VeriCoin – The First Binary Cryptocurrency

VeriCoin Platform & Its PoST Algorithm 

VeriCoin (VRC), developed by Douglas Pike and Patrick Nosker, was released in May 2014. Originally, the crypto-platform used the Proof-of-Work (PoW) algorithm, where miners maintained and secured the network by generating cryptographic hashes. In return, they were rewarded newly minted VRC whenever they mined a block.

PoW is energy intensive, so the developers switched VeriCoin to the Proof-of- Stake Time (PoST) algorithm, which is similar to Proof-of-Stake (PoS) in that it rewards users for holding VeriCoin in their wallet. The network is run and secured by every computer that has a VRC wallet and is connected to the internet.

The difference between PoST and PoS is that PoST gives higher rewards to users who stake coins consistently. This incentivizes users to keep their wallets running and staking, which boosts their reputation and they receive a higher stake as time goes on. The end result of PoST is a stable, consistent, and secure network that rapidly processes VRC transactions. VeriCoin’s block confirmation time is 1 minute, which is 10 times faster than Bitcoin (BTC). This makes VeriCoin attractive to cryptocurrency traders, since they can move money a lot faster, compared to BTC between exchanges. Faster transactions give traders increased capability to profit from arbitrage and market changes.

Speculative & Volatile Markets

When VeriCoin was initially released, its price was less than 1/10 of a cent. However, it rapidly rose to a peak of 34 cents per coin in July 2014, making it one of the most valuable cryptocurrencies at the time. The VeriCoin market crashed after this, almost as fast as it had risen, and each coin was worth less than 1 cent by January 2015. This is indicative of a speculative bubble, aka pump and dump, which is a very common phenomena in the cryptocurrency world.

Speculators buy a large amount of coin when the price is low, generating excitement in the cryptocurrency community and attracting more people to buy. When the market is rising rapidly, the original speculators dump their coins and suck all the money out of the market, causing a panic and rapid sell off. Just about every cryptocurrency has gone through a pump and dump due to the ‘Wild West’ nature of the markets. Moreover, there are no proper regulations yet or controls to prevent manipulation and massive price swings.

VeriCoin’s (VRC) Price Reaches Record-Level Highs

The price of VeriCoin was steady from 1-5 cents for a couple years after the pump and dump, but began to rapidly rise in 2017 and hit an all time high of $2.76 in January 2018. This occurred at the same time that the rest of the cryptocurrency market was in a frenzy; Bitcoin hit a record of nearly $20,000. The entire cryptosphere was in a bubble, but the bubble popped, and the price of all cryptocurrencies, including VeriCoin, rapidly dropped.

As of this writing, VeriCoin is worth 42 cents, and with a circulating supply of 30.9 million coins this yields a market cap of $12.8 million. This gives VRC the 351st highest market cap, which is decent considering there are thousands of different cryptocurrencies. Notably, 600,000 new coins are generated per year via staking, and this amount is fixed. So, over time, the amount of newly minted coins from staking becomes a smaller proportion of the overall coin supply. This reduces inflation from staking as time goes on.

Combining PoST & PoWT For Maximum Efficiency

In 2018, VeriCoin was paired with Verium, creating the first binary cryptocurrency. Verium uses the Proof-of-Work Time (PoWT) algorithm where miners maintain and secure the blockchain in order to receive rewards. Verium miners directly participate in the VeriCoin blockchain, providing a turbo boost which accelerates the VeriCoin transaction time to well under a minute.

The combination of PoST and PoWT makes the blockchain more efficient and secure, and appears to solve the scalability issue. That’s because transactions are processed faster and cheaper, regardless of how much the network grows. Verium was only released and integrated into the VeriCoin blockchain a month ago.

Considering the unique benefits of a binary blockchain, it’s possible that the value of VeriCoin and Verium could rise in the long term. However, there is obviously no guarantee of this happening, so please do not take this as investment advice. It is always best to consult an investment professional before making any investment-related decisions.