As earlier mentioned, Verge was introduced as a solution to Bitcoin’s lack of privacy.
So to better understand how Verge works, it is better to compare it to how Bitcoin works.
To send Bitcoin, you have to connect to the internet. Now, in the process of connecting to the internet, your internet service provider (ISP) contacts the Bitcoin blockchain, and in the process, it will reveal certain information about you — one of which is your location.
This information can be intercepted by anyone who knows how the internet works, and your privacy will be lost in the process.
However, the Verge blockchain uses 2 methods to ensure your IP address is untraceable when making use of its blockchain.
The first method is the TOR (The Onion Network).
TOR stands as a middleman between your ISP and the Verge blockchain.
It uses multiple servers to hide your location by changing the IP address your internet service provider sends to the Verge network.
This way your true location cannot be accessed.
The second method uses something called I2P( The Invisible Internet Project).
I2P is quite similar to TOR but more efficient because unlike TOR that uses a single path, I2P uses individual paths.
This is like sending an SMS to someone with different phone numbers, each phone number carrying a different part of the message.
Verge also released the Wraith Protocol in January 2018.
While Monero uses stealth addresses for all transactions, Verge users can choose to make transparent transactions on the public ledger or switch on the Wraith Protocol and transact in the private ledger.
For instance, when Mr. A sends funds to Mr. B on a public ledger, the transaction will be displayed as:
Mr. A’s address sent 1000 XVG to Mr. B’s address and everyone can view this transaction.
But this is what the transaction will look like when the Wraith Protocol is switched on:
xxxxx sent 1000 XVG to xxxxx and no one will know the addresses involved.
Below is a graphical explanation:
This how XVG’s technology works. I will be discussing how the Verge(XVG) is mined in the next section.