What is Bitcoin Gold?
Bitcoin Gold (BTG) is a digital currency that appeared as a result of Bitcoin (BTC) hardfork. The key goal of Bitcoin Gold is to replace the original Bitcoin to become the main digital gold. The main principle differentiating BTG from the original Bitcoin is the decentralization of mining. Bitcoin Gold was born on the basis of Bitcoin (BTC), working on the PoW algorithm, and switching from the SHA256 to the Equihash (requiring RAM) most adapted for the GPU and more resistant to ASIC mining. BTG was considered as an emergency mechanism to restore the parent network if a failure occurred as a result of the SegWit2X hardfork (for example, a serious network split that could make a situation of complete, simultaneous, duplicated transactions for BTC and B2X).
Bitcoin Gold Website
BTG History
Jack Liao is the owner of mining farms located in Hong Kong and the ideological inspirer of BTG. The first block number 491 407 was mined on 24.10.2017 in the new Bitcoin Gold network. The blockchain network launch was intended for early November, but the actual launch and BTG mining started a little later on 13.11.2017 due to massive attacks on the servers (right after launch, the Bitcoin Gold mining pool came under a powerful DDOS attack. The developers took much more time to fully launch the network, a total of over 10 hours. Due to this hacker attack, the BTG market price immediately fell by 50%). During this time, BTG developers generated 8,000 blocks in the premine process with an award of 12.5 BTG. 95% of these funds went to the project development and the remaining 5% was divided as shares equally between the six main developers.
BTG has a limited issue of 21 million coins. The time required for one block generation is 10 minutes, and the complexity of mining increases after each newly created block. Just as in the case of BCH, BTC owners received free BTG coins at the time of the chain separation.
Bitcoin Gold Vs Bitcoin Vs Bitcoin Cash
BTG has its own slogan - “Let's make Bitcoin decentralized again.” The creation of the Bitcoin Cash (BCH) hardfork was needed to speed up the network. As a result of the changes, the BCH block size increased to 8 mb.
From the outset, the project had some difficulties identified by users, such as:
- Problems with synchronization
- 51% attack possibility - at the time of the network launch, 95% of computing power was concentrated in the pool BTGPOOL.PRO
- Some BTG theft through a third-party wallet posted on the official website (Over $ 3.3 million in BTG was stolen. The owners of mybtgwallet.com posted a form where users entered their seed-phrases. All the victims claimed that they came to mybtgwallet.com using the link from the oficial Bitcoin Gold social networks in full confidence that the service is supported and approved by the Bitcoin Gold developers. Indeed, earlier the Bitcoin Gold development team gave a link to mybtgwallet.com on Twitter, assuring users that it was safe to use this wallet. A MyBTGwallet widget even hung on the Bitcoin Gold website)
Despite these shortcomings, after the launch of the network, both traders and miners from around the world showed their interest. The Bitcoin Gold platform is very similar to BTC, with basic principles of networking, such as:
Easy to deposit and withdraw funds
Instant funds transfer after transaction verification
Low fees
Anonymity and high decentralization level providing additional privacy
Bitcoin Gold Mining
A cryptocurrency algorithm is a set of specific cryptographic mechanisms and rules that encrypt a digital currency. Miners use special equipment for hash searching and decryption. Once the miner has found the correct hash, he produces a new block composed of transaction details, the previous block hash data, and the reward amount.
The most popular encryption protocols are: SHA-256, EtHash, Scrypt, X11, CryptoNight, EquiHash, X13, Quark, and NeoScrypt. Bitcoin (BTC) uses SHA-256, and Bitcoin Gold (BTG) uses Equihash.
BTG was considered as an emergency mechanism to restore the parent network if a failure occurred as a result of the SegWit2X hardfork (for example, a serious network split that could make a situation of complete, simultaneous, duplicated transactions for BTC and B2X).
SHA-256 Vs Equihash
SHA-256 (Secure Hash Algorithm) is a secure encryption algorithm that has gained popularity after being used in the Bitcoin system. This algorithm generates a 256-bit hash and the hashrate for SHA-256-based cryptocurrencies is calculated in units of Gigahash per second (GH/s). It takes between 6-10 minutes to generate one block.
The SHA-256 algorithm was invented by the US National Security Agency in 2001 and is the one and only cryptocurrency algorithm that has passed all tests for resistance to the most popular hacker attacks. Thus it is very important for the security of cryptocurrencies.
In addition, SHA-256 is also widely used in other technologies; for example, the operation of security protocols such as TLS, SSL, PGP, and SSH. Back when Bitcoin was known by only a very limited circle of people, ordinary computers performed calculations using the CPU for mining. Then the miners began to use a more powerful GPU. Now that Bitcoin is incredibly common, only the use of ASICs is profitable.
Equihash
Bitcoin Gold uses the Equihash protocol - an anonymous cryptocurrency algorithm that was released in 2016. The first cryptocurrency that used Equihash was Zcash.
Block generation takes 2.5 minutes, with the hashrate measured in Megahash per second (MH/s). The basis of this algorithm is a hash function built on the principle of the "Birthday Paradox", a mathematical regularity for probability calculation. The rule reads: If there are 23 or more people in the room, the probability that at least two of them have the same birthday (day and month) is 50%.
This cryptocurrency algorithm was developed by Alexander Biryukov and Dmitry Khovratovich, Université du Luxembourg scientists, participants of the CryptoLUX research group.
