW changes the diff pretty quick so the the latter miners will find it is not profitable or the ROI is extreme unpredictable unless the value flies like BTC. Lucky I got my 8x290 rig working back a week ago when diff was under 10 and was mining at nearly 400/day and I am holding them all. Right now it gives me only 40 a day which is x10 times lesser -_-.

      But for the long term I can see VTC will do well but as I am concerned the diff is an potential issue. Maybe there is another way to just control the increase of diff? Such as through some sort of means to restrict the rapid increase and put it in a steady way? I think this would be fair for everyone as the initial for mining is to get as many people involved as it can but everyone will have a pretty reasonable share. Right now as the diff flies only those super rigs hashing 20M+ can play this game but still they can play for long as more super rigs come however a 20M VTC rig will cost around 27,000$ AUD ( such a big amount!).

      I guess when the diff reaches to a certain degree where all small miners are eliminated it will drop back again then the game starts again? Hehe anyway I am so regretful for not buy 200,000 VTC back in 3 weeks ago with only 0.5 BTC.

      Delete
  4. Hi Jarred,
    We have opened a new VTC pool in Europe.
    Prop payout , ddos protected and 0% fee during beta test.
    We trust in VTC and we offer 0% fee forever to the first 20 active miners.
    http://vtc.letsmine.it

    ReplyDelete
  5. Price of VTC is falling, will it ever go up to at least .01 BTC?

    ReplyDelete
    Replies
    1. Well, prices shot up awfully fast so they had to come back down, but we're now more or less stabilized and starting to rise again. I don't know that it will go much below 0.002 and it's periodically trying to go up. Long-term 0.01 isnt' too far out of reach, but it might take a year or more to hit that...or we could hit it next week. I think VTC has more potential at this stage than LTC -- witness the highly volatile difficulty and hashing speed of the LTC network as miners jump on/off depending on profitability. We'll see if others agree over the next year.

      As an interesting anecdote, I got into LTC just around the time it hit $5, and at that time I could mine about 25-30 LTC per day. Difficulty caught up quickly, and prices dropped just as quickly, and it stabilized around $3 for around six months. I traded most of my LTC for USD in order to pay bills, and because I just wasn't sure at the time where LTC was going. Then in November it shot up -- albeit briefly -- to nearly $50. Had I held the ~2000 LTC I had mined, that would have been worth $100K, compared to the $10K or so I had traded it for during the previous six months. My bet is VTC does the same thing at some point, so I'm waiting for that to happen.

      Delete