Verge (XVG) vs PIRATE (ARRR)

A technical comparison between the popular privacy centered cryptocurrency Verge and the strongly upcoming private cryptocurrency PIRATE.

Flexatron

Published in

Pirate Chain

6 min readNov 2, 2018

It’s time for our first comparison:

We pirates aim to stay as objective as possible and every source used is referenced. Let me know if anything’s off in the comments. Let’s get it on!

XVG

Verge currency according to their own website:

Verge Currency is fast, flexible, entirely private and totally anonymous, but most importantly it’s a currency built with the idea of supporting widespread mass adoption as it scales out across the globe.

So what makes Verge, well, Verge?

Let’s have a look at the key technical characteristics of the coin.
The blackpaper of Verge states Verge is the most privacy focused cryptocurrency.

So let’s focus on that aspect of Verge first.

Verge has integrated Tor, I2P tunneling (with Android support) and Simple Payment Verification (SPV), to be able to easily send payments across the Tor network. Operating on the Tor network with I2P tunneling, makes sure your IP address is obfuscated and therefore the path that the transaction takes is masked. Furthermore, the Verge wallet includes SSL encryption which makes sure that data sent from wallet to wallet is not interceptable [1].
However, the addresses that are used to transact with are not masked. In that sense the privacy aspect works similar to Bitcoin with optional Tor+I2P tunneling turned on which is supported in certain wallets. Take a look at the block explorer to see for yourself.

The Wraith protocol, Verge biggest installment, allows users to choose between using a public or private ledger while staying anonymous on the Tor network (geographically).
When choosing the public ledger, it means the Wraith protocol is turned off and everything is viewable during a transaction such as public key, balance and transaction amount details. Only the location (IP) of the sender and receiver is confuscated.
Turning Wraith protocol on activates usage of the private ledger which consists of stealth addresses: one-time destination addresses on behalf of the recipient, made without any interaction between the sender and receiver [2].
Stealth adresses work through Elliptic Curves Diffie-Hellman (ECDH) which allows two public keys (a sender and receiver) to calculate a shared secret that nobody else can either duplicate or link to the sender or receiver [3].
These addresses cannot be publicly linked to either the sender or receiver addresses from which they were derived, making them effectively exist outside the public ledger.

When a user chooses the private ledger, the transaction details still include the amount of coins sent, but the sender and receiver’s public keys and location (IP) are masked during the transaction.
The balance on the public ledger will “magically” receive coins from somewhere.

Other non-privacy related features of Verge [4]:

The implementation of BIP65 makes it possible to exchange Verge via atomic swaps.
2-way encrypted p2p chat functionality which protects the end user against methods of surveillance such as stylometry.
It uses 5 alternating algorithms for consensus, namely x17, Scrypt, Groestl, Lyra2re and blake.
Block time: 5–10 seconds
Transaction fee: 0.1 XVG
Max supply: 16.5 billion XVG
Transactions per second: up to 100 TPS (potentially up to 2000 with RSK implementation)

Security

In April 2018, a bug in the retargeting of the algorithms got exploited using a 51% attack. Using spoofed timestamps, the need for a different algorithms each block was circumsized and the hackers were able to submit blocks to the chain at a high speed, mining 1 block per second (!) effectively ruling out 99% of the legit pools, which were losing money [5].

In May 2018 the same thing happened but with a different approach: hackers sent one block with Scrypt algorithm containing a spoofed timestamp followed by a block with Lyra2re algorithm containing a spoofed timestamp and by repeating that process and thus lowering the difficulty, the hackers were able to mine several blocks per minute [6].

XVG appears to be a cryptocurrency with questionable privacy and security aspects: balances can always be tracked on the public ledger, so differences in balances can easily be tracked and conclusions can be made.
People in XVG are only forced to use TOR and I2P and are free to use the private ledger or not. Even so, using the private ledger only temporarily shields the public keys during a transaction.
Furthermore, XVG has been proven to be vulnerable to 51% attacks on several occasions.

ARRR

PIRATE (ARRR) is an assetchain (independent blockchain) out of the Komodo ecosystem which makes it based on the Zcash tech, but with different features, determined by the parameters set in the Komodo assetchain.

Zcash technological background

Zcash uses specific zero-knowledge proofs called zk-SNARKs (zero-knowledge succinct non-interactive arguments of knowledge) which allow transaction data to be validated without revealing information about the amount and the parties involved [7]. Zcash allows users to send from either transparent addresses (t-addresses) or shielded addresses (z-addresses). Privacy of Zcash’s shielded transactions is achieved through hashing of the commitments (UTXO) and nullifiers (spent outputs). For each new note created by a shielded payment, a commitment is published which consists of a hash of:
the address to which the note was sent, the amount being sent, a unique number “rho” later used to derive the nullifier and a random nonce [8].

What is even better than choosing between public or private ledgers, is the ability of Zcash to “unlock” shielded transactions details using viewing keys for incoming and outgoing transactions including their memofield after making a private transaction!

Basically, nothing is traceable amongst the shielded pool of funds, Zcash privacy is real cutting-edge technology.

Shielding addresses used to require a significant amount of computational power, which in turn might explain the relative low % of shielded funds in Zcash. With Sapling active, this is currently changing: payments involving Sapling z-addresses can be constructed in as little as a few seconds and with only 40 megabytes of memory, this should in theory encourage the usage of shielded funds.

But…

What if we would have a coin with a complete pool of shielded funds?
That would make Zcash perfect..

Privacy in PIRATE..

What makes PIRATE unique, is that it’s a forced shielded-transactions only blockchain (z-transactions). PIRATE is mined into a transparent address, but can only go into a shielded address from there [9]. The result of this feature is that atleast 99.9% of ARRR is shielded, dramatically increasing the privacy of the usage of the blockchain for sending funds. Furthermore, PIRATE supports TOR to obfuscate location (IP) just like Verge (XVG)[10].

Security

Whereas XVG is vulnerable to 51% attacks, PIRATE is protected against majority hash attacks, thus reorganizations, through delayed proof of work (dPoW). Bitcoin network hashrate is insanely high and will not be surpassed at any point in the foreseeable future. Delayed proof-of-work utilizes this enormous power of the bitcoin network to protect its blockchain to 51% attacks. This is achieved by storing backups of the KMD blockchain onto the Bitcoin blockchain. dPoW has been successfully implemented in Komodo, Game Credits, HUSH and PIRATE.

Other non-privacy related features of PIRATE:

dPoW implementation
Blocktime: 60 seconds
Mining algorithm: Equihash PoW
Transaction fee: 0.0001 ARRR
Max. supply of 200 million ARRR
Transactions per second: 6–26 TPS (Potentially much higher with Sapling)
Sapling support in development

Conclusion

XVG appears to be a cryptocurrency with questionable privacy and security aspects: balances can always be tracked on the public ledger, conclusions can be made from differences in balances because of the existence of a public and private ledger simultaneously.
Furthermore, unfortunately XVG has been proven to be vulnerable to 51% attacks on several occasions.
Right now Sapling is not implemented in PIRATE yet, this is only a matter of time. When it is, PIRATE offers the untraceability of Verge, the privacy tech of Zcash with the privacy usage percentage of Monero and the security of Bitcoin.

We are hereby ending the article with a summary of the main points: