The team behind bitcoin-alternative cryptocurrency Vertcoin announced yesterday that it would transform its model into elastic distribution.
Vertcoin lead developer, Adam Rivera posted this to their blog:
We are most pleased to announce that Vertcoin will be moving to an elastic distribution model. This is absolutely revolutionary in the cryptocurrency world and will bring incredible stability to Vertcoin. This will undoubtedly bring the investors AND users of the coin that we so desperately need. So, what is elasticity? Cryptocurrencies traditionally operate on an inelastic distribution model whereby the supply of coins is fixed or runs on a schedule (halving). Many prominent economists have commented that the biggest thing holding Bitcoin back from ubiquity is their inelastic distribution model. The problem is one of market volatility – supply does not ever adjust to demand and thus you get massive swings in price (bubbles and crashes). With an elastic distribution model, the supply of spendable coins reacts to the market demand.
Normally an economy of elasticity requires a regulatory institution or central bank to adjust supply based on demand. The Vertcoin team claims to have a solution to keep the model decentralized but provides little detail.
Vertcoin was launched in early 2014 as an anti-ASIC currency or an evolution of Litecoin utilizing the “Adaptive N-Factor” that its developers say permits it to be ASIC resistant.
Vertcoin’s innovation is a response to the growth in Bitcoin computational power in large ASIC powered hardware data centers that some believe is transforming bitcoin from a distributed, decentralized currency, to one that is more centralized and vulnerable.
In its 11 months of development, Vertcoin has face hurdles including the complete modification of the currency’s algorithm. Now the team behind Vertcoin have announced a “revolutionary” shift to elasticity. The question is… how will it be realized?