You may already be aware of Bitcoin mining and how it works – PoW. However, the complexity of the blockchain and the computation power has increased so much that only few miners and mining pools are able to carry it out. This creates a problem in that, the Bitcoin currency is at risk of being centralized.
In 2017, Bitcoin forked again to create BTG or Bitcoin Gold as a solution to this very real problem.
So, what is Bitcoin Gold?
Just like Bitcoin, BTG is an open-source cryptocurrency created in October 2017. However, both these blockchains are not compatible as this was created as a result of a hard fork.
However, the advantage of the hard fork is that BTC holders receive an equivalent amount of BTG. Therefore, the BTG to BTC ratio would be 1:1
How does BTG solve Bitcoin’s mining issues?
BTG claims to make Bitcoin decentralized again. The mining algorithm has become increasingly difficult for an individual to carry out and requires tons of energy and can only be carried out in countries like China where electricity is still cheap. So does this mean that Bitcoin gold mining will not be as energy intensive? BTG mining relies on a new algorithm – Equihash algorithm.
What is the Equihash algorithm?
To understand this, you must first get an idea of how Bitcoin’s SHA-256 PoW works. Miners compete to solve computational algorithms and the miner who is able to find the correct answer first is rewarded with some BTC. But with time, the PoW has proved to be increasingly difficult and require expensive ASIC mining hardware, high computational power and tons of electricity.
To resolve this issue, BTG has resorted back to only allowing GPUs or advanced graphic cards the functionality to mine. The Equihash algorithm was developed by the University of Luxembourg in 2016 and is memory oriented.
ZCash is another crypto currency to have adopted this PoW algorithm.
Who is behind BTG?
BTG’s co-founders – Jack Liao, Robert Kuhne, Alejandro Regojo, Franco Niebles, and Martin Kuvandzhiev – are quite active on social media. The lead developer “h4x3rotab” is supposedly from China but has not been identified.
Bitcoin Gold Price: Is it time to retire your Bitcoin wallet?
BTG is currently the 32th largest cryptocurrency but that does not mean you should consider it among best Bitcoin wallet because Bitcoin is still king. There are 17.1 million BTG currently in circulation with a market cap of $499,719,343. However, the price of BTG has dropped since and may not be an ideal investment for you just yet.
But, given how complex Bitcoin mining will get, BTG may have a second chance in the coming years.
Where can you buy BTG?
Bitcoin Gold is avaialble on several crypto currency exchanges but is usually offered in pairs. Some exchanges like Bitfinex, YoBit and Exmo allow you to buy BTG using a fiat currency. Store BTG in a specific BTG wallet and off the crypto currency exchanges.