Coinstaker is very pleased to announce that this week, we’re covering the smelliest shitcoin of all. If Skycoin had an ugly paint job, and Tronix has a used-car vibe, this one’s the roaring dumpster fire of the cryptocurrency world: a toxic, fuming wreckage of bad code and worse management with no benefits other than to make the rest of us feel better about our tanking portfolios.
Unfortunately, due to complicated restrictions involving a Top Secret clearance and a pinky swear with my very real Canadian girlfriend, we can’t disclose this week’s stinker just yet. Before we reveal the Shitcoin of the week, we need to raise at least 3 million dollars in to make this project work.
Please donate to the address below so we can reveal this exciting crypto-turd.
Did you donate yet? We can’t reveal anything until we meet our fundraising goal.
Okay, good. Surprise! The shitcoin of the week is: Verge.
Verge(XVG) is the youngest sibling in the family of “privacy coins,” the projects designed to safeguard the secrecy and anonymity of their users. Whereas Bitcoin and Ethereum have public ledgers, allowing sufficiently-motivated busybodies to theoretically deduce who owns what, these coins help you hide your wealth from the IRS, the police, and your wife.
There are couple of different ways to do that. Monero, the preferred medium for darknet drug dealers, uses enhanced encryption to disguise addresses and transaction volumes. Dash PrivateSend allows coins from multiple transactions to be mixed for greater anonymity. Verge uses Tor, the IP masking system used by Dark Net Markets, Chinese activists and other cyber-miscreants.
As described in the XVG Black Paper(an admittedly clever bit of branding) Verge hides a users’ identity by island-hopping their transactions through a chain of nodes. There’s also the Wraith protocol, which gives users the choice of recording transactions on a public or private ledger.
Incidentally, Verge is also French for “penis,” a word we expect to appear on the XVG website in the coming weeks.
Brown Flag No. 1: The Dog Keeps Eating Their Code
Most of us learned about Verge after its first bull run last fall. To novice investors, XVG was crypto-catnip: it was cheap, had just mooned spectacularly, and had a heavy shilling from John McAfee, the L. Ron Hubbard of cryptocurrency. And it had just announced the Wraith Protocol, about which we knew nothing except that it had a really cool name.
I immediately decided to throw some money at it, but a gut feeling held me back. Maybe it was the cultish shilling and endless Lambo-talk, but for some reason I decided to wait and see what the Nazgul money had to offer.
Then the Wraith protocol took a sickday. Then it was delayed by bugs. By the time it finally did come out, Verge looked like the digital equivalent of a guy selling speakers from the back of a van.
Brown Flag No. 2: Don’t Give your Money to Someone Who Won’t Tell You their Real Name
Verge is brought to you by “Sunerok,” which sounds like the Bizarro-world equivalent of Justin Sun.Apparently it’s a pseudonym for Justin Vendetta–I say “apparently,” because Vendetta sounds as much like a real name as Sunerok.
“Sunerok’s” other colleagues include such distinguished crypto-luminaries as “SpookyKid” and “CryptoRekt,” as well as a team of identical grey silhouettes with names like “Yakuza112” and “XVGMonk.”
We’ve harped on this before, and not just because fake names make you look dumb. Having real names is an important sign of a projects’ security: it’s much harder to pull off a scam on people who know where you live.
Brown Flag No. 3: Don’t Trust a Locksmith Who Keeps His Key Under The Doormat
There are two things almost everyone should learn before they’re allowed near a computer. The first lesson, which I learned the hard way, is that you should always use Incognito Mode so that you don’t spend your teenage years with a therapist who specializes in cat porn.
Only slightly less important is to protect your passwords. That’s why you need twelve different alphabets just to get into your email. Usually when you hear about someone famous getting hacked, it’s because all of their passwords are “Guest.”
So it was a pretty bad sign when Verge—”The future of privacy”—got its Twitter account hijacked like a teenagers’ Instagram.
Sunerok would later shift the blame to Yahoo, saying the hackers exploited a leaked database. The fact that a leading cryptocurrency developer is using Yahoo in the first place should be a pretty big warning sign by itself.
At least he wasn’t the only idiot in the room.
Urgent: My account was hacked. Twitter has been notified. The coin of the day tweet was not me. As you all know… I am not doing a coin of the day anymore!!!!
— John McAfee (@officialmcafee) December 27, 2017
Brown Flag No. 3: Please Contribute To Our Moon Fund
Most of the cryptocurrency world was ready to give XVG the benefit of the doubt. Sure, they had some green programmers, but they’d put too much work into it to exit scam. And then:
….A global organization with a vast network of high traffic sites is looking to enter the cryptocurrency market and form a strategic business alliance with Verge as the preferred form of secure payment method, offering a quick and private means of transaction to hundreds of millions of potential consumers daily. This partnership represents an enormous potential market with a global reach that will compete with multiple fiat currencies. We are eager to see this partnership materialize and invite everyone in the Verge community to support this groundbreaking initiative. Help us accelerate this crowdfunding effort and reach our target by donating coins today.
That’s the future of money, rattling a tin cup and promising to make you rich. In other words, your Verge could be the new Bitcoin—but only if you give us more money.
This is textbook Nigerian prince-ing, almost as sketchy as the time Elon Musk promised to send me ten Ethereum. He still hasn’t paid me back, but hopefully the Binance guy will pull through.
“……..and the worst part is, I signed an NDA so I can’t tell anybody yet who we have this massive potential partnership yet with is….”
The secret “partnership” attracted wide speculation within the Verge community, and wider ridicule outside of it. Could it be Amazon? Microsoft? Or some fake shell corporation in the Bahamas? After much well-deserved roasting Bizarro-Justin produced the following, totally credible explanation, courtesy of his rectum:
We were talking about doing a crowdfund to get Verge supported on Ledger Nano, and uhhh, then I got an email from somebody at a big company, and uhh, they said, “hey, we’ve been checking out cryptocurrencies for the last few months and we really like Verge. Can you come talk to us?” And I said, sure. And I met up with them, everything kind of worked out, and they said, “alright, if you guys can raise the funds to cover the integration and some marketing and stuff, we can make this all happen.”….and the worst part is, we signed an NDA so I can’t tell anybody yet who we have this massive potential partnership yet with is.
” I think that this is the largest adoption of a non-top three coin to ever happen. It could be the largest adoption of a virtual cryptocurrency ever…..”
The secret to a good lie is making it believable, but Justin can’t even get that part right. Can anyone imagine a conversation like this happening in a real business run by grownups?
CEO: “We’ve decided to make our foray into cryptocurrency. As you know, this is a high-stakes business deal and we can only partner with the most sophisticated, professional development teams. We certainly can’t endanger our brand with a second rate partnership. How’s the research going?
Minion: “Well boss, there’s Bitcoin, but the fees are kind of high and its market dominance is slipping. Plus we have no idea if the Lightning Network’s going to work. We could try partnering with Ethereum, it’s not had quite as much time to prove itself but the market cap has grown by quite a lot. There’s one called Dash too..”
Boss: “Dash is out, they’re wasting their money on some sci fi show. Any other promising contenders in the top ten?”
Minion: “Well, there’s one called Bitcoin Cash, which forked from Bitcoin last year.
BOSS: “Bcash. LOL. What else? Anything in the top twenty?”
M:“No, but according to John McAfee there’s a one-year old privacy coin developed by volunteers. It’s unproven, doesn’t actually offer any real privacy, and keeps missing deadlines. It’s called Verge.
BOSS:“That’s just the kind of project we’re looking for! Let’s just hope they don’t get hacked in the next few days.”
Brown Clouds on the Horizon
Any doubts or reservations about XVG’s toilet quality should have been flushed away last week:
We had a small hash attack that lasted about 3 hours earlier this morning, it's been cleared up now. We will be implementing even more redundancy checks for things of this nature in the future! $XVG #vergefam
— vergecurrency (@vergecurrency) April 4, 2018
The “small” attack, which actually lasted for thirteen hours, exploited a loophole in Verge’s rules which allowed the hacker to successfully mine empty blocks in less than a second. Sunerok did not address the hack until it was discussed on Bitcointalk.
Instead of forking back to a pre-attack state, Sunerok panicked and pushed an update to the node software. The update caused an unexpected hard fork, which paralyzed the network, froze many users’ wallets and allowed the hackers to walk away with a million dollars in tokens.
Paradoxically, XVG tokens continued to soar on most exchanges, for the simple reason that the tokens were still impossible to move.
As usual, Verge downplayed the enormity of their fuckup while continuing to upsell their “groundbreaking” partnership. Meanwhile, somewhere in Silicon Valley, we can only guess what when down with Verge’s totally-real partnership when the protocol’s Swiss-cheese security was revealed.
Diagnosis: Get your Umbrella
Until recently, even the deepest skeptics didn’t really question the honesty of the Verge team. Although it had all the signs of a naive project by get-rich-quick amateurs, there was no reason to think it was an intentional scam.
That perception changed as the Verge team alternated between bungling their software and deceiving their investors. Their inability to demonstrate any technical skill–besides digging their hole deeper–make us wonder if they hired Firano the Bomber to help with the coding.
The mystery hack also set off alarm bells, and not just because of the shitty coding. The timing of the attack–and the strange decision to let the “hacker” walk with the coins–seem to echo the bad omens that foreshadowed the collapses of Mt Gox, BitGrail, BitConnect, Davorcoin and many bigger projects.
The only way to improve this project would be to exit scam, which at least would prove that Bizarro-Justin can get one thing right. On a scale of one to BitConnect, Verge gets a score of Nine Carlos.
Edit: This article was originally published on April 12th. In the following week, XVG’s secret partner was revealed to be Mindgeek‘s adult brands Pornhub, Brazzers and Nutaku. That doesn’t make it any less of a shitcoin, but it does say something about Mindgeek.
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