Is Bitcoin Gold The Next Cash Cow?
Since its inception, Bitcoin has had quite a few forks with one of its latest, Bitcoin Cash, having gained traction in the last month. Simply put, forks usually occur when trying to address and resolve an issue in a given cryptocurrency with the hopes of making it better. Bitcoin Gold (BTG), the latest instalment in the Bitcoin fork line, went live on November 12 after being victim of a distributed denial of service cyber attack on their website. To see how this new coin will compete, we must first find out the underlying details behind its technology, its founders, and its premise. In this article we will also discuss why the potential of success for BTG should not be underestimated.
What is Bitcoin Gold?
Bitcoin Gold is one of the latest Bitcoin forks founded by Jack Liao. In Liao’s opinion, Bitcoin mining is no longer decentralized and has been taken over by Bitcoin mining pools. A concept that contradicts Satoshi Nakamoto's initial idea of a decentralized peer-to-peer cash system. If he is right, this is in fact a big issue that needs to be resolved as the core value of the cryptocurrency market is the notion of decentralization.
It is important to understand that mining gradually becomes more centralized as it requires faster machines and bigger investments, often not affordable by everyone. According to Liao, the sole idea of having bigger blocks is also not the best solution for bitcoin as it will eventually lead to centralization (gigabyte blocks requiring substantial investments in machinery).
Bitcoin Gold is tackling this problem by changing the PoW algorithm from SHA256 to Equihash and using GPU mining instead of ASICs, forcing any BTC miner who wants to mine BTG to have to buy new mining equipment as it will not be compatible with the new algorithm. Other than that, BTG and BTC’s block size and block interval remains the same at 1MB and 10 minutes respectively. So it seems as though the idea behind Bitcoin Gold is to fundamentally restart bitcoin from scratch with only a few minor tweaks.
What About the Team?
On the Bitcoin Gold official website they advocate transparency, but immediately contradict themselves by naming their lead developer h4x3rotab, leaving him/her anonymous. It is also very difficult to find much information on the founder Jack Liao himself, other than that he owns Lightningasic, a hardware e-tailer selling mining equipment and accessories. This could be considered a conflict of interest, as he is forcing any BTC miner who wishes to mine BTG to have to change equipment. The Bitcoin Gold team were also under scrutiny as they were caught having hidden fees implemented in the mining pool code. They have since removed them. But considering that Satoshi himself wished to remain anonymous upon the creation of Bitcoin, will the anonymity of BTG developers be an issue? This is a topic to think about.
To conclude, Bitcoin Gold is an interesting solution to the scaling and centralization debate. For now, nobody knows how it will play out exactly. However, at some point, it might become profitable for GPU miners to mine the BTG chain, thus making it more secure and attracting popular attention to it. Bitcoin Gold might be a different solution for the never-ending debates, but it’s potential to become ‘one of the solutions’ is existent. Looking at its $5B market cap, it seems like there is still potential for future growth considering the overall expansion of the cryptoverse. But for now, the future holds its deepest secrets for the industry, and all we can do is guess the outcomes or define them by using past history reports.