Vertcoin: About to Go Vertical?

I mentioned Vertcoin a few days back, but at the time I was busy and didn't really give the coin a real chance. I like that it uses the same basic payout structure as Litecoin (50 coin blocks, dropping approximately every four years, with a total of 84 million VTC eventually). I also like the idea of trying to be ASIC resistant. So what don't I like? Well, mostly I don't like having to play with conf files to get all of my rigs properly mining VTC, I don't like that my miners tend to get SICK GPUs more often, and I don't like that most of the VTC pools are somewhat unstable right now -- it's not uncommon for several of the mining pools to be slow/down at once!

If that's the bad, what's the good? For one, given the reward structure and the fact that there's no pre-mine, Vertcoin could end up looking a lot like Litecoin. Right now that means over $20 per VTC is a reasonable target, but it could take a while to get there. But make no mistake, Vertcoin is picking up steam! When I first discussed VTC just four days ago, the difficulty was at 2.097. Given that VTC is similar to LTC, you can divide your KHash rate by the difficulty to get a reasonable estimate of the number of VTC you can mine in a day, so with 1800KHash/sec you would have mined around 850 VTC in a single day. Well, a day later VTC hit the next 2016 block milestone and difficulty jumped to 5.652 -- and not surprisingly, the trading price of VTC had increased as well.

In the meantime, DOGE has been going crazy, so I even switched some miners from Hashco.ws and Middlecoin over to straight DOGE mining, and it's been doing pretty well -- and so have the multi-coin pools, really. But then yesterday, I looked at VTC again and did some quick math. Even at 40% of the hash rate of mining scrypt coins (the adaptive N-Factor algorithm used in VTC makes mining more difficult), at the current exchange rates mining VTC might actually be more profitable than mining DOGE or any of the other scrypt alt-coins. Here's the math:

DOGE @ 4500 KHash/sec and a difficulty (right now) of 1264.47 will generate around 36000 DOGE per day. (Note: DOGE block reward is set to halve in the next few weeks.) At the current exchange rate (which has jumped of late), that works out to 0.08 BTC per day after trading.

VTC @ 1800 KHash/sec (40% of the regular scrypt hashing rate due to higher N-Factor) and the current difficulty of 7.953 (yes, difficulty just jumped by over 50% yesterday) will generate around 225 VTC per day, and at the current exchange rate (which is a bit volatile) that works out to 0.115 BTC per day.

Wow. DOGE is flying high right now, no doubt, and profits on Middlecoin are up thanks to this fact. However, at present VTC is outperforming DOGE by over 40%. And what about Litecoin, which has had a recent drop in difficulty from nearly 4000 to 3130, with the next difficulty projection being under 2600? Mining LTC directly at present with 8000 KHash would net you 0.065 BTC per day after trading, so VTC is almost twice as profitable as LTC right now. That means if you were to go out and buy a system with three R9 280X GPUs for around $2000, you could recover your initial investment in under two months.

If that's not enough to get you thinking VTC is taking off, consider a few other tidbits. First, the exchange rates on VTC have bumped from 0.00016 BTC per VTC four days ago to 3-4 times that much (currently 0.00051), and I don't expect them to fall back any time soon. The people mining VTC right now tend to be seasoned veterans, as it takes more work to get up and running compared to all the scypt-based coins -- more on that in a moment -- so they're not inclined to sell. I know I'm not selling my VTC for example, because when the exchange rate has more than tripled in just four days you hold and wait for things to level off. Second point: there's no multi-coin pool mining of VTC right now, since it uses it's own customized Proof of Work algorithm, which means you don't see big dumps of coins throughout the day from Middlecoin, Hashco.ws, etc. And last but not least, I'm writing about Vertcoin and there are at least a few hundred people reading this, which means more people mining VTC and holding, which means I expect a small bump just because of this post.

There are other things I could probably get into as well, but suffice it to say that right now, I think Vertcoin is about to take off -- or rather, it's already taking off, and my one big regret today is that I didn't shift my four main mining rigs over to VTC four days ago! Had I done so, I would currently be sitting on something like 2200 VTC after four or so days of mining, which would currently be worth over 1 BTC. Instead, I stayed with Middlecoin during that time and made a reasonable 0.25 BTC (give or take).

So you've read all of this and now you're wondering: how do I get up and running on mining Vertcoin? It's pretty similar to other coins, and Vertcoin.com has most of the needed information, but there are a couple of items of note. First, you need to download the custom version of CGminer, which has been tweaked to work with the scrypt adaptive-N-Factor algorithm. Second, I can pretty much guarantee that if you run the VTC cgminer with your current scrypt settings, one of several things will happen: either it won't work at all, your system will crash (or at least be unstable), you'll get lots of hardware errors and no accepted shares, or you'll actually successfully mine VTC but not at anything near the expected rate. Here's my input on what to do to get things to work, based on my experience with mining on HD 7950 and HD 6970 cards.

First, you need to lower your thread concurrency. I haven't found an "ideal" setting yet, but I can tell you that on my 7950 cards I dropped from 21584 to 14712, and that seems to work "okay" -- I'm getting roughly 250KHash per 7950. On my 6970 cards, I likewise dropped from TC of 8000 to 6000, and they're also getting around 250KHash -- so yeah, my old Cayman GPUs are doing a good job of keeping up with Tahiti! Not bad for a $350 investment last month off of Craigslist! :-) The second thing you'll probably need to do is to adjust your GPU and RAM clocks down a notch. If you were able to run at 1025/1575 on a 7950 with scrypt, you may find that decent stability with VTC only comes at 975/1500.

And what about R9 290/R9 290X? Well, I'm still trying to get those working well. Some are reporting rates of around 400KHash with 290X and 350KHash with 290, but as usual every system is different. Also, the cgminer BSOD on exit glitch is back with the customized VTC-cgminer, so that makes things a bit of a pain in the butt. I've been able to get all of my 7950 GPUs and 6970 GPUs running VTC without too much difficulty, but R9 290X isn't going as well. Hopefully I can fix that today, and if so I'll post back.

Something else to mention is that setting up failover pools with cgminer is a really good idea, especially since the VTC pools seem to be less stable than many of the scrypt pools I've used. I created accounts at four of the pools, but one of the pools (Kilovolt) doesn't appear to be accepting additional users right now, since they have over 33% of the current VTC hashing power -- which is very responsible of them. That leaves the other big pools as vertcoin.org, bitcrush.info, and vertco.in, or you could spread things out to some of the smaller pools. I actually started on pool.pm, but have since pushed them down my list of pools as their pool was unstable and the hashing rate dropped quite a bit, resulting in fewer found blocks and somewhat poor results. Anyway, I suspect we'll see many more VTC pools start coming online in the coming months.

Last but not least, you can still use the custom version of cgminer with utilities like CGWatcher. I've found cgminer-vertcoin takes a bit longer to start mining sometimes, but otherwise it works about the same as before. I did configure CGWatcher to reboot my computer(s) if any of the GPUs gets "SICK", which has been happening far more often than when I was mining scrypt coins -- in fact, I was at the point where my GPUs almost never got SICK, but now some of my rigs seem to get sick and reboot every hour or two! But even with the rebooting taking the mining rig offline for a minute or two, VTC is still resulting in better ROI than Middlecoin, so I'm sticking with it.

As a final comment, based on some discussions on the VTC thread, there's a question of the length of time between difficulty adjustments. This has killed (at least temporarily) a few coins, RonPaulCoin being a prime example. One of the reason other alt-coins are having huge problems with hashrate spikes is because of the multi-coin pools (e.g. Hashco.ws, Middlecoin, etc.) They'll hop on a profitable alt-coin for 10, 15, 60, whatever minutes and then move away when the difficulty vs. price is no longer favorable. RPC has a current network hash rate of 228MHash, so when Hashco.ws jumps on with 1GHash, it's a huge problem. (RPC has introduced a fix that will occur in the next day or two where the time between difficulty adjustments will be much lower.) To a lesser degree, this can also happen with individual users jumping on a profitable coin en masse until difficulty adjustment makes it unprofitable, leaving the coin in the hands of the few stalwarts to plug through the slow blocks left behind.

Anyway, right now there's no potential for multi-coin pools to mine VTC because you need to run a custom version of cgminer that targets the different PoW algorithm. Of course, if a bunch of copycat coins start using the same PoW algo (Scrypt-Adaptive-N-Factor or whatever we're calling it) or the necessary support gets rolled into a single cgminer executable, then VTC may have problems. Anyway, I certainly don't mind the idea of shorter rounds and/or faster confirmations. 2016 blocks between adjustments was a figure chosen because two weeks sounded like a good idea back in 2008 or whatever. Now, I'd agree that block adjustment times have no need of being measured in days let alone weeks. With 2.5 minute average block times, I wouldn't be opposed to VTC being modified to adjust difficulty every 24 or 48 blocks (around one or two hours).

Update: The VTC devs are running a couple polls regarding the N-Factor adjustment schedule and their implementation of Kimoto's Gravity Well. If you have strong feelings on either one, go vote. My personal take: implement KGW as soon as possible and be done with it! For N-Factor, any of the options are fine.

If you find all of this information useful, I'm always happy to accept donations. (If you want to donate something else, send me a message and I can list other coin addresses as well!) Thanks!

BTC: 1GGJUb1gFpydygpeKzd6oFoShLRUSyThV7
LTC: LfCLyykrNFftzpdWejR73hf478ZtBzQ9jE
VTC: VaYNYUUi3amUTKQAQSs9EM4xJyNRyqnoUG