Bitcoin Gold was created via hard fork on October 24, 2017. The whitepaper states that the main reason for the fork was to make Bitcoin “decentralized again”. The creator of Bitcoin Satoshi Nakamoto envisioned a world in which every CPU was equally important to the network. Times have changed since the introduction of Bitcoin and it has become more difficult to mine Bitcoin, thus making it more expensive to mine Bitcoin. Since the cost to mine Bitcoin has increased the manufacturing and distribution of mining equipment has become dominated by a small amount of entities. The main purpose of Bitcoin gold is to provide a fair opportunity for people across the globe to participate in the mining process with widely available computer hardware that is manufactured and distributed by many wholesale companies such as Nvidia or AMD.
The supply of Bitcoin and Bitcoin Gold are the same at 21 million but there are differences between the coins. Bitcoin uses a SHA256 proof of work algorithm while BTG uses Equihash-BTG. This means that Application Specific Integrates Circuits (ASICs) that can perform SHA256 calculations will be useless for mining BTG, because the algorithms are different. Another difference when mining the cryptocurrencies is the difficulty adjustment. When mining Bitcoin the difficulty of mining adjusts every 2016 blocks which is around two weeks, to keep an average interval of 10 minutes between blocks. Bitcoin Gold adapted a different algorithm referred to as Digi Shield V3. This algorithm resets the difficulty after every block is mined and the median of a set number of preceding blocks. This difficulty is adjusted every block to target a 10-minute block interval. Besides the algorithms and mining specifications, Bitcoin Gold works in the precisely the same way as Bitcoin.
The purpose of Bitcoin Gold was to change the original Bitcoin proof of work algorithm making mining more inclusive. Bitcoin Gold is a wonderful alternative to Bitcoin because it doesn’t use the ever so valuable Bitcoin hash power or claim the “Bitcoin “title. Hash rate is defined as the amount of computing power being contributed to the network or the number of hashes that can be calculated per second. BTG is a token with the same base as Bitcoin that will allow the masses to mine from home and new technologies will be created on its blockchain. Bitcoin Gold is an open-source protocol which allows developers to participate in the governance and development of the blockchain. Bitcoin Gold will have many uses in the future and the real value of the currency has yet to be discovered.
References
Bitcoin Gold Roadmap. https://bitcoingold.org/wp-content/uploads/2017/10/BitcoinGold-Roadmap.pdf.
Bitcoin Gold, 18 May 2021, https://bitcoingold.org/.
Reiff, Nathan. “What Is Bitcoin Gold, Exactly?” Investopedia, Investopedia, 28 Sept. 2021, https://www.investopedia.com/tech/what-bitcoin-gold-exactly/.
