The bitcoin price fell below $5,700 earlier today, as traders are rebalancing their portfolios to meet larger positions in altcoins following the Bitcoin Gold hard fork. At the time of writing the most popular cryptocurrency’s trading at $5.725, according to CoinMarketCap’s Index. Ethereum, meanwhile, has gained 8%, Dash and NEO cryptocurrencies admitted double digit increase. Overall, the market added about $700 million on Tuesday, despite the bitcoin’s 3% drop.
As sources familiar with the matter claim, a Hong Kong developer plans to introduce an altcoin by creating a “snapshot” of the blockchain. The snapshot was taken on Tuesday morning and it’s supposed to be the starting point for Bitcoin Gold scheduled on August, 1. In the meantime, transactions will be based on the original Bitcoin blockchain.
At the time of the fork, Bitcoin balances’ owners will receive an equivalent amount of bitcoin gold . And though the new cryptocurrency is not expected to gain much amount, traders have already started accumulating bitcoins prior to the snapshot to maximize any potential profits they can extract from the fork. It resulted in the bitcoin price’s plunge as it dropped from $5,984 to $5,580.
“The Bitcoin Gold (BTG) initial coin distribution method is exactly the same as that used by Bitcoin Cash (BCH),” states the Bitcoin Gold official website. “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 (If you have 20 BTC you will receive 20 BTG). You need to control BTC private keys in order to make Bitcoin Gold transactions.”
According to the Bitcoin Gold official website, “the purpose of Bitcoin Gold is to make Bitcoin mining decentralized again. Satoshi Nakamoto’s idealistic vision of “one CPU one vote” has been superseded by a reality where the manufacture and distribution of mining equipment has become dominated by a very small number of entities, some of which have engaged in abusive practices against individual miners and the Bitcoin network as a whole.”
A specific group of Bitcoin miners has argued that with too many private players getting involved in the mining process, they seem to have likely taken control over the way the Bitcoin network should be operated. In order to subside their grip, the new algorithm for mining Bitcoin Gold will require cheaper graphics processing units (GPUs).
The bitcoin price’s decrease was not the only result of the fork, Bitcoin Gold website faced multiple DDoS attacks but managed to take them down. “Distributed Denial of Service (DDoS) attacks are fairly common against cryptocurrency projects, especially the controversial ones. Bitcoin Gold has been relatively controversial, as some pointed out that BTG uses a process that will privately create the cryptocurrency before its open-source and available to the public,” CryptocoinNews writes.
“On Github, it’s been pointed out that the developers allowed themselves a premining period with minimal difficulty, which led users to doubt the cryptocurrency’s development team. Moreover, Bitcoin Gold’s codebase is reportedly “not in a functional state” so much so that some exchanges, including Bittrex, refused to support the cryptocurrency and adding it to their platform.”