Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
When a group of Bitcoin users and companies split the world’s most popular cryptocurrency into two different versions on August 1st, 2017, it was an unprecedented event in the Bitcoin’s 9-year old history. Now just 84 days after that “hard fork,” yet another version of Bitcoin has been created named ‘Bitcoin Gold’.
The moment is finally here for which the entire Bitcoin community is waiting for. The second hard fork in the Bitcoin (BTC) has been initiated this very year thereby creating a new cryptocurrency – Bitcoin Gold (BTG).
The process for this hard fork started early July this year and the technical team behind the Bitcoin Gold has recently released a “snapshot” of the Bitcoin blockchain giving a birth to a new cryptocurrency at block 491,407 on the original blockchain. This means that Bitcoin blockchain can now be tweaked, reconfigured and recreated with new set of rules.
The process is currently underway and just similar to the Bitcoin Cash (BCH), which came into existence after the first hard fork, the Bitcoin Gold will also be released to the existing Bitcoin users once the process gets completed.
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 Satoshi Nakamoto’s idealistic vision of “one CPU one vote” has been superseded by a reality where the manufacture and distribution of mining equipment has become dominated by a very small number of entities, some of which have engaged in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).
With many private players getting involved in the Bitcoin mining process, it has now become highly dependent on the application-specific integrated circuits (ASICs) which is very expensive and require huge investment in the first place making it completely out of the reach of common miners. It is being argued by the supporters of Bitcoin Gold that with large companies using their financial muscle, the mining process has become more of centralised which violates Bitcoin’s key value proposition of having a decentralised nature of working.
By changing Bitcoin’s proof-of-work algorithm from SHA256 to Equihash, all of the specialized SHA256 mining equipment will be obsolete for mining the Bitcoin Gold blockchain. Thus, Bitcoin Gold will provide an opportunity for countless new people around the world to participate in the mining process with widely-available consumer hardware that is manufactured and distributed by reputable mainstream corporations. A more decentralized, democratic mining infrastructure is more resilient and more in line with Satoshi’s original vision.
Bitcoin Gold miners can now begin creating blocks with a new proof-of-work algorithm, and this will cause a bifurcation of the Bitcoin blockchain. The original Bitcoin blockchain will continue on unaltered, but a new branch of the blockchain will split off from the original chain. The new branch is a distinct blockchain with the same transaction history as Bitcoin up until the fork, but then diverges from it.
“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 Bitcoin Gold developers, the new cryptocurrency network is aiming to be open to the public by November 1st, 2017.
Bittrex, the world’s third largest cryptocurrency exchange by trading volume, officially announced that it will not list Bitcoin Gold (BCG) trading upon its hard fork in November. 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.”
bitFlyer, Japan’s largest bitcoin exchange, has announced that it will support the Bitcoin Gold (BTG). Issuing a statement past weekend it said:
“We will credit you with an amount of BTG corresponding to the amount of Bitcoin (BTC) in your bitFlyer account prior to the split. If the BTG split is deemed by bitFlyer to be permanent and secure in regards to customer assets, you will be able to own both BTC and BTG in your bitFlyer account.”
U.S.-based bitcoin wallet provide Coinbase said for the time being it won’t be supporting the new BTG protocol until the code is not made publicly available and sees it currently as a major security risk.
The momentum on the recent surge in Bitcoin prices seemed to have cool over the weekend in the wait of this hard fork as the prices remained below $6000. Bitcoin (BTC) is currently trading at $5765.84, according to the CoinMarketCap’s Bitcoin Price Index.
Now, with a such a fast turn of events and the bitcoin network undergoing through two hard-forks in just a matter of few months, everyone is now have their attention of the much debated hard fork – SegWit2x – which is suspected to occur next month.