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What is Bitcoin Gold (BTG) ?

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Cryptocurrency forks of various types now take place on a regular basis. Even bitcoin has experienced several different iterations and branches in this way. One of the largest and most discussed bitcoin forks took place late in 2017.

Bitcoin gold was a hard fork of the original open source cryptocurrency which took place on October 24, 2017. While hard forks take place for a number of reasons – including for the purposes of scaling as a cryptocurrency customer base grows, or because of developer conflict and differences of goals – bitcoin gold’s stated purpose has been to “make bitcoin decentralized again.”

On the surface, the idea of “making bitcoin decentralized again” may seem counterintuitive. Bitcoin, like all other cryptocurrencies, is designed to be decentralized already; it is not linked with any central bank, particularly country, or government body.

One of the major issues with bitcoin which prompted the development of bitcoin gold, however, was not related to the question of central issuance at all. Rather, it had to do with the mining process. Bitcoin gold developers believed that by adopting a new algorithm for the mining process (in this case, a so-called proof-of-work algorithm called Equihash), the new branch of the world’s most popular cryptocurrency by market cap would not disproportionally favor major mining operations.

Democratizing the Mining Process

Bitcoin mining is a lucrative but resource-intensive process. The most profitable mining ventures are often those which pool together a large number of mining rigs, each of which requires expensive, special equipment.

Individuals attempting to mine for bitcoin on their own either have to invest a huge amount of money and time into creating their own rigs, or they get passed by in the process, as their computers are unable to compete with the professional rig systems.

cryptocurrency_mining_farm

One of the primary goals of bitcoin gold has been to change the algorithm by which the cryptocurrency itself is mined, meaning that the mining process cannot be run faster on specialized equipment than it can on standard computer systems.

Bitcoin gold was not the first major hard fork of bitcoin. Bitcoin cash forked off from the primary cryptocurrency in August of 2017.

In 2018, bitcoin is anticipating several additional hard forks, prompting some to speculate that there may be diminishing returns in terms of investor interest as more offshoots of bitcoin reach the market.

Distribution, Protection, Transparency

Besides the goal of “re-decentralizing” bitcoin, bitcoin gold’s developers were also focused on issues relating to distribution, protection, and transparency. “Hard forking bitcoin’s blockchain fairly and efficiently distributes a new digital asset immediately to people all over the world who have interest in cryptocoins,” the bitcoin gold website states.

In the world of virtual currencies, threats from hackers and other malicious entities are constantly a concern. For that reason, bitcoin gold took additional safety and protective measures from the time of its launch, in an effort to help secure its customers’ accounts and coins. These include replay protection and unique wallet addresses.

The fact that bitcoin gold is “a free open-source software project that is built by volunteer developers and supported by a rapidly growing community of bitcoin enthusiasts that stretches around the globe” is also a draw for potential customers.

Bitcoin Gold On Exchanges

For all cryptocurrencies, one of the major factors which helps to determine both short-term and long-term success is its availability on cryptocurrency exchanges. Users must be able to access the cryptocurrency on exchanges in order to make transactions.

According to the bitcoin gold website, as of March 2018, the cryptocurrency was trading live on Bithumb, Bitfinex, Binance, Bittrex, HitBTC, Uphold, YoBit, Gate.io, Changelly, Shapeshift, BitBay, Abucoins, Change Now, Evercoin, Tdax, Bitsane, Bitstarex, QuadrigaCX, Cex.io, Okex, Anybits, BestRate, Bitmarket, Indacoin, CoinSwitch, and Unocoin.

There are additional exchanges slated to offer bitcoin gold in the near future as well. The cryptocurrency is also available through a number of wallet services, including Trezor Wallet, Ledger Wallet, Exodus, Coinomi, Bitpie, Guarda, Freewallet, BTGWallet, and Kasse. According to the website, the cryptocurrency has been listed on 46 markets and 26 exchanges as of January, 2018.

Launch and Controversy

The developers of bitcoin gold used what is called “post-mine” after the launch. This was the retroactive mining of 100,000 coins after the fork already took place. The way that this happened was through the rapid mining of about 8,000 blocks, the results of which were set aside as an “endowment” of sorts, to be used to grow and maintain the broader bitcoin gold network.

About 5% of those 100,000 coins were set aside for each of the six primary team members as a bonus. At the time of the launch, all bitcoin owners received bitcoin gold coins at the rate of one bitcoin gold token per one bitcoin token.

Coinbase, one of the largest cryptocurrency exchanges in the world, was notably skeptical of bitcoin gold at launch time. Coinbase representatives stated that the exchange “cannot support bitcoin gold because its developers have not made the code available to the public for review. This is a major security risk.”

As of March 4, 2018, bitcoin gold has 253 reachable nodes. The highest concentration of nodes is in Germany (46 nodes), with the next-highest levels being the United States (38), France (37), and Russia (18).

In February 2018, bitcoin gold launched the bitcoin gold insight explorer, calling it a “fully functional bitcoin gold insight instance and web application service presenting the Insight UI and Insight API.”

Like most cryptocurrencies, bitcoin gold has had its share of detractors and controversies. Just days after the launch, miners accused one of the developers of bitcoin gold of having added in a 0.5% mining fee that was hidden from the mining community.

The Future of Bitcoin Gold

According to the bitcoin gold website, the cryptocurrency maintains ambitious plans for expansion into the future. In the first quarter of 2018, for instance, the website says its goals including “open source libraries integration” with BitcoinJS, BitcoinJ, and CoPay, as well as “academic and university collaboration” and “design and rebranding,” including a refreshed website.

In the second quarter of 2018, the digital currency aims to integrate a lightning network and decentralized mining through P2Pool. There is also a plan to integrate a debit card program and other payment systems integrations.

By the end of 2018, the cryptocurrency aims to develop “sidechains and cross-chain atomic swaps” as well as a number of meet-ups and developer conferences, university outreach, and more. Looking ahead to 2019, the cryptocurrency has its sights on private transactions and scholarship or research support.

Over the longer term, bitcoin gold will conduct research on smart contracts and blockchain democracy, as well as develop a decentralized fiat-crypto brokerage network.

Bitcoin gold developers are conscious of the connections between this cryptocurrency, its parent bitcoin, and the broader digital currency world. As such, they indicate that “the core improvements we’re working on are all of great interest in the broader bitcoin and crypto worlds, not merely for bitcoin gold.” They said some of these unilaterally applicable improvements may include scalable ways to address hard forks, “smart voting mechanisms,” and decentralized decision-making for the development of the digital currency.

Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.

Bitcoin

Bitcoin’s Mining Costs Will See It Bottom out at $6,000, Traders Argue

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Two well-known traders, Brian Stutland and Jim Iuorio, have recently revealed they believe bitcoin has a major support at the $6,000 thanks to its mining costs, which means it may be the bottom of the cryptocurrency’s downtrend.

Speaking to CNBC, the traders noted that while it may be too expensive for the “average person” to start mining the flagship cryptocurrency, some of the miners will find it difficult to mine profitably if the cryptocurrency falls below the $6,000 mark.

Their comments came shortly after bitcoin lost over $1,000 in a 24-hour period, after reports suggested Goldman Sachs had dropped its plans to open a bitcoin trading desk in the near future and a whale moved over $100 million to cryptocurrency exchanges.

Brian Stutland stated:

It’s going to be difficult [to profit] once we get down to this $6,000 level I think that’ll act as some support there. But look, do we really need Goldman Sachs? The point of cryptocurrency was to get people out of the banking system, and bank and transactions offline from that.

Goldman Sachs’ chief financial officer (CFO), as CryptoGlobe covered, later on revealed the reports were false as the company is still working on “setting up a trading desk to make markets in digital currencies such as bitcoin.” It’s moving into the crypto space in “response to client interest in digital currencies.”

Per Stutland’s words, while the drop created “some selloff” the bottom will be reached a $6,000. Jim Iuorio then noted bitcoin price charts point to a potential bounce if the cryptocurrency manages to go through $6,480.

If bitcoin goes through that level, Iuorio said, the cryptocurrency will “come out of that little consolidation it’s been on” and go up to $6,800. If it fails to do so and trades under $6,300, he added, it’ll fall back to $6,000.

At press time, BTC is trading at $6,470 after rising 1.38% in the last 24-hour period, according to CryptoCompare data. The cryptocurrency seemingly started recovering after reports suggested crypto exchange Coinbase was tapping the expertise of $6 trillion asset manager BlackRock to launch a crypto ETF.

As CryptoGlobe covered adoption has been growing, as billionaire Tilman Fertitta, owner of the NBA basketball team Houston Rockets, recently started accepting bitcoin and bitcoin cash in hos Post Oaks Motor Cars dealership.

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What are Forks and Airdrop in Cryptocurrency?

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The cryptocurrency industry boasts of many technical terms of which most of them need no tedious search to understand them as they are self-explanatory. One of the frequently used terms in the industry is airdrop.

The word combination alone provides a gist of what it really means, however, it may not have a literal meaning as it may be assumed to be. This post identifies and explains two important most-used terms in the industry.

Airdrop

Airdrop does not literally means “drops” fall from the air or the air really drops. It signifies a free distribution of tokens or cryptocurrencies for a specific purpose. In most occasions, cryptocurrency companies decide to reward their early adopters by distributing a proportion of free tokens to them.

In addition, some companies ask interested parties to perform minor tasks, including liking their telegram page, following them on twitter and few other instructions to stand a chance of getting a portion of the distribution.

As this may be a marketing strategy to get more people on board to build a community, this may also be a strategy to evenly distribute tokens in order to avoid market manipulation by large token holders.

Airdrop is very common among the newly introduced coins that need a kind of popularity to rise to the moon.

Forks

Fork in cryptocurrency has a general meaning of dividing or introducing an updated version of an existing cryptocurrency. When inventors realize that an existing cryptocurrency falls short of a particular function, a similar but upgraded version is introduced.

A good example is Bitcoin and Bitcoin cash. Bitcoin gave birth to Bitcoin cash in 2017 after inventors announced on a fork that was intended to make the digital world even better.

Forks are categorized into two; Hard folk and Soft Folk. Hard fork has been explained to be a permanent diversion from an existing Blockchain with the nodes of the new Blockchain not interacting with the transactions of the old one.

Soft Node is quite different. Transactions of the non upgraded nodes are recognized by the new upgraded ones; however, when the non upgraded node mines blocks continuously, the new nodes will reject them.

In this case, enough hash power is needed to make it succeed. It is believed that the existence of a fork makes the future of cryptocurrency very bright. Possibility of a fork can address so many problems in the cryptocurrency industry.

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What Next For Ethereum (ETH)?

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Ethereum (ETH) has had a rough week in the crypto markets. On the 5th of September, right before the whole market lost close to $40 Billion in a day, ETH was valued at $280 and seemed to have considerable support at that level. Then the news hit that Goldman Sachs have decided not to proceed with plans for a Bitcoin (BTC) and Crypto trading desk. The entire market tanked. ETH fell in the markets to current levels of $219 as the news about Goldman Sachs have since been declared as fake news.

Fears of Further Decline and ICO’s Dumping ETH in the Markets

The Ethereum HODLers in the crypto community are concerned that ETH will continue falling to levels well below $200.The last time ETH went below this levels was back in mid September when it was valued briefly at $195.

With the constant rumors that ICOs are selling the ETH they raised last year and early this year to avoid further losses, the concern still lingers of the possibility of the digital asset continuing to depreciate in value. Although this claims have not been confirmed, the theory is plausible given the tonnes of crypto that was poured into ICOs from late last year to date.

Will it Go To Zero?

The extreme side of events is that ETH will plummet to zero as everyone ditches the digital asset for more stabler coins such as Stellar (XLM). There is also the theory that ETH can be replaced as the preferred ‘gas’ payment on the Ethereum network thus making the digital asset obsolete. However, the Ethereum community would not agree to such a radical overhaul of the network’s operations.

A Call for a New Ethereum Network

This then leads to a new discussion that the Ethereum network needs to evolve with the times or risk being obsolete as more efficient networks are created. These include the likes of Tron (TRX), Zilliqa (ZIL) and Neo (NEO). Of particular concern are the security vulnerabilities in Ethereum smart contracts as well as the network having congestion issues that need to be solved by increasing its throughput.

Waiting It Out

The good thing is that ETH still has fans and HODLers who are willing to wait out the current storm in the form of a bear market. There are also high hopes that the scalability issues on the network will be solved very soon further injecting the much needed life into the digital asset.

In conclusion, the digital asset of ETH is facing some trying times in the crypto markets as it has dropped 85% since its peak value of $1,400. With the bear market still in full force at the moment of writing this, there is some fear that its value could drop further. However, the long term future of ETH is still bright if its network can evolve with the times.

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