What is Bitcoin Gold (BTG)? A type of cryptocurrency with the underlying platform being Bitcoin. What is BTG?

Bitcoin Gold (BTG) is a separate hard fork from the Bitcoin blockchain at block 491407 on October 25, 2017. The Bitcoin Gold project was launched with the aim of improving Bitcoin technology, changing the way rewards for participating miners are mined. Bitcoin Gold is the second fork of Bitcoin after Bitcoin Cash on August 1, 2017.

The Bitcoin Gold development team wants to solve the mining issues with the PoW algorithm. BTG chose Equihash as the PoW algorithm - a algorithm used in the Zcash network, which is resistant to ASIC. This improvement by BTG will allow regular CPU and GPU users to mine efficiently without the need for expensive specialized mining machines.

What is Bitcoin Gold?

BTG is a type of cryptocurrency based on the fundamental principles of Bitcoin, developed by modifying some existing blocks of the Bitcoin network to achieve decentralized governance. It does not require specific integrated circuits for specialized applications (ASICs) because regular GPUs are sufficient for mining. ASIC miners have exclusivity in mining, but anyone can mine with GPUs, restoring independence and decentralization.

How does Bitcoin Gold work?

The Bitcoin Gold ecosystem operates on the Equihash-BTG proof-of-work (PoW) algorithm, which connects block outputs with empty memory to store, essentially not using ASIC machines. These miners need regular custom modifications to adapt to algorithm updates. Simply put, ASIC machines will become obsolete before reaching their full potential and providing the best return on investment (ROI). Small-scale hardware miners will be prioritized, becoming big winners, making its network and reward system decentralized.

Anonymously, it is similar to Monero, an open-source project managed by a decentralized community of developers. And clearly, it is different from Bitcoin and Ethereum because they disclose transaction details while Bitcoin Gold does not disclose real wallet addresses.

Bitcoin Gold has accelerated transaction processing time faster than Bitcoin by increasing block size and has introduced complete anonymity. To access BTG, users need to connect to the Internet to send and receive tokens. As a digital currency, Bitcoin Gold’s blockchain is in the hands of the council and community members, not banks or the monetary policies of the Central Bank or the Federal Reserve.

However, Bitcoin Gold shares some similarities with Bitcoin. It functions as a type of currency and provides an efficient platform for researching, transacting, and improving cryptocurrencies. It also functions as:

• A means of payment for goods and services
• An investment in the digital asset market
• A mechanism for independent money transfer

After a brief explanation of Bitcoin Gold and how it works, let’s quickly go over its mining requirements.

How is BTG different from BTC?

BTG is a branch of BTC, in addition to the basic points similar to BTC, it also has some differences:

• BTG uses the Equihash algorithm instead of Bitcoin’s PoW, so the BTG coin will primarily be mined using CPUs.
• BTG will protect against repeated attacks.
• BTG will have a different difficulty in mining coins on each block (This is good for GPU mining tools).
• BTG has a pre-mining process of about 1% (equivalent to 160,000 BTG) before the blockchain is made public, and the coins will be distributed to the development team. After this distribution is complete, the development team will release this amount of BTG for users to start trading.

Bitcoin Gold Technology

Bitcoin Gold uses the replay protection mechanism SIGHASH_FORK_ID. It implements a new algorithm to calculate the transaction hash function and provides two-way replay protection. It also invalidates BTC transactions on the BTG blockchain and vice versa.

Equihash Algorithm - a memory-hard algorithm that allows GPU mining and prevents centralized value of currency with smaller groups than wealthy investors. This makes the currency more stable. BTC ASICs can no longer be used for BTG.

Bitcoin Gold uses DigiShield V3, a difficulty adjustment algorithm to track the time elapsed between the nearest block and the median of some previous blocks. It maintains a 10-minute time period between blocks to adjust difficulty.

Features of BTG

Decentralized mining: The PoW algorithm of BTG blockchain is mined in a decentralized manner and limits the use of specialized chips for mining. Users can mine BTG with GPU, making it decentralized in the true sense.

Replay Protection: This protects users from malicious attacks. It prevents duplicate transactions and loss of funds by executing transactions on an invalid chain on different chains.

Protection against major changes: The deviation in total hash power is prevented by the difficulty adjustment algorithm and protection against major changes in hash power.

Unique address format: BTG has changed the address format to avoid confusion with BTC addresses. This prevents unintentional transfer of BTC to BTG addresses and thus prevents loss of funds.

Development team

Jack Liao is the founder of the project. He is the CEO of LightningAsic, a well-known mining equipment company in Hong Kong. Jack had the idea for the project since 07/2017 and immediately received a lot of support from the market, as well as many experienced developers. However, at the present time, Jack has left and handed over this position to the developer H4x3rotab.

Conclusion

Bitcoin has many hard forks and Bitcoin Gold is just one of them. Before BTG was launched, many people predicted that this type of currency would affect the value of BTC. The most distinctive feature of Bitcoin Gold is the expectation of changing the models around mining on the Bitcoin blockchain.

In reality, Bitcoin Gold is a project with good goals, good ideas, and practicality. However, the weakness is that the development team is still quite vague.

You can check the BTG price here.