Bitcoin Gold is a fork of the original Bitcoin code which first hit exchanges at the start of November 2017. To understand why Bitcoin Gold was created, there must first be a brief history lesson, as Bitcoin Gold provided solutions to two issues which were very significant at the time of creation.
At the end of October 2017, Bitcoin had a couple of glaring problems. First, Bitcoin had become very expensive to send. Due to the size of the blocks not being large enough for all the transactions that were being put through the network and long delays between blocks, BTC related transactions faced long delays.
Second, the Bitcoin network was, and still is, largely comprised of ASIC-miners. ASIC-miners are available to everyone, but they are mostly owned by large mining operations, including countries. Furthermore, they have created a very centralized source of power, Bitmain, who manufacture ASICs and are the owner of two of the largest BTC mining pools.
With so many people using Bitcoin, more Bitcoin networks were needed to keep up.
First came Bitcoin Cash, which is essentially the same thing as Bitcoin, but created a second network with less competition for mining because of the larger block sizes (8MB compared to 1MB), and lower fees due to less usage.
That still did not solve the problem of ASICs controlling the network, so Bitcoin Gold was made to solve that problem as well. They kept the original Bitcoin ledger, which meant any holders of Bitcoin now also had an equal number of Bitcoin Gold tokens as well.
Bitcoin Gold uses an algorithm called Equihash-BTG, a customized version of Equihash that offers increased ASIC resistance when compared to other coins that use the regular Equihash algorithm, such as Zcash, ZenCash, Zclassic, Komodo, and several other variants of Bitcoin that came out later (Bitcoin Interest, Bitcoin Private, and others).
Equihash is a memory-intensive algorithm, requiring a greater degree of memory usage than SHA256 (Bitcoin’s algorithm that ASICs use). The idea is that memory is so expensive, it won’t be cost-effective to produce an ASIC that can solve Equihash equations. This no longer seems to be the case. In May, it was reported that 30% of Equihash mining was being performed by ASIC hardware. Bitcoin Gold reacted to this by modifying their algorithm to protect their network from centralization.
Below is a comparison explaining the differences and similarities between the three Bitcoins. They are all more or less the same thing, but it gives users a choice of which network to send their tokens to get the fastest transaction speeds.
If Bitcoin had been upgraded by the core developers to scale better and sooner, these tokens, most likely, would have never been created.
Today, Bitcoin utilizes the Lightning Network to make micro-transactions and multiple transactions much easier. Bitcoin Gold still provides a much greater decentralized Bitcoin network than either Bitcoin or Bitcoin Cash ever could at this point. This is still a big deal for those who value the community aspect and integrity of the projects they use.
Interesting Facts:
● There are over 50 forks of the original Bitcoin code. Most of them have died.
● Although Bitcoin Gold has lost over 90% of its highest value ($478 at the highest, $24 at the time of this writing), it looks like it will survive past its 1st birthday in October.
● The Bitcoin Gold Foundation is a large team from around the world who actively work on this project.
● The founder of Bitcoin Gold is Jack Liao, the owner of LightningAsic, a competitor to Bitmain, who also sells GPUs and likely had taken a big hit of business. He had the big idea to open his own version of Bitcoin so he could sell more hardware and potentially keep some of the 1% of tokens pre-mined for future development.
● Despite so many similarities and their name, there is no actual affiliation with the Bitcoin project or its team.
Website: www.bitcoingold.org
Roadmap: https://bitcoingold.org/wp-content/uploads/2017/10/BitcoinGold-Roadmap.pdf
Coinmarketcap: https://coinmarketcap.com/currencies/bitcoin-gold/
