Is The Anonymity-Centric Cryptocurrency Verge (XVG) a good investment ?

you have been part of the bitcoin community for some time, you will be aware of the fact that bitcoin is not as anonymous as the mass media makes it out to be. Due to bitcoin’s pseudo-anonymity, several methods have been developed that are able to link bitcoin users to their wallet addresses. This has become a concern for many bitcoin users, who are becoming increasingly wary of regulators and governments tracking their transactions, which has caused many libertarian and privacy-focused bitcoin users to turn to anonymity-centric cryptocurrencies. These, in turn, have been experiencing strong user adoption and increases in value in the past six to twelve months. One of these anonymous coins is verge.

In this article, you will be introduced to the anonymity-centric digital currency verge, and we will discuss whether verge would make for a good investment in light of the increasing popularity of anonymous coins.

What is Verge?

The digital currency verge (XVG) started trading in October 2014 and is, therefore, one of the older anonymous coins in the market. However, when the cryptocurrency first launched, it was called DogeCoinDark. DogeCoinDark's developers’ goal was to make a fun anonymous Dogecoin-based digital currency with enhanced privacy features. In February 2016, the team behind DogeCoinDark decided to rebrand the coin and continue to work on improving the cryptocurrency under its new name “verge.”

Verge improves upon the bitcoin blockchain by adding privacy enhancing features such as the utilization of anonymity-centric networks Tor and i2P. It was created and its spearheaded by ‘Sunerok’ whose background is in network security and online privacy. Speaking in an interview with secwire.net, Sunerok explains the backstory to Verge:

"Verge started as a hobby back in 2013, under the name DogecoinDark. As I started producing a lot of resources for the blockchain, many community members suggested a rebranding, so the coin would be taken more seriously… Within a week or so, we had rebranded and our community started growing a lot faster. I try to seriously consider all input from the community, because without them, we're nothing."

“To protect users against traffic analysis, which is a form of network surveillance that threatens personal freedom, privacy, and confidential transactional activities, the user’s transactional traffic is routed through a number of global servers. Each of these servers removes the information of the previous server to the extent that the last exit node server ends up being unaware as to where the network originated from. As a result, Verge users can comfortably send and receive transactions of Verge over the internet with the assurance that the currency trail is virtually untraceable [...],” verge’s developers state on the use of Tor in their new black paper, which was released on June 4, 2017. Hence, through the use of Tor, verge users can transact anonymously and can benefit from faster confirmation times.

Aside from Tor, verge also makes use of i2P in all its clients. That means that all data sent on the verge blockchain is anonymized using the i2P tunneling service, which adds another layer of privacy through the use of “garlic encryption” onto verge.

Both Tor and i2P can be used when transacting using Verge’s Electrum clients, which means that “IP addressing information as well as transactional information won’t leak to the servers that the client is connecting too, “when transacting in verge using this desktop client. The Verge Electrum wallet has come with multi-signature support, which means transactions can require more than one key to be authorized. Standard transactions only require one signature, but for added security, users can choose to opt for multisig-based transactions.

Verge also uses multi-algorithm mining support. That means that individuals with different types of mining equipment are able to mine verge, which means more security through decentralization and a fairer distribution of coins among verge’s mining community. Verge is one of the few cryptocurrencies that support five different hashing algorithms. Namely, Scrypt, X17, Lyra2rev2, myr-groestl and blake2s. Verge uses a proof-of-work consensus mechanism, same as bitcoin, and has a block time of 30 seconds.

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Verge has a detailed roadmap, and the team will shortly announce exact dates for each stage. Some upcoming developments to anticipate are the i2P/TOR Android wallets, a unique aspect of the altcoin, as there is no clearnet capability for these wallets. July 2017 is also expected to see RSK integration, allowing for smart contracts, as well as an online merchandise store.

The digital currency can currently be traded on numerous exchanges including Bittrex, NovaExchange, and Cryptopia with Bittrex having by far the largest share of daily trading activity. Verge’s market capitalization stands at $45 million at the time of writing and its price is hovering at around $0.0035. The total supply of verge coins is capped at 16.5 billion, which is a positive for investors as demand can end up outstripping supply when the supply is limited to a finite amount.

Verge Price Development

The price of verge went sideways from the time it launched in October 2014 up until its rebranding in February 2016, ranging from $0.000005 to $0.00001. After its rebrand in early 2016, the price jumped in April 2016 to reach its all-time high of $0.000227 on April 7. However, the price dropped quite substantially after reaching its 2016 high and trended between $0.00005 and $0.00001 for another year.

In April, together with the rest of the cryptocurrency market, verge managed to rally once again. It wasn’t until June 2017, when the developers behind Verge published their black paper and made several positive development announcements that the cryptocurrency jumped significantly from $0.001 on June 1, to a new all-time high of $0.0063 on June 7.

Should You Invest in Verge?

The investment case for Verge is very straightforward. If you believe that cryptocurrency users will increasingly move towards anonymous coins to protect their payment privacy and you think that verge’s development team can deliver innovative improvements to their currency, then adding verge to your digital asset portfolio would be the right move.

If, however, you believe that digital currency users will not migrate towards anonymous coins or you believe that other anonymity-centric coins such as Monero, DASH, or PIVX will provide better anonymous transaction payment solutions, then there is no need for you to purchase any verge.

Nevertheless, adding Verge to your portfolio is recommended even if you already hold monero or other privacy coins, as Verge’s approach is slightly different and in the new and exciting space of crypto, it is hard to ascertain which technology will be best suited to concealing user’s identity. For instance, lead developer Sunerok stated in a recent interview:

“I’m a fan of XMR as they’ve definitely gone down their own path to fulfill their vision and I do hold quite a few in my portfolio. I have read recently that their obfuscation techniques are not yet perfected, but that's to be expected this early in crypto, as all of this is still new.”

From a technical analysis standpoint, is Verge expected to perform well? Looking at the weekly chart below of XVG-BTC will give us an idea of the price action that will be anticipated over the long run.

Verge displayed a bullish Ichimoku breakout in mid-May, giving an early signal that an uptrend would materialize. Since then, XVG-BTC has climbed from 0.00000048 to 0.00000170 at the time of writing. The market has displayed a strong upsurge, with a retracement looking complete, as the chart below also shows the Fibonacci retracement levels; XVG-BTC bounced up from the 38.2 retracement level at 0.000000096 for the week beginning June 26. Over the course of the next month or two, we are likely to see another upsurge to the Fibonacci extension level at 0.00000396.

The anonymous cryptocurrencies market segment is becoming increasingly competitive, with currencies such as Monero, DASH, ZCash, and PIVX, already having established themselves in the top 50 of cryptocurrencies. It will, therefore, most likely take more than a dedicated developer team for verge to compete with the cryptocurrencies mentioned above. Verge will also need to build a proactive community that is willing to promote the use of the currency and marketplaces that are willing to accept it as a spending currency for the coin to flourish.

However, the strong vision, privacy offering and developer activity, Verge will be a good coin to add to your portfolio to diversify in terms of cryptocurrencies that offer privacy. The only thing XVG needs to propel it even further is growth in the community backing it, where CoinGecko gives it a ranking of 39 percent for this aspect of the cryptocurrency, which could be achieved with its ambitious roadmap.