It’s time to continue our interview series speaking to the creators of new coins! This time around, I spoke with bushido, the creator of Vertcoin. You may know him best as the user Vertcoin on BitcoinTalk.
Vertcoin is a different take on crypto currency than the other recent Litecoin clones. Instead of focusing on a brand, meme, or rewarding miners with 6 figures of coins a day, Vertcoin seems focused on remaining something that regular users (and CPU miners) have a chance to get, as it’s built to resist the eventual scrypt ASICs.
So what did bushido have to say about the new currency?
BRENDON LINDSEY: Thanks for taking the time to talk with us! Vertcoin popped up on our radar after it was launched, so we’re excited to get the chance to delve deeper into it.
First off, can you tell us a little bit about yourself? How did you get into cryptocurrencies? When did you come up with the idea for Vertcoin?
bushido: I am a masters student at Johns Hopkins, studying in information security. Previously, I worked for Microsoft as a software development engineer in test (SDET) and Accenture. I have heard about Bitcoin since I began my studies as an undergraduate, but I was never really interested in it. Like many, I got interested when the price started to climb in 2013, and a friend and me at Hopkins started talking about creating a Bitcoin pool.
At that time, I wanted to make a pool with my friend who wanted to mine, without knowing that there were ASICs in market already. Originally, we planned to mine with hardware we already had. Exams were coming up, so we decided to join a pool to mine before we made our own. We decided to join Slush pool, and got a whopping 0.000000x BTC since I only had my CPU to mine. I thought, there’s no way I’m going to get a BTC. I started researching the ways that people mine, and concluded that unless I wanted to get a new ASIC, there was no way.
At the same time, I started hearing about Litecoin. I found out that there weren’t ASIC chips for Litecoin, and people were still using consumer CPUs and GPUs to mine the coin. So I decided to jump into the Litecoin world.
Later on, I heard the news about ASICs for Litecoin from Alpha-T. They claimed that they are able to produce Scrypt ASIC chips which are able to mine Litecoin and other Scrypt clone coins. At that time, I figured I had two choices: keep up on them and buy an eventual ASIC, or create my own coin that can be ASIC proof.
And that’s how Vertcoin came to be created.
A lot of coins go with Scrypt in order to be “ASIC-proof” for miners. With Vertcoin, however, you’ve gone a step further in the usage of a feature you’re calling the “Adaptive N-Factor”. For those who aren’t technically savvy, can you explain how this adaptive n-factor will help ensure Vertcoin remains ASIC-proof?
The idea about “Adaptive N-Factor” is not a new idea. This idea was implemented in Yacoin. Let’s me explain what N-Factor is, and how it can prevent ASIC.
N is a number and must be a power of two greater than one. N in Litecoin is 1024 (2^10 = 1024)
N-Factor is log_2(N), N-Factor in Litecoin is = 10.
Scrypt will allocate memory approximately 128*r*N bytes. r in Litecoin = 1. Using that information, we can calculate how much memory Litecoin requires.
N is fixed number in Litecoin, so ASICs will be able to create a specific instruction to solve the problem.
Adaptive N-Factor is an N factor that is changing based on a time schedule. This algorithm will not fix N like Litecoin. As a result, it will be hard to implement ASICs to solve the problem, because ASICs need to have specific instructions, it’s what makes them effective.
Moreover, ASIC chips usually take time to create, and by the time the chip comes out, the N number is likely to increase ahead following the time schedule.
It’s still technically possible to eventually make an ASIC that can still mine based on that, but the cost to develop them won’t be worth the efforts since they’ll need to be completely remade within the year.
Unlike almost every other coin launch in recent months, Vertcoin was launched without a pre-mine. A lot of developers use a pre-mine to help cover promotional costs of the coin, as well as further development funding down the road. What was your reason for not doing a premine? And will this impact future development, as there’s no bank of coins saved to provide funding?
In my opinion, a pre-mine is not acceptable. I think we need to separate between funding costs and pre-mines. Some people who are creating a coin say they do pre-mines to cover funding. I believe you should get your funding from venture, or the coin community. Let me give an example.
When I launched this coin, I didn’t know how to do marketing. People in the coin community helped me to promote this coin. I am also not a good designer for logo and website, but people are willing to help me create a beautiful logo and website, because they believe in the coin, not because I need to promise them a reward to do so.
Moreover, if the coin’s creator wants to develop a new feature in the future, and cannot find funding from their coin’s community, he or she can seek funding from others willing to put their money into your project if it is a good enough coin or idea.
It didn’t take long for someone to make a modified CGMiner to mine Vertcoin. However, it roughly gets half the hash rate of GPUs that miners get when mining traditional coins. Is your goal going to be ensuring that GPU miners always aren’t as effective for Vertcoin as they are for other Scrypt coins? Or is this just a case of the miner technology not being advanced enough yet?
In theory, the hash rate should drop to half what you get from mining other Scrypt coin due to the N number, and will drop with this rate following the scheduled time. In the long run, CPU miners will gain an advantage from the memory requirement, but GPUs will still be able to mine at a dramatically decreased rate due to memory requirements, which GPUs have less than CPUs.
This situation will happen in the future. Only one case that GPUs will get higher hash rate than CPU in this future scenario is if AMD or Nvidia are able to create GPUs that have local memory per thread equal or more than the requirement in the schedule time.
Vertcoin seems like it’s built around the technical concept of the coin itself, rather than being built on the marketing/brand power behind it. The official site is very barebones, there’s no flashy giveaways, no official bounties listed in the announcement thread, etc. Do you think having a coin that is different from others on a code level will be enough for it to grow and remain successful? Or do you have plans in place to increase marketing presence down the road?
I don’t think technically it is a completely success formula yet, but it is a core that we should have first. Later when it’s more technically complete, we can create a marketing brand based around that.
Being truly ASIC resistant is a great benefit for a coin. However, to a lot of people there’s still the problem of multipools switching to a profitable coin and dumping it, causing fluctuations in the value. Is this also something you’re looking at ways to try to prevent? Or do you think that, at this time, there’s just not a way to stem the flow if a large multipool sets its eyes on your coin?
Due to the customized algorithm from other coins, the pool owners usually come to us and ask how to set the pool to support Vertcoin. As a result, I know who will create a Vertcoin pool. Moreover, we have a Vertcoin pool list in http://vertcoin.com. This list will rearrange order automatically. The largest pool will go down to the bottom and the smallest pool will become a top of list to prevent a miner jumping to the biggest pool. We also put the warning in the bottom to indicate that mining in the large pool will cause problem to Vertcoin.
Regarding to fluctuations in the value, I cannot prevent because the price come from buyers and sellers in the market. I only wish for the price will go up, so the coin will be widely accepted like Bitcoin and Litecoin. That’s my goal.
Vertcoin has been overlooked with a few other high profile coin launches recently. What do you want to say to miners to convince them to take a look at Vertcoin, and maybe put their rigs toward it?
Vertcoin is a good alternative coin for both GPU and CPU miners. If you are still mining Litecoin or other Scrypt clone coins, you may have heard about ASICs that will come out soon. When the ASIC chips come out, you will quickly find yourself losing a spot in the Litecoin and Scrypt clone coins market. On the other hand, you may be able to become a big player in Vertcoin!
Thanks again for answering our questions! Readers interested in learning more about Vertcoin — or downloading its custom mining software — can do so at the official Vertcoin site, or at the official announcement thread on Bitcointalk.
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