Bitcoin Gold (BTG), a Fork to Decentralize Bitcoin

Bitcoin Gold (BTG) is one of the most controversial Bitcoin forks, which took place in October 2017. The Bitcoin Gold split from the original Bitcoin blockchain occurred on October 24, 2017, at block 491407.

There are a number of reasons why cryptocurrencies undergo a hard fork, ​​including code improvements, differences in vision among developers, or changing objectives. In the case of Bitcoin Gold, the stated purpose of the fork was to “make Bitcoin decentralized again.”

This seems a little redundant at first glance. Wasn’t Bitcoin already decentralized? It has no ties to any government, central bank, or specific country, being essentially a global currency controlled by the community.

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Although all of this is true, the Bitcoin Gold developers were not concerned with Bitcoin’s central issuance. Instead, they expressed concern about the mining process and the rise of ASIC mining operations, which increasingly controlled the hash power of the Bitcoin network.

The Bitcoin Gold developers proposed the fork to switch to the Equihash consensus algorithm and make Bitcoin Gold ASIC-resistant, thereby putting mining hash power back in the hands of ordinary people.

The Bitcoin Gold Mining Process

Bitcoin mining can be profitable, but it is also very resource-intensive. This led miners to decide to pool their resources in centralized mining operations, which host hundreds of very powerful mining rigs and bring immense computing resources to the process.

This means that the average miner, who simply wants to mine from home, has been forced to spend large sums of money building their own super-powerful mining rigs. Those who chose not to do so became unable to participate in the mining process, because their computers simply lacked the computing power to solve a block before professional systems.

One of Bitcoin Gold’s central objectives was to change the mining algorithm and, by doing so, prohibit the use of specialized ASIC mining chips. This prevents large mining operations from dominating the mining process and allows ordinary miners to participate in Bitcoin mining using the computing power of their computers.

The Controversial Launch of Bitcoin Gold

It is worth noting that there was controversy surrounding the launch of Bitcoin Gold, with some calling it nothing more than greed that inspired the fork. This accusation arose after the developers conducted a post-launch premine, retroactively mining the first 8,000 blocks, or 100,000 BTG coins.

It was rumored that these coins went directly into the wallet of Jack Liao, the founder of Bitcoin Gold, but in fact they were set aside as a financial resource for managing and growing the Bitcoin Gold network.

There is nothing unusual about this practice, and many new projects set aside coins to fund their development. Approximately 5,000 pre-mined coins were distributed to members of the founding team as a bonus, and all Bitcoin holders received Bitcoin Gold at a 1:1 ratio, namely one BTG for every BTC held.

Since the BTG code is open-source and publicly available, this statement may have been politically motivated, as the Bitcoin development team supported the future Bitcoin Cash fork.

As of April 30, 2018, Bitcoin Gold had 246 reachable nodes. The highest concentration of nodes was in Germany and the United States, with 41 nodes each, followed by France with 33 nodes, Canada with 15 nodes, and Russia and the Netherlands with 14 nodes each.

In February 2018, Bitcoin Gold launched Bitcoin Gold Insight Explorer, a blockchain explorer for Bitcoin Gold running on a full Bitcoin Gold Bitcore node hosted by the Bitcoin Gold Organization. The explorer was developed through bitpay and supported by SatoshiLabs.

Bitcoin Gold faced further controversy less than a month after its launch, when one of its lead developers was accused of hiding a 0.5% fee in a Bitcoin Gold mining pool. Again, this may have been politically motivated.

The fee was not hidden, since the code was open source. In addition, the fee is much lower than the typical 1-2% fee charged by most mining pools. In hindsight, the team should have announced the fee, but the fact that all of the Bitcoin Gold code was open source partly explains this omission.

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