An Introduction To Bitcoin Gold
Isn’t Bitcoin Gold just another name for Bitcoin? This is what some cryptocurrency enthusiasts tend to assume. Bitcoin Gold or BTG (trading name) is a fork of Bitcoin (uses similar codebase) - and no it has nothing to do with actual gold. The main difference between these two digital currencies is the mining algorithm used to verify transactions.
When Bitcoin first hit the market, anyone could easily participate in the mining effort and earn bitcoins. All you needed was a regular PC or laptop. However, as the value of this currency went up, and competition increased, one had to use specialised hardware for the job - first GPUs and then dedicated bitcoin hardware - Application Specific Integrated Circuits (ASICs). Nowadays mining is mostly all done on ASICs, which are expensive to buy and run (electricity costs) and then you have to pay to be in a mining pool which shares the mining bounty.
All this means that control of the mining process and the bounties has fallen into the hands of the few who often exert undue influence over the currency for personal gain. Jihan Wu is one of the named. To counter their influence in this young industry, a small group came up with Bitcoin Gold, which uses a different mining algorithm designed to bring mining back to your PC. Instead of the Bitcoin HashCash algorithm which uses SHA-256 hashes, the new currency uses the Equihash algorithm. This means that the ASICs which were used for the original currency can’t work with this one.
Where will your Bitcoin go?
If you still have your original Bitcoin, you should not be alarmed by the latest developments that have taken place in the industry. During the launch of Bitcoin Gold, it was revealed that Bitcoin owners would be given an equal amount of Bitcoin Gold. To get Bitcoin Gold, you will need to transfer your Bitcoin to an exchange or a wallet that supports BTG. Alternatively, you can get the new currency by moving the BTC to a wallet whose private keys are under your ownership. The good news is that most digital wallets support the exchange.
How Bitcoin Gold achieves decentralization
With the SHA-256 algorithm used by the Bitcoin protocol, your performance in mining solely depends on the computing power of your hardware. The more the power, the higher the chances of mining more Bitcoins. This means that companies with powerful hardware devices attract many miners. Bitcoin developers feared that these companies could take advantage of their superiority to sabotage the industry.
Equihash, the algorithm used to mine Bitcoin Gold (and also ZCash) comes with a different approach. It relies on the memory of the hardware rather than the power. Proponents of Bitcoin hope that the new algorithm will make it possible for ordinary folk to mine this cryptocurrency using their standard PCs. After all, this is all that democracy and decentralization means.
Bitcoin faced some resistance, especially in the way that its developers handled the mining process. Bitcoin Gold could spell doom to developers who had heavily invested on original miners. However, the Bitcoin Gold team predicts a brighter future for this currency.
Would you recommend Bitcoin Gold to your Grandma? Comment below?
CaliCrypto last edited by
I would not recommend Bitcoin Gold as buy. I think what happens is when people hear the word Bitcoin in anything they get excited even though there may be no actual meaningful relationship to the real Bitcoin. I think there are better cryptos to invest in and would skip over Bitcoin Gold at the moment.
I think there are better cryptos to invest in and would skip over Bitcoin Gold at the moment.
I would have to agree here. Although the name has a nice ring to it, there doesn't seem to be too much substance behind this project for my liking.