Bitcoin Gold: Distribution, Protection and Transparency

Bitcoin continues to hold its position as the world’s most valuable and widely recognized cryptocurrency. Nevertheless, the industry has seen the emergence of various derivative tokens that have gained prominence in recent times. One such token is recognized as Bitcoin Gold. Most of you have question in your mind, Bitcoin Gold: Distribution, Protection and Transparency , What is Bitcoin Gold? How to Mine Bitcoin Gold? History of Bitcoin Gold? and so on

What Is Bitcoin Gold?

Bitcoin Gold emerged through a hard fork of the original open-source cryptocurrency on October 24, 2017. Hard forks occur for a variety of reasons, including accommodating the growth of a cryptocurrency’s user base or addressing conflicts among developers and differing goals. The main aim of Bitcoin Gold, as articulated, was to “reestablish bitcoin’s decentralization.” Among the numerous forks of bitcoin, Bitcoin Gold attracted substantial attention and generated significant discussions.

At first glance, the concept of “reestablishing bitcoin’s decentralization” might seem paradoxical. Bitcoin, as well as other cryptocurrencies, is inherently designed to be decentralized; it functions autonomously, without ties to central banks, specific countries, or governmental bodies.

However, the impetus behind the inception of Bitcoin Gold did not revolve primarily around the issue of central issuance, which had sparked a notable problem with Bitcoin. Instead, the emphasis was on the mining process. The creators of Bitcoin Gold maintained the perspective that incorporating a fresh mining algorithm (precisely, a proof-of-work algorithm known as Equihash-BTG) would curtail the likelihood of imbalanced benefits favoring extensive mining operations in the new iteration of the world’s leading cryptocurrency in terms of market capitalization.

Understanding Bitcoin Gold

Engaging in Bitcoin mining is a potentially profitable venture, but it demands significant resources. The most economically advantageous mining operations usually entail the aggregation of multiple mining rigs, each requiring expensive and specialized equipment. Individuals who attempt to mine Bitcoin on their own are confronted with the decision to either invest a substantial amount of money and time in creating their own rigs or risk falling behind in the competition, given that their personal computers cannot match the efficiency of professional rig systems.

One of the core objectives of Bitcoin Gold has been to modify the mining algorithm of the cryptocurrency, ensuring that the mining process remains accessible on standard computer systems and is not disproportionately advantageous to specialized equipment.

Bitcoin Gold was not the first major hard fork of Bitcoin. Bitcoin Cash separated from the main cryptocurrency on August 1, 2017. Later, on November 15, 2018, a hard fork of Bitcoin Cash resulted in the creation of two distinct currencies: Bitcoin Cash and Bitcoin SV.

Distribution, Protection, Transparency

In addition to the primary goal of “re-decentralizing” Bitcoin and establishing a more inclusive digital asset ecosystem for smaller miners, there was a strong emphasis on security and transparency within the Bitcoin Gold project. Unlike some other blockchains, such as Bitcoin, the developers of Bitcoin Gold aimed to improve privacy by abstaining from publishing transaction details and wallet addresses. Given its nature as an open-source community-driven endeavor, both decentralization and transparency were fundamental principles upheld by the Bitcoin Gold community. Nevertheless, the persistent threats posed by hackers and malicious actors continue to be a significant source of concern.

In the domain of virtual currencies, smaller proof-of-work blockchains like Bitcoin Gold are particularly susceptible to 51% attacks, where an assailant tries to commandeer 51% or more of the blockchain’s computational power or hash rate. Although Bitcoin Gold has affirmed the incorporation of additional safety and security measures since its inception – including comprehensive replay protection – to enhance the security of users’ accounts and holdings, the blockchain has encountered three instances of 51% attacks and multiple cases of BTG wallet thefts.

The most recent occurrences of 51% attacks transpired in January 2020. The initial assault during that month led to the attackers acquiring 1,900 BTG, which was valued at approximately $19,000. In the subsequent attack, a sum of around 5,267 BTG, equivalent to $53,000, was illicitly taken. In the aftermath of the substantial loss experienced in May 2018, involving 388,000 BTG (roughly valued at $18 million), the cryptocurrency exchange Bittrex made the decision to delist the Bitcoin Gold (BTG) blockchain. This initial event prompted the Bitcoin Gold team to rework their mining algorithm, leading to the adoption of Equihash-BTG.

History of Bitcoin Gold: Launch and Controversy

The history of Bitcoin Gold has been intertwined with controversy since its inception. Right from the day of its launch in October 2017, BTG encountered a significant Distributed Denial of Service (DDoS) attack on its cloud platform. In the days immediately following the launch, miners made accusations against one of the developers of Bitcoin Gold, alleging the introduction of a concealed 0.5% mining fee without the knowledge of the mining community. Additionally, there were concerns about the effectiveness of Bitcoin Gold’s security measures, which appeared to be less robust than initially claimed, potentially rendering the network more vulnerable to threats.

Similarly, the creators of Bitcoin Gold employed a strategy known as a “post-mine” after the launch. This approach triggered concerns among cryptocurrency exchanges that were contemplating the listing of BTG. The post-mine involved retroactively mining 100,000 coins after the fork had already taken place. This was accomplished by rapidly mining approximately 8,000 blocks, and the outcomes of this process were set aside as a type of “endowment.” This reserve was intended to support the growth and maintenance of the broader Bitcoin Gold network. Roughly 5% of these 100,000 coins were distributed to each of the six core team members as a bonus, while the remaining 95,000 coins were designated to promote the expansion of the BTG community’s ecosystem.

At the outset, the cryptocurrency exchange Bittrex expressed reservations, but eventually agreed to list Bitcoin Gold. Their primary concerns were rooted in the insufficiently developed consensus code, the absence of implemented replay protection, the need for comprehensive code testing and auditing, and the lack of publicly recognized code developers associated with Bitcoin Gold. In light of these concerns, Bittrex cautioned their users about the existence of a “private premine of 8,000 blocks (100,000 BTG) within the Bitcoin Gold codebase,” advising caution in scenarios where developers might sell the premined BTG.

Following the occurrence of the 51% attack in May 2018, Bittrex sought compensation from Bitcoin Gold to offset the exchange’s losses, amounting to more than 12,000 BTG (valued at $255,000 at the time). However, Bitcoin Gold opted not to provide compensation, leading to the removal of BTG from the Bittrex platform.

During the initial launch period, holders of bitcoin were intended to receive Bitcoin Gold coins at a 1:1 ratio, a process referred to as an air-drop. Notably, Coinbase, one of the largest cryptocurrency exchanges globally, exhibited skepticism towards Bitcoin Gold during its launch. In contrast to Bittrex, Coinbase chose not to list BTG on its exchange. Coinbase representatives cited the unavailability of the code for public review, stating, “We cannot support Bitcoin Gold because its developers have not made the code available to the public for review. This is a major security risk.”

Upon its release in October 2017, Coinbase decided not to allocate BTG to Bitcoin holders on its platform. As a result, this choice triggered a legal case initiated by Daniel Archer against Coinbase on March 27, 2018. The lawsuit contended that Coinbase had violated the terms of their contract, citing negligence, conversion, and breach of contract. Initially, the court’s ruling highlighted that the agreement between Archer and Coinbase did not contain any clause mandating Coinbase to provide services for third-party cryptocurrencies. In August 2020, the appellate court upheld the original court’s summary judgment in favor of Coinbase.

In line with the ongoing trend of diminishing nodes, the number of active nodes for Bitcoin Gold has continued to decline. As of June 1, 2021, Bitcoin Gold maintains a network of 89 reachable nodes. It’s worth noting that the highest concentration of nodes is situated in Germany (22 nodes), followed by the United States (18), France (8), Canada (6), and the Netherlands (6). Reference: Bitcoin Gold. “Bitcoin Gold Nodes Distribution.”

Bitcoin Gold’s Availability on Exchanges

As highlighted by the cases of Bittrex and Coinbase, a cryptocurrency’s availability on various exchanges plays a pivotal role in determining its short-term and long-term success. Accessibility on exchanges is essential for facilitating user transactions involving the cryptocurrency.

According to information provided on the Bitcoin Gold website, as of June 1, 2021, the cryptocurrency was actively traded on a diverse range of platforms. These platforms include Bithumb, Bitfinex, Binance, HitBTC, Uphold, Exmo, Gate.io, BitBay, Huobi, Cex.io, Okex, Unocoin, Coinone, Koineks, Coinfeld, Coindirect, Zebpay, NiceHash, LATOKEN, Bione, p2p b2b, Folgory, WhiteBIT, Bitubu, Indodax, Vindax, Coinbit, Probit, Wazirx, BW, CoinDCX, VeBitcoin, and Huobi Global.

The cryptocurrency is also conveniently available through more than 20 wallet services, such as Trezor Wallet, Ledger Wallet, Exodus, Coinomi, Guarda, Freewallet, BTGWallet, and Kasse. According to the details provided on the official website, the cryptocurrency has been successfully listed on over 40 exchanges that facilitate transactions with 11 different national currencies, as of June 1, 2021.

Future of Bitcoin Gold

In the coming period, Bitcoin Gold has defined its plans to undertake research focused on smart contracts and blockchain governance. Simultaneously, it aims to progress in creating a decentralized fiat-crypto brokerage network.

As detailed in the 2021 BTG Roadmap, the main areas of development emphasis comprise interoperability, enhancing applications, strengthening infrastructure, and integrating with the lightning network. Bitcoin Gold has communicated its intentions to foster mutual interactions with other blockchains and ecosystems, emphasizing its ongoing work to construct a connection to the Phala Network.

They express their plan to shift from a governance structure centered on a Board to a more modern model based on DAO (Decentralized Autonomous Organization). Continuing endeavors are focused on improving crucial elements within their technological framework, and the revisions for specific components—like their explorers and ElectrumG—are nearing completion. BTG acknowledges that even though the present transaction volumes and fees don’t require an immediate implementation of a layer-2 lightning network solution, they are actively evaluating this possibility for upcoming considerations.

FAQs

What Happened to Bitcoin Gold?

Bitcoin Gold emerged as a hard fork from the original open-source cryptocurrency on October 24, 2017. As of June 1, 2021, the value of Bitcoin Gold was $58.98, and it boasted a 24-hour trading volume of around $38 million.

What Is the Difference Between Bitcoin and Bitcoin Gold?

Although both Bitcoin and Bitcoin Gold utilize a proof-of-work algorithm, they exhibit differences in specific facets. Bitcoin Gold adopts the Equihash-BTG algorithm to mitigate the concentration of mining by large operations employing specialized equipment. In contrast, Bitcoin miners use the SHA-256 hashing algorithm. In the realm of Bitcoin mining, the task of defining the hash value and demonstrating the corresponding proof of work becomes progressively intricate as hash targets evolve. As a result, the rising complexity necessitates heightened computational power for effective mining. This situation creates a predicament for smaller miners, given their constrained computing capabilities.

What Significance Does BTG Hold in the Cryptocurrency Realm?

BTG stands for Bitcoin Gold, a hard fork that originated from the original Bitcoin cryptocurrency.

In What Ways Is Bitcoin Gold Employed?

Bitcoin Gold serves diverse purposes, including the facilitation of smart contracts, the creation of open-source bridges for computing technology, and enabling seamless payment transactions.

When Was the Bitcoin Hard Fork Event?

The pivotal Bitcoin hard fork event took place on October 24, 2017.

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