Nov 14, 2018 23:30 UTC
Nov 16, 2018 at 12:17 UTC
A Beginner’s Guide to Bitcoin Gold
Investing in cryptocurrencies is serious business and while doing your due diligence before you commit to buying a certain cryptocurrency, you must have a thorough idea what you are getting into. While you may know the basic pros and cons of Bitcoin Gold, you are probably wondering about what it really is, how it works and how you can actually grab some for your own portfolio. Here’s the answer to all your questions about Bitcoin Gold basics.
What is Bitcoin Gold?
Bitcoin Gold is a hard fork of Bitcoin which attempts to address one of the biggest problems Bitcoin has today: centralisation. When too few mining pools collectively control a very large part of the total network, it poses a great risk to decentralization: one of the inherent principles of blockchain technology and cryptocurrencies. Bitcoin Gold’s well-publicized goal has been to “make cryptocurrencies decentralized again”. Whether or not it has been successful remains a question because this year itself we saw Bitcoin Gold hacked with 51% attack. According to the website of Bitcoin Gold or BTG, as its ticker name is:
“BTG is a cryptocurrency with Bitcoin fundamentals, mined on common GPUs instead of specialty ASICs.
ASICs tend to monopolize mining to a few big players, but GPU mining means anyone can mine again – restoring decentralization and independence. GPU mining rewards go to individuals worldwide, instead of mostly to ASIC warehouse owners, recreating network effects that Bitcoin used to have.”
Thus, it seems absolutely clear that this cryptocurrency started out with an admirable objective. Despite stuttering along the way, it has, as we shall find out, been able to impress with some great features. Having said that the issue of whether centralisation has been amply achieved remains a question as 100,000 BTGs were pre-mined by the developers themselves, which makes their centralisation claim slightly dicey. It does put to work an interesting consensus algorithm which we shall explain in the section below.
Bitcoin Gold: How it Works
We know that there are different consensus protocols used in blockchain and that the Bitcoin blockchain uses the Proof of Work (PoW) protocol. Bitcoin uses the SHA-256 variant which uses up a great deal of computational power. Given that Bitcoin has been around for over a decade now, it’s no wonder that its mining difficulty has gone up significantly. Hence miners have to dedicate expensive ASICs and GPUs to be able to mine blocks on that network. Therefore, Bitcoin Gold uses an algorithm called the Equihash PoW algorithm. It does not emphasize upon the need for ASICs. Instead, it uses the RAM space available and optimizes the memory of the node computer accordingly. This helps a great deal in democratization of mining, and makes it accessible to a greater number of people.
Bitcoin Gold As An Investment
Given that Bitcoin Gold has its supply capped at 21 million just like Bitcoin and an active developer community constantly striving to make BTG better, it sounds like a good investment as long you don’t break the bank while at it! Its high security, transparency and objective towards decentralization make it a great addition to your crypto portfolio. One of its many pros is that it is available in a multitude of exchanges so availability will hardly be a problem. Notable examples of exchanges that support BTG include Binance, Bittrex, Huobi, Cex.io etc. So, is Bitcoin Gold a good choice to invest in 2018? Well yes, as long as you make an informed choice and go steady yet slow.