Bitcoin Gold is an alternate fork of the Bitcoin blockchain that implements changes to make mining more equitable. The goal for Bitcoin Gold is to create a network where anyone can become a miner with only basic hardware.
Bitcoin Gold hopes to change the paradigm around mining on the Bitcoin blockchain. According to the founders, the Bitcoin blockchain has become too centralized. Large companies with huge banks of mining computers now mine the vast majority of Bitcoin. For the founders of Bitcoin Gold, having large companies control the Bitcoin network defeats the purpose of a decentralized ledger and peer-to-peer currencies.
In response, they’ve initialized the Bitcoin Gold project. It’s an alternate fork of the Bitcoin blockchain that implements changes that make mining more equitable. The goal for Bitcoin Gold is to create a network where anyone can become a miner with only basic hardware. As a result, Bitcoin Gold mining would be spread among many miners, instead of a few large companies.
Is Bitcoin Gold going against Bitcoin?
Not necessary. While other hard forks, like Bitcoin Cash, cannibalized some miners from the Bitcoin network to work on the new blockchain, Bitcoin Gold’s anti-ASIC algorithm means virtually none of Bitcoin’s current miners will want to switch to mining BTG.
Who gets Bitcoin Gold?
Since Bitcoin Gold is a fork of the original Bitcoin blockchain, everyone who owned Bitcoin before the fork will own the same amount of Bitcoin Gold, at a 1:1 ratio. You won’t need to do anything special to receive the BTG, but you also can’t claim it right away.
With the other Bitcoin fork (Bitcoin cash), you could just leave your Bitcoin in your Coinbase wallet and you will automatically claim Bitcoin Cash. With Bitcoin Gold, you need to walk the extra mile and claim it in another wallet. Here’s one way you can do it:
- Move your current Bitcoins to a new Bitcoin wallet with a new seed/private key.
- Export the seed phrase of your previous wallet.
- Import the seed phrase into Coinomi.
- Add Bitcoin Gold to Coinomi and change the derivation path. Claim your BTG.
Once you have access, you’ll be able to trade BTG on nearly 20 exchanges. If you don’t own Bitcoin Gold, you’ll be able to buy it once the network is active later this month.
One of the very first updates made to the Bitcoin Gold ecosystem was replay protection because a common problem with bitcoin forks is transaction replay. A replay is possible because both the original blockchain and the newly branched blockchain contain the same transaction history.
As a result, malicious users could replicate a transaction from one blockchain to the other, effectively receiving twice the cryptocurrency. Bitcoin Gold implements replay protection that makes one blockchain’s transactions invalid on the other.
What’s next for Bitcoin Gold?
The official roadmap indicates that the developers aim to continue pushing towards making Bitcoin Gold a standalone cryptocurrency. It says it will develop new features on top of the bitcoin blockchain, but exact details remain to be seen.
The general consensus from Bitcoin experts is there’s not enough new in Bitcoin Gold to warrant an independent investment. While it certainly doesn’t hurt to hold onto your free BTG that you receive as a result of the fork (if you owned Bitcoin before Oct 24), wait until the dust settles before deciding whether to buy more.
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