Bitcoin Gold is a free, open-source cryptocurrency project that came into being as a result of a hard fork (split) in the original Bitcoin Blockchain. The digital currency brands itself as a new version of the popular Bitcoin cryptocurrency even though it maintains the transaction history of Bitcoin. People who owned Bitcoin before the hard fork can now trade it for an equivalent of Bitcoin Gold.
Bitcoin Gold History
Bitcoin Gold came into being after a hard fork of Bitcoin Blockchain on 24th of October, 2017, at block height 491,407. The cryptocurrency was officially launched on the 12th of November 2017.
Since its launch, Bitcoin Gold has come under immense criticism on concerns that a few developers were given a window of time to mine the new network thus reducing the number of coins available to the public.
Immediately after the hard fork, Bitcoin Gold was hit by a denial of service attack that resulted in network overload which eventually took the network offline.
On November 20th, a fraudulent wallet called ‘MyBTGwallet’ was discovered to be scamming innocent users on the network. It has since emerged that as much as $3.3 million may have been lost because of the scam.
How Bitcoin Gold Works
Bitcoin Gold works on the basic principle of Blockchain technology. Any given Blockchain in the network consists of a single chain of discrete blocks. The network acts as a shared public ledger made up of all confirmed transactions. A Bitcoin wallet consists of a secret piece of data called a private key, which people use to sign transactions and provide mathematical proof that they are the rightful owners, and a public key which is attached to all transactions and broadcast publicly over the Blockchain.
Public keys prevent transactions from being changed or manipulated by other users. All transactions carried out by users on the network are confirmed within 10 minutes and broadcast for everyone to see. Once they have been added to a Blockchain, they can’t be changed.
Bitcoin Gold vs. Bitcoin
Bitcoin Gold and its sister currency Bitcoin are similar in almost all respects. They both share the same transaction processing time of 10 minutes. The maximum supply of coins that either cryptocurrency will ever have in the market is capped at 21 million. However, given the hard fork, they also differ on one major aspect.
The major difference between Bitcoin and Bitcoin Gold is how the two are mined.
At this point, Bitcoin is mostly mined by highly-specialized computers that apply specific integrated circuit ASICS. Bitcoin Gold, on the other hand, intends to democratize the mining process with an algorithm that is not susceptible to ASICs. The proposed mining process will allow users to earn extra cash as was once the case in the early days of Bitcoin.
Bitcoin Gold Mining
Bitcoin Gold uses an Equihash algorithm for mining purposes. Bitcoin, on the other hand, relies on the SHA-256 algorithm. Both algorithms are Proof-of-Work which means they require miners to use computers to solve a hard-cryptographic puzzle.
A solution to a cryptographic puzzle allows you to mine a block which is then added on the Blockchain. Bitcoin Gold sets itself apart from Bitcoin by allowing anyone using commonly manufactured equipment to engage in mining. The process provides an equal opportunity mining environment which is in line with Bitcoin inventor Satoshi Nakamoto’s vision.