Bitcoin exchange Bittrex and the world’s most popular bitcoin wallet Coinbase issued official statements about new Bitcoin hard fork named Bitcoin Gold.

Bitcoin Gold is a fork of the Bitcoin blockchain that will occur on October 25, 2017. At the predetermined block height, Bitcoin Gold miners will begin creating blocks with a new proof-of-work algorithm, and this will cause a bifurcation of the Bitcoin blockchain.

The original bitcoin-blocking system will continue unchanged, but a new branch of the blockchain will be separated from the original one. The new branch is a separate blockchain with the same transaction history as Bitcoin before the fork, but then deviates from it. As a result of this process, a new cryptocurrency will be created.

The purpose of Bitcoin Gold is to make Bitcoin mining again decentralized. Satoshi Nakamoto’s idealistic vision of “one vote for one processor” was replaced by reality, when a very small number of subjects predominate in the production and distribution of mining equipment, some of whom have engaged in offensive practices against individual miners and the Bitcoin network as a whole.

Bittrex exchange stated:

“If you have a Bitcoin (BTC) balance on Bittrex during the BTG snapshot block 491,407 occurring approximately on October 24, 3am PT (10am UTC), you will be additionally credited the equivalent amount of Bitcoin Gold (BTG) on a 1:1 basis. i.e. 1 BTC on Bittrex held during the on-exchange snapshot will get you 1 BTG.  BTC held on orders will also be credited.  Only the BTC held on your account is eligible for BTG.”

So, the Bitcoin Gold  ICO method is exactly the same as that used by Bitcoin Cash . All Bitcoin holders who possess BTC private keys on October 25 (block 491 407) will receive Bitcoin Gold on the rate of 1 BTC = 1 BTG.

The main disadvantages of the Bitcoin Gold are:

  • Absence of fully-formed consensus code
  • Absence of realized playback protection
  • Lack of adequate code for testing and auditing4
  • Lack of well-known code developers
  • Bitcoin Gold code base also contains a prerequisite of 8,000 units (100,000 BTG).
  • Please be aware that if a market does open there is a possibility of the developers selling their premined BTG on the open market.

However, this is not an actual fork in the traditional meaning. Instead, this is the date on which the Genesis block will be mined along with a small premine. According to the latest information, not every part  participate in the Bitcoin blockchain. Moreover, the source code of the project is still not publicly available. This makes it difficult to verify applications for the claims of potential replay protection.

The Exodus wallet, despite giving control over the private keys, will not support Bitcoin Gold for now:

“While we are aware of the fork for Bitcoin Gold on October 25th, we do not plan to support it like we did for Bitcoin Cash. The development team behind the fork has not provided enough instructions and we do not know what they are exactly trying to achieve with this fork”.

The Coinbases’ support portal claims the hard fork already happened. But right now, there is no evidence of this happening or not happening, for that matter. Since the BTG creation won’t occur on the Bitcoin chain itself, there is no “signal” for this fact either. A snapshot of account balances will be taken to allow users to claim their BTG tokens, though. No automatic crediting will occur as far as the official site mentions. At the same time, it is possible the Coinbase information is outdated.

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