Story of the coin: Bitcoin Gold
by MinerGate Mining Pool June, 13, 2018
Today Bitcoin Gold is one of the easiest coins to mine! Due to its new Proof of Work algorithm any person with a CPU or GPU can start mining it. This bitcoin fork was created to “make bitcoin decentralized again”.
What is Bitcoin Gold?
Bitcoin mining these days is almost completely controlled by industrialized miners and by manufacturers who sell products to them. Solo miners just can’t compete with large companies, and their specialized computers – with application-specific integrated circuits (ASICs), built specifically for mining.
The new hard fork of Bitcoin, named Bitcoin Gold, was created to change this situation. BTG`s main purpose is not to compete with Bitcoin, but to help the crypto space avoid the monopolizing tendencies of ASIC mining, to return mining power to ordinary hardware and finally “make bitcoin decentralized again”. To reach their goals, Bitcoin Gold developers use a new proof-of-work algorithm, Equihash, which allows individuals with standard laptop computers to successfully compete with professional rig systems.
When and how Bitcoin Gold appeared
Bitcoin Gold was born October 24, 2017. The founder, Jack Liao, also owns Lightning ASIC – a company selling GPU miners and ASIC miners. There are five other co-founders, including an anonymous lead developer.
Bitcoin Gold resembles BTC in many aspects, but its mining algorithm is completely different: it can`t be run faster on the specialty mining equipment. It allows to spread mining of Bitcoin Gold among many individuals. In April 2018 BTG already had 246 reachable nodes with the highest concentration in Germany and the USA.
- According to the official website, the cryptocurrency is trading live on almost 40 exchanges and available through the following wallet services: Trezor Wallet, Ledger Wallet, Coldlar, Exodus, Coinomi, Bitpie, Guarda, Freewallet, Kasse, Cobo.
- According to Coinbase, the platform is finally going to allow users to withdraw forks of the Bitcoin protocol; and Bitcoin Gold for Coinbase is the first candidate for this.
- n Q2 2018 BTG going to develop Payment systems integrations with a debit card program.
- Bitcoin Gold market capitalization is obviously on the rise. Right now it ranked the 23rd cryptocurrency by market capitalization.
- To start mining BTG is pretty easy as it’s one of the MinerGate-supported coins.
Features and important issues
The Proof of Work algorithm
The main change in BTG is a new hashing algorithm. With the standard Bitcoin algorithm, the usage of complex hardware (CPU, GPU) was a waste of resources; it was much more effective to create specific hardware for mining (ASIC). But Bitcoin Gold uses a Proof of Work algorithm called Equihash. It’s memory-oriented i.e. Bitcoin Gold mining depends on how much RAM a computer has and how many things it can do to complete a task. ASICs with their pure processing power are ineffective here, but desktop computers with multiple processing cores solve the tasks easily. Equihash supports fair mining infrastructure and gives individual miners an opportunity to compete.
New difficulty adjustment algorithm
The new mining difficulty adjustment algorithm was implemented: without it, larger miners would be able to influence the mining difficulty to get greater gains.
Until the fork occurs, Bitcoin Gold is a copy of the Bitcoin blockchain: it uses almost identical address formats and network protocols. To prevent loss of funds when the same transaction is broadcast to two different networks, BTG developers have added 2-way “replay protection”. An algorithm calculates the hash of a transaction to identify it, and that is why transactions on one chain are invalid on the other chain.
Recent “51% attack”
A few days ago Bitcoin Gold was hit with a 51% attack. The hackers controlled more than half of the network’s hashing power, which allowed them to steal up to $18 million from online exchanges. With 51% of power, attackers could make reversing transactions, spending the same coins more than once: they made deposits, traded the coins for BTC or another coin, withdrew the funds and then returned those coins back in their wallet. In a normal situation the blockchain would include only the first transaction in the block, but now, with the attackers’ majority control, double-spending became possible.
Details of the upcoming network update
In response to the attack, developers are going to change their Proof of Work algorithm again. If more individual miners join the network instead of massive mining conglomerates, it will be much harder for attackers to obtain such control again. And if now BTG shares Equihash with other coins (so that the pool of its power is much bigger than BTG network hashpower), after an upgrade there will be a different algorithm without such a large amount of power. It will make BTG much more protected from 51% attacks.
One of the main purposes of the upcoming upgrade is to make Equihash even more ASIC-resistant so that BTG could not be mined on new ASIC hardware. According to BTG blog, “Our upgrade may make the current crop of miners useless for mining BTG, but this does not prevent them (or others) from trying again. The Bitcoin Gold Organization is committed to repeating this process as necessary. In time, anyone buying BTG-specific miners will learn that their investment is always lost, and the producers of this hardware will see that huge spending to develop custom hardware doesn’t lead to the profits they’re hoping to grab”.
The BTG 2018 Roadmap announced that later this year they are going to finalize integrations to fully implement Lightning Network (this will enable almost instant payments with lower fees). They will also bring support for P2Pool, a decentralized approach to mining pools, that works by creating a peer-to-peer network of miner nodes.
Now the total Bitcoin Gold in existence is more than 17 million, with a market capitalization of nearly $736 million, trading at a price of $43.17 USD. Its average transaction value is 55.40 BTG ($2,310 USD). The current block time (average time between blocks) is 9 minutes 17 seconds via block size of 5.417 Kbytes. Block reward is 12.5 BTG ($521.36 USD).