Bitcoin Gold is finally set to go live this Sunday on November 12. Will Bitcoin Gold really manage to decentralize mining or is it just another Bitcoin’s version? Let’s try to figure out.
Lately cryptocurrency world has been shocked several times by some news, which, among other things, were related to Bitcoin Gold (BTG), new digital cash that was to be launched some time ago, but the release of which was postponed several times. According to the developers, the main Bitcoin Gold network is to be launched this Sunday, November 12, 2017. That’s why, it’s high time for us to pay more attention to this fork in order to better understand its advantages and hidden dangers.
Bitcoin Gold (BTG) is a new cryptocurrency meant to become even more attractive for investors than Bitcoin. Indeed, this is quite a challenging goal, as well as all other goals in the crypto world, though. Bitcoin Gold (BTG) will be based on Bitcoin blockchain with divided Bitcoin protocol, and slightly changed PoW (Proof-of-Work) algorithm.
It should be noted that there were (quite successful) cases when Bitcoin algorithms underwent changes – this is actually how Bitcoin Cash was created. So basically, Bitcoin Gold is another hard fork*, just like Bitcoin Cash (BCH).
*According to the Investopedia, hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa), and as such requires all nodes or users to upgrade to the latest version of the protocol software.
Bitcoin Gold hard fork is a permanent divergence from the previous version of the Bitcoin blockchain, consequently, nodes running previous versions will no longer be accepted by the newest version. Particularly this creates a fork in the Bitcoin blockchain with one part following the new, upgraded Bitcoin blockchain, and the other one – not.
Bitcoin Gold is believed to bring something new to the cryptocurrency markets. For instance, miners will have an opportunity to use GPUs instead of ASICs. PoW algorithmm also changed – Bitcoin Gold uses Equihash while BTC, BCH, and the proposed B2X all use SHA256.
Logical enough that analysts compare Bitcoin Gold (BTG) to Bitcoin Cash (BCH), the price of which is hitting nearly record high today (above $800 at the press time) but still hardly makes 15% of Bitcoin price. At the press time, Bitcoin Gold (BTG) futures are trading at $184, according to the CoinMarketCap.
Why Bitcoin Gold Is Better Than Bitcoin Cash
Bitcoin Gold utilizes GPU mining machines, which changes the way mining works by making ASICs, the most powerful mining machines used by BTC and BCH, useless. In fact that means that more people will have access to cryptocurrency mining, and this, in its turn, could lead to the true Bitcoin mining decentralization.
This is incredibly important especially today, when miners no longer have more or less equal opportunities, and one of the biggest criticisms of bitcoin is its centralized mining pool, leaded by the so-called Bitcoin ‘farms’, which threatens to ruin the original democratic foundation of the currency.
In given circumstances it may happen that while investors are watching Bitcoin Cash, people may be getting interested in other digital coins. At the same time it may also turn out to be an ocean in a tea cup, i.e. a local move that won’t cause major changes in the cryptocurrency market.
In other words, what the new network really holds in store for us remains to be seen.
Dmitriy Gurkovskiy is a senior analyst at RoboForex, an award-winning European online foreign exchange forex broker.