Vertcoin is based on the view that mining with commodity hardware is the best way to ensure a decentralized network. This in turn creates a network where both consensus and economic incentives are taking place at the level of the user. The ASICs that were created for the Vertcoins algorithm threatened this vision.
As 2018 came to an end, ASICs were introduced on the Vertcoin network. This did not only make it less profitable to participate in consensus with commodity hardware, but also lowered the threshold for attack on the network. This resulted in several attacks on the Vertcoin blockchain. The attack in question was the infamous 51% attack.
A 51% attack on the blockchain is an attack that can be organized by group of miners or even an individual on a dominant pool. A pool can attempt to control more that 50% of the network’s hashrate, which gives them the possibility of preventing new transactions from gaining confirmations, allowing them to halt payments between exchanges and users and they could potentially be able to reverse transactions. It’s also important to note that a 51% attack cannot remove you from ownership of a coin.
Just before the ASICs become active on the network, Vertcoin developers were making a lot of progress working algorithm called Verthash. Before Verthash could be completed however, ASICs arrived and flooded hashrate renting markets with hashrate. This threatened the network integrity and in response, developers decided that it would be useful to tweak the existing algorithm to provide a short-term solution.
Vertcoin uses a hashing algorithm known as Lyra2REv2 which was developed by Vertcoin developers in 2015 with the idea that certain parameters could be changed to render existing ASICs useless. This algorithm was also used by several cryptocurrencies (Mona, Verge) due to its GPU friendly/ASIC resistant properties.
However, with the new ASICs Lyra2REv2 has effectively been taken over and Vertcoin’s fight against ASICs continues with Lyra2REv3.
Lyra2REv3 is a modification to the Lyra2REv2 algorithm. It differs from v2 mainly in the methodology for random row selection and the algorithms and order of the algorithms it is made up of.
The hard fork is planned to take place at block 1080000. With the Vertcoin block time being 2.5 minutes, that places the fork date somewhere around the second of February (02–02–2019). A friendly community member has created a countdown the fork: https://wenvtcfork.xyz/.
All users of the Vertcoin network need to update their wallets to the latest release which can be found here: (Vertcoin Core V0.14.0)
Vertcoin is still working on a new algorithm that is able to withstand hashrate outsouring more efficiently. After the immediate ASIC threat has been alleviated, the developers can then resume their focus on building Verthash, an algorithm that’s both resistant to ASICs and hashrate outsourcing.