A lot of people talking about a new division in the network (hard fork) of the Bitcoin called SegWit2X, but before this important event that we treat other posts (here and here), the bitcoin protocol probably will pass through another bifurcation that give rise to a new currency known as Bitcoin Gold (BTG).
Announced a little before the Bitcoin Cash, another hard fork that occurred in August, the Bitcoin Gold coins should occur sometime in the month of November. In this article, we will examine what it is exactly this Bitcoin Gold, how and when it will be forked from the Bitcoin network and what you need to do to prepare yourself.
. What is Bitcoin Gold?
The Bitcoin Gold is a creation of Jack Liao and will be released as a hard fork of Bitcoin. The objective of the BTG is to become a better Booking Value, hence the name Gold (gold), that the Bitcoin. The main way to achieve this purpose is to try to resolve the problem of centralization of Bitcoin mining to implement a change in the proof of work (proof-of-work) of the mining algorithm of the asset.
To ensure that this happens, you will need to do a hard fork. The proof of work that was chosen by the creators of the BTG is the Equihash, an algorithm that is very resistant to ASIC and which is also used by the Zcash, another currency in the world famous cryptanalysis. The idea is to return to ordinary users the mining task to use CPUs and GPUs to mine instead of computers ASICs, which require large-scale operations, very energy consumption and are dominated by large pools of mining.
The developers of the BTG are also considering pre-mine up to 1% of the coins. How they will perform this is still not very clear, but they probably take for himself a part of the rewards of mining, despite the promise of keeping the emission limit of BTGs similar to Bitcoin, i.e., 21 million units.
. What makes the resistance to the ASIC so special?
ASICs mean applied specific integrated circuits (Application Specific Integrated Circuits, in English). They are different in relation to the CPUs, because they do only one thing, but they are very, very well.
The Bitcoin mining is currently completely dominated by ASICs, the majority being produced by the Bitmain, Bitfury and Canaan. This is due to the fact that the function of proof of work of the Bitcoin (SHA256) be fairly simple and does not require a lot of memory (RAM). Equihash, on the other hand, is a hashing function quite complex and requires a lot of RAM to perform. This means that it is much more expensive to produce ASICs to meet the Equihash and the speed gain is not near equivalent to the cost.
For you have idea, a normal CPU can mine SHA256 in approximately 5-10 MH/s. An ASIC can mine SHA256 in approximately 5-10 TH/s, or around a million times more work per second that a CPU can do. By comparison, a normal CPU can mine Equihash in approximately 10-30 H/s, while specialized equipment could do this in about 1000-3000 H/s, or around 100 times more work per second.
In other words, the playing field is much more conducive to Equihash than for SHA256 due to resistance to ASIC. It is obviously very difficult to know how the economic issue change if mine Equihash became more profitable, but it is reasonable to say that the efficiency gain would still be much smaller than SHA256.
. When will occur the hard fork?
The plan of the developers of the Bitcoin Gold is choosing a block on 25 October 2017 and to make the bifurcation in the network from him. At least that is what is written on the site of the Bitcoin Gold and in official communications via Twitter. However, this does not mean that the token will be released on that day. This only means that from that moment on the BTG begin to mine their own blocks from a certain point of blockchain of Bitcoin.
Currently, the forecast is that the token is released in early November, which means that the blockchain of BTG has no block for a week more or less.
The developers of the Bitcoin Gold plan to create a network of testing at some point in the second fortnight of the month of October. They will provide the software soon after that.
. What does this mean for us?
The Bitcoin Gold only have some consequence if you holds Bitcoin when developers of BTG choosing a block to perform the hard fork, i.e. on 25 October. You then will receive the same amount of Bitcoin Gold in relation to the amount of Bitcoin that you hold in that moment.
The developers plan to implement a strong protection scheme against replay attacks, so you probably don’t need to worry about it. However, you probably need to download a wallet or build transactions manually to be able to move their tokens of Bitcoin Gold.
Basically, if the Bitcoin Gold not worth very much (less than 0.0001 BTC or around addition), probably not worth doing nothing in relation to these tokens. However, if it be worth something, say 0.01 BTC or more, we see tools being made available by the developers of the portfolio, which will probably write the code of these applications for you to access its BTGs.
If you keep your BITCOINS in a broker, at some point the broker will make this credit to you. However, keep in mind that this could take a very long time. Just look at the delay in the Bitcoin Credit Cash which occurred in some brokers. Therefore, it is best to control their own private keys, because it gives you more flexibility to do what He pleases with their new coins.
The Bitcoin Gold is another hard fork which may bring changes to the ecosystem of the Bitcoin. If you are a holder, i.e., that saves your coins with long-term thinking, doesn’t have much to fear and this bifurcation probably mean “free money” for you. Now, if you are a developer of portfolio or works at a brokerage firm, the story is different and you need to take the necessary actions to absorb this new currency.
Want to know about bitcoin gold mining?
See our articles on bitcoin gold mining.