Bitcoin Gold will be a new cryptocurrency that will split from Bitcoin blockchain at block 491,407 the 25th October 2017. This new cryptocurrency will start to be traded on November the 1st on the exchanges that would support it.
As Bitcoin Cash developers believed that transactions were taking too long and were becoming expensive because of the costs involved in each transaction, the main reason why Bitcoin Gold is splitting from Bitcoin, is that its creators believe that Bitcoin is not a really decentralized cryptocurrency. Individual miners are struggling to make profits, while some few big companies are having enormous returns and all the mining power on their hands.
During the first years of Bitcoin, mining was done by normal users with their own personal computer. Now, big mining companies use ASIC (application-specific integrated circuit) hardware processors which are much faster than normal GPU processors. In this way, these big enterprises concentrate Bitcoin in their hands and leave normal users without the possibility of mining on their own. Something that violates the one-CPU-one-vote ethos described in the Bitcoin white paper.
Bitcoin Gold is good for Bitcoin
Bitcoin Gold does not claim that it is the real Bitcoin, but instead, this fork could be healthy for the Bitcoin community. Why is it like that when the hard forks could divide the community and could undermine the confidence in Bitcoin? As the market showed us, Bitcoin price is in an upward trend pushed by the fact that the people that will own Bitcoins on October the 25th (the date when the fork will occur), they will have an equivalent amount of Bitcoin Gold that would be able to be used on November the 1st. When a fork happens, the coins that investors have get multiplied in the new blockchain that is created. This new blockchain follows a new path independently from the old blockchain.
This situation produced a migration of investors from some cryptocurrencies like NEO, IOTA or Bitcoin Cash, to Bitcoin, providing more trust to the first cryptocurrency on the market. Because of the same reason, Bitcoin is recovering part of the total market capitalization that lost during the last year against other cryptocurrencies. When the first fork happened on August the 1st, people was not sure enough about what was going to happen. Now they are conscious of what is going to occur.
Characteristics of Bitcoin Gold
As it is described in the webpage, the central features of this new cryptocurrency are decentralization, fair distribution, replay protection and transparency. With decentralization, as explained before, Bitcoin Gold “implements a new PoW algorithm, Equihash, that makes mining decentralized again. Special computer hardware designed for BTC mining is obsolete for mining BTG, giving ordinary users a chance to mine with GPUs”.
Fair distribution claims that, when a hard fork of Bitcoin occurs, new digital asset is distributed efficiently and fairly. Instead, cryptocurrencies created from a new genesis block are concentrated in a small group of people, leading to a distribution of coins that is not fair and efficient.
Replay protection is a mechanism used to ensure the safety of the Bitcoin ecosystem. This feature “protects users’ coins from being spent accidentally”. Consequently, if you make a transaction in the new blockchain, your coins are protected with this technology.
When Bitcoin Gold defenders claim that this new coin is transparent, it is because Bitcoin Gold is “a free open source software project that is built by volunteer developers and supported by a rapidly growing community of Bitcoin Enthusiasts”.
Who created Bitcoin Gold?
Jack Liao is the CEO of Hong Kong mining firm LightningAsic. He has been working on this project with Robert Kuhne, Alejandro Regojo, h4x3rotab, Franco Niebles, Martin Kuvandzhiev and Duke Leto. LightningAsic also sells ASIC processors and hardware wallets to the public.