Understanding Bitcoin Gold And The Philosophy Behind It!
The second hard fork of the bitcoin history is here! And thus, we have a new cryptocurrency – Bitcoin Gold. But dark clouds of doubts and skepticism looms over the new cryptocurrency and its projected targets. Bitcoin traders, miners and developers across the globe are confused about the future of bitcoin gold. Here are the Things You Should Know About Bitcoin Gold Hard Fork Split! So, let’s take a step towards understanding bitcoin gold and the philosophy behind it.
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Understanding Bitcoin Gold And The Philosophy Behind It
What is bitcoin gold?
Bitcoin Gold, the brainchild of Hong Kong-based LightningAsic CEO Jack Liao, was developed as an experimental hard fork of bitcoin with a new proof-of-work algorithm. The main purpose behind this is to decentralize bitcoin mining again.
The change in proof-of-work generally needs a hard fork and that’s what BTG is doing. The technical team behind BTG has chosen Equihash, a memory-hard algorithm for its ASIC resistance (also used by ZCash). This gives mining back to the users who can use CPUs and GPUs to mine.
Although the mechanism of bitcoin gold is same as that of bitcoin cash, they differ in a number of ways. These differences are:
- The bitcoin gold cryptocurrency was created before the code would be open-sourced to the public.
- 1 percent of the total BTG cryptocurrency tokens mined before its blockchain goes public would be used to pay the bitcoin gold development team.
- As soon as the distribution takes place, the cryptocurrency would be launched for users to redeem.
Why take away the game from ASICs?
ASICs or Application Specific Integrated Circuits are different from genera, CPUs and GPUs as they are designed to do only one job with high efficiency.
And currently, bitcoin mining is dominated extensively by ASICs, majorly produced by Bitmain, Bitfury and Canaan. The reason behind this dominance is that the proof-of-work function (SHA256) is fairly simple requiring less RAM. Equihash, in comparison, is a complex hashing function requiring a huge amount of RAM. This makes producing ASICs for Equihash an expensive affair.
What does hard fork split means for us?
Anyone who owned bitcoins on the day of hard fork split (October 25) received the same amount of bitcoin gold as bitcoins they held.
The developing team put in a strong replay protection to safeguard against replay attacks. But, you need to download a wallet or construct transactions manually to move your bitcoin gold tokens.
The biggest concern that remains is the value of BTG – if it’s less than 0.0001 BTC, there is nothing much to do anything. And if its value is near 0.01 BTC or higher, wallet developers will come up with something so that you can access your BTG.
The funds will be easier to redeem if you do it from wallets or exchanges which recognize the new cryptocurrency. Then, move your bitcoins to a wallet or exchange that supports bitcoin gold. Or it is advisable to hold bitcoins in a wallet where you own your private keys instead of exchange holding them for you. Do you know What Are The Best Alternatives To Bitcoin And Its Derivatives?