Countdown to Bitcoin Gold Is On Despite Community Skepticism
In just a few days, an alternative version of bitcoin will come into existence via the increasingly common ‘hard fork’ process. Bitcoin Gold, or BTG, aims to democratize the blockchain’s lucrative mining infrastructure by taking it out of the hands of big companies.
Hard Fork Coming
The term ‘hard fork’ has become part of blockchain vernacular following the launch of bitcoin cash Aug. 1. Despite its struggles, the alternative version of bitcoin has created billions of dollar in market value. Backers of Bitcoin Gold are hoping for a similar fate.
By pursuing a hard fork, BTG’s developers seek to transform how mining works by eliminating ASICs – the powerful machines developed solely for minting bitcoin. Eliminating ASIC miners will attract more people to the system, thus democratizing the mining process.
The project, which is being led by Jack Liao of the Hong Kong-based LightningASIC, will launch on block 491,407. Based on current mining activity, that is expected to occur Wednesday.
However, blockchain experts are quick to remind that BTG isn’t your typical fork. For starters, the newly minted currency will be created in advance of the launch. Roughly 1% of the tokens mined before the public launch will be used to pay BTG’s development team.
These characteristics have led some analysts to issue a warning over the legitimacy Bitcoin Gold. Bitcoin Gold’s development team has already mined tens of thousands of tokens, raising eyebrows about whether this is just a get-rich-quick scheme.
That being said, the official BTG website says the new coin will provide:
- fair distribution
- replay protection
Accessing Bitcoin Gold
If you currently own bitcoin, you will receive an equivalent amount of BTG tokens after the fork – that is, if your broker participates. Japan’s bitFlyer marketplace has already announced it will support the Bitcoin Gold process. The broker issued the following statement on Saturday:
We will credit you with an amount of BTG corresponding to the amount of Bitcoin (BTC) in your bitFlyer account prior to the split. If the BTG split is deemed by bitFlyer to be permanent and secure in regards to customer assets, you will be able to own both BTC and BTG in your bitFlyer account.
In other words, the amount of BTG distributed to bitFlyer account holders will be based on the amount of BTG held in their corresponding account at the time of the chain split.
Some notable exchanges, such as U.S.-based Coinbase, have indicated they will not support the new protocol. This leaves traders with the task of moving over their bitcoin to a wallet that supports the BTG protocol.
Given the red flags surrounding Bitcoin Gold, it’s hard to say how the blockchain community will react come Wednesday. The project states on its website that some 20 exchanges and wallet platforms have already promised to support the new protocol.
Bitcoin Gold is emerging at a time of great opportunity in the cryptocurrency market. The original bitcoin token climbed above $6,000 last week for the first time ever, bringing its total market cap well north of $100 billion. Digital currency is by far the world’s best-performing asset class, dwarfing the stock market’s bullish gains over the past ten months.
Featured image courtesy of Shutterstock.