Bitcoin is often referred to as digital gold. It is unsurprising that with numerous Bitcoin spin offs there is one aptly named Bitcoin Gold (BTG). Bitcoin Gold is a version of Bitcoin but it’s designed “for everyone, for everything” according to their website. But what actually is Bitcoin Gold?
The creation of Bitcoin Gold
Bitcoin Gold is a fork of Bitcoin that occurred on October 24th 2017 at block height 419406. The tagline “for everyone, for everything” appears to be in relation to the developers’ dislike of ASIC mining.
ASICs are specifically produced chips for cryptocurrency mining. They have been blamed for the centralisation of mining on Bitcoin and Ethereum. Many cryptocurrencies have begun to fight back against ASIC mining and Bitcoin Gold is just one of them.
With Bitcoin Gold, the mining functionality can be achieved on traditional GPUs which makes it more accessible for the average user to mine the cryptocurrency. This, in theory, should further decentralise the network but is accompanied by other risks such as a less secure blockchain.
Bitcoin Gold is open source, meaning that anyone can contribute to the development of the network.
There is a core development team behind the cryptocurrency led by Jack Liao and the other five co-founders. According to their website, “strategic decisions are made by the board, with input from the team and advisors”.
Their GitHub is fairly active, with the most recent commit happening just three days ago.
Attacks on the network
Bitcoin Gold didn’t have the best first year of operation. In May 2018, the network suffered a 51% attack which led to 388,000 BTG being stolen from several cryptocurrency exchanges. This equated to around $18 million at the time.
Bittrex was one exchange that suffered from the attack and refused to help pay some of the damages. It subsequently delisted Bitcoin Gold from the platform.
The attack on BTG highlights the insecurities that networks can face when they fork from Bitcoin. In doing, so they tend to lose a lot of the hashing power that is supposed to secure the network.
By attempting to decentralise the mining further they have made the network more insecure.
The price history of the cryptocurrency doesn’t make for pretty reading either. Having started trading at $470 (a fraction of what BTC was worth at the time), BTG went on to reach an all-time-high of $539 in the same month of the fork.
Since then though the price of the cryptocurrency has collapsed, reaching a low of $9 in January 2019. The coin recovered slightly, but when compared with BTC has lost the majority of its value.
Unless the developers of BTG have something radical up their sleeve, it looks unlikely that Bitcoin Gold will have much of an impact on the cryptocurrency industry as a whole.
Much of the future development for Bitcoin Gold appears to centre around the Lightning Network, a second layer solution also being implemented on Bitcoin. Whether this would be enough to revive the cryptocurrency remains to be seen when much of this activity is already taking place on the main Bitcoin network.
They are also introducing Schnorr Signatures but, again, this is being implemented on both Bitcoin and Bitcoin Cash. Much of the future developments are enhancements that will be taking place on other versions of Bitcoin, thereby not setting Bitcoin Gold apart other than its rejection of ASICs.
BTG is available on many exchanges including Huobi, Binance and Okex. Both Trezor and Ledger wallets also support the cryptocurrency as well.
Their subreddit r/BitcoinGoldHQ is relatively small when compared with some of the major cryptocurrency subreddits. With only 2000 members, it could be suggested that there isn’t a massive community supporting the project.
Bitcoin Gold is one of many versions of Bitcoin competing in a very crowded marketplace. Since becoming tradable on the open market, the cryptocurrency has lost much of its dollar value. This coupled with the 51% attack and the lack of unique developments implies that BTG will have a hard time to regain any semblance of a market share.
Whilst the rejection of ASICs is a noble cause, it has resulted in an insecure network. Unless there is a large increase of hash power, an increase in the size of the community and a substantial increase in price, it is likely that Bitcoin Gold is going to fall by the wayside like so many before it.