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Abstract
This paper discusses a derivation of a minimal space algorithm for solving the Towers of Hanoi problem by using a virtual disc which is smaller than the smallest real disc. The space complexity of this algorithm is ~ n bits, and is better than that of the improved recursive version, whose space complexity is ~2n storage locations. Moreover, its storage space required is minimal, and is better than other iterative versions which necessitate the recording of peg information in order to determine which peg a disc is resting on.