Showing posts with label Bitcoin Gold. Show all posts
Showing posts with label Bitcoin Gold. Show all posts

November 24, 2017

Bitcoin price holds above $8,250 despite Ethereum, Bitcoin Cash surges

By Josiah Wilmoth - November 24, 2017 (www.cryptocoinsnews.com)


The Thanksgiving leftovers have been neatly packaged and stored away in refrigerators across the U.S., but investors will not be receiving any Black Friday discounts in the cryptocurrency markets this year. The three largest cryptocurrencies advanced in unison today, with the bitcoin price holding above $8,250 even as ethereum and bitcoin cash raced past significant milestones.

Source: CoinMarketCap

Against this backdrop, the total cryptocurrency market cap extended its record-setting streak. Having surged past $250 billion for the first time the previous day, the crypto market cap added more than $5 billion on Friday, bringing its new total to a present value of $258.7 billion.

Source: CoinMarketCap

Bitcoin Price Weathers the Storm


Ever since the post-SegWit2x cancellation bitcoin cash pump, there have been rumors that BCH advocates would mount another rally — perhaps on November 23, when U.S. investors and traders would be less active in the markets due to the Thanksgiving holiday. That theory was proved correct, though not to the degree that many expected.

The bitcoin cash price climbed nearly $600 — from $1,200 on Wednesday to $1,800 on Thursday — before pulling back to a present value of $1,658. This nevertheless represents an eight percent day-over-day increase and brings the BCH market cap to $27.9 billion.

Bitcoin Cash Price Chart | Source: CoinMarketCap

However, contrary to the last bitcoin cash pump, this one did not come at the expense of bitcoin. The bitcoin price did give investors a brief scare by temporarily falling below the $8,000 mark, but it quickly recovered and actually tested its all-time high on several exchanges.

Bitcoin Price Chart | Source: CoinMarketCap

At present, the bitcoin price is trading at a global average of $8,260, which translates into a $137.9 billion market cap.

Ethereum Price Reaches Record $420


Bitcoin’s resilience is even more impressive given that bitcoin cash was not the only top-tier cryptocurrency that threatened to funnel capital away from bitcoin to fuel its own surge. The ethereum price mounted a rally of its own, punching through the $400 level for the first time since June. The ethereum price ultimately rose as high as $425 — a new all-time high — and is currently trading just below that level, at $420.

Ethereum Price Chart | Source: CoinMarketCap

Ethereum now has a market cap of $40.3 billion, giving it a $12.4 billion edge on bitcoin cash.

Other Markets Take a Holiday


The remainder of the top 10 was surprisingly quiet on Friday, with four cryptocurrencies moving less than one percent and just one venturing past the two percent marker.

Source: CoinMarketCap

That asset was IOTA, whose price plummeted by 18 percent following an extended — if uneven — rally. The IOTA price is now $0.734, which translates into a market cap just above $2 billion and drops IOTA to ninth in the market cap rankings.

Posted by Josiah Wilmoth
Josiah is a former ancient and medieval literature teacher. He has been writing about cryptocurrency since 2014, and his work has been cited in Business Insider, NPR, and Yahoo! Finance. He lives in rural North Carolina with his wife and son. Email him directly at josiah.wilmoth(at)cryptocoinsnews.com.

November 23, 2017

Scammed Bitcoin Gold wallet named ‘MyBTGWallet’ stole $3M from users

By Bhushan Akolkar - November 23, 2017 (www.coinspeaker.com)

An alleged Fraudulent Wallet appearing on the Bitcoin Wallet is said to have stolen $3.3 million worth of cryptocurrency holdings of users.

After being initialized through the second hard fork in the Bitcoin network, Bitcoin Gold (BTG) the second derivative of Bitcoin had to go through a bumpy ride initially with its website being a victim of DDoS attacks. The Bitcoin derivate is yet again in news for an alleged scam that is suspected to have stolen $3.3 million from Bitcoin users. The theft is said to have been done by the operators of mybtgwallet.com while falsely asking users to claim the bitcoin gold and traping them in a malicious scheme.

The scheme asked users to submit their private keys as a requirement to generate bitcoin gold wallets. All the users who agreed to this proposal soon became victims of the fraud as all the cryptocurrency holdings in their wallet were sent to a different address. The development team has said that they are investigating the matter and are working with different security experts.

The BTG team explained “When we receive verifiable reports that a website or app is a problem, we removed it from our site. Preliminary investigations indicated that at least some of the claims of theft by the mybtgwallet site are reliable — Like all third-party sites, that site was not in our control, but we immediately removed it from our pages and the team is working with security experts to get to the bottom of this issue — It appears the mybtgwallet online wallet site was modified by unknown parties long after it was originally published.”

In addition to this, Bitcoin Gold has been through an interesting recovery in the past week. Last week, Satoshi Labs – a cryptocurrency hardware wallet manufacturer and the maker of Trezor, announced that Trezor will integrate BTG into its wallet. Following this news, there has been a fresh cash flow and increase in market liquidity as the BTG prices have increased by 100% from $150 to above $300. According to CoinMarketCap, BTG is currently trading at $279.47.

This sudden and huge surge in the price of BTG is said to be coming in the wake of the announcement by Satoshi Labs that Trezor’s beta wallet will allow its customer to retrieve BTG coins. A step-by-step process to claim BTG is listed in a blog post by Satoshi Labs. Users are requested to upgrade their firmware to 1.6.0 and to use the company’s beta wallet. The company explained: “For the time being, your Bitcoin Gold wallet will only be accessible from the Trezor beta Wallet. Bitcoin Gold is not Bitcoin — It merely uses bitcoin’s history similarly to the case of Bitcoin Cash — This process will not affect your Bitcoin wallet at all.”

Just after Bitcoin Gold went live on November 12 earlier this month, there are many cryptocurrency wallet-players who have extended support for BTG after realizing that there is a lot of community interest for the latest Bitcoin derivative. One such cryptocurrency mobile wallet ‘Freewallet’ has launched its first dedicated wallet for BTG. The Android version of the wallet is already available on Google Play Store where the iOS version on AppStore is awaiting approval and is expected to launch next week.

Freewallet co-founder, Alvin Hagg, while announcing this on his website, stated: “That’s the second Bitcoin chain split we’ve supported. And Freewallet managed to provide uninterrupted operations during both of them! When a new cryptocurrency is born and a new network is launched, it means there’s a great opportunity for our users to get free coins and instant profits. And Freewallet’s mission is to make sure they are happy because that’s what makes us happy, too.”

October 28, 2017

How Bitcoin forks influence Bitcoin price rise and fall

By Patrick Thompson - October 28, 2017 (cointelegraph.com)


Prior to the Bitcoin Gold fork two days ago, the market made some interesting moves.

Bitcoin price reached a new all time high on Oct. 20, 2017 - five days before the Bitcoin Gold fork -surpassing $6,000 for the first time and eventually climbing to nearly $6,200.

Those of you who have endured past chain splits are aware of what usually happens when there’s a split from the Bitcoin network. Ordinarily, the community complains, reddit.com, medium.com, and twitter.com become platforms for soapbox speeches, and a lot of trash is talked by factions within the community.

However, have you noticed the other events that are correlated with a chain split? Once a chain splits, you suddenly own a number of split tokens equivalent to the number of tokens you had on the Bitcoin network. This is because the new chain will be an exact copy of the Bitcoin Blockchain up until the point where the fork occurs.

If the wallet you use supports the forked chain’s software, you will be the owner of two digital tokens: Bitcoin and the Forked Chain Token. In our example we will use Bitcoin Cash (BCH) as the forked token. When the Bitcoin Cash chain forked off of the main chain, owners of Bitcoin became owners of an equivalent amount of Bitcoin Cash. This is because the chains were identical until the fork occurred. If you owned 10 BTC before the split, then you owned 10 BTC and 10 BCH after the split. 

This is where the slope becomes slippery.  People or organizations with unfathomable amounts of money can use forks as an opportunity to extort both the Bitcoin network and the forked network for enticing capital gains when a fork occurs.

Preparing for the fork


Let's say Randy owns 35,000 Bitcoins; at a value of $5,000 per Bitcoin, Randy’s digital assets are worth $175,000,000. Just like anybody with large amounts of money invested in a market, Randy pays attention to news that may affect his position (wealth) in that market. Randy learns that there will be a hardfork in the Bitcoin network and that the hardfork will create a new token, Bitcoin Cash (BCH).

On top of this, Randy learns that his Bitcoin wallet provider will support the forked software, so he knows that he will own Bitcoin Cash as well as Bitcoin once the fork occurs. Now, Randy expects to have 35,000 Bitcoin Cash tokens in addition to his 35,000 BTC after the fork.  If Randy was to increase his position by millions of USD worth of Bitcoin, he would be the owner of more Bitcoin than he previously owned.

However, he would also create a buy wall that drives the Bitcoin price up since he is such a large player in the Bitcoin market. When Randy increases the amount of Bitcoin he owns, he also increases the amount of Bitcoin Cash he will own once the fork occurs.

Because Randy is an educated investor, Randy decides to increase his position in Bitcoin so that he owns 50,000 Bitcoin the day before the fork. Randy did this because he would like to own even more Bitcoin Cash than the 35,000 he would have had if he did not increase his position in Bitcoin. Now when the fork occurs, Randy expects to have 50,000 BCH in addition to his 50,000 BTC.

What happens when a chain forks


When the Bitcoin Network forks, some of the value that was in the Bitcoin network splits into the forked chain. When Bitcoin Cash forked from the Bitcoin network, the value of Bitcoin went from $2800 to $2700 (July 23,2017).

As a result of the fork, Bitcoin Cash was created and was valued around $555 at the time of it’s launch. (July 23, 2017).




Now what does that mean for Randy?


When Bitcoin dropped from $2,800 to $2,700, Randy's digital assets (wealth in Bitcoin)  dropped from $140,000,000 to $135,000,000, a $5 mln loss. However, because of the fork, Randy now has 50,000 BCH worth $555 a piece. Because Randy is an educated investor and has no plans to use the Bitcoin Cash (BCH), he immediately sells his BCH for a profit the moment the option to sell BCH becomes available to him on his preferred exchange.

Randy sells all 50,000 of his BCH for a profit of $27,750,000. A nice $28 mln gain (rounded number) to make up for the $5 mln loss that he suffered due to the decline in the price of Bitcoin. At the end of the day, Randy profits around $23,000,000 from the chain split.

Keep in mind, there are other investors like Randy who are highly educated and extremely skilled at what they do. Furthermore, they may be executing a similar or even more efficient strategy as Randy regarding the hardfork; buy a lot of Bitcoin, anticipate a chain split where you are left with a number of new altcoins equivalent to the number of Bitcoin you own, quickly sell off the altcoin for a profit and then decrease your position in Bitcoin because it is overvalued.

Individuals like Randy are referred to as whales: individuals who hold positions so large in the Bitcoin market, that their bid and ask orders are capable of shaking up the market. Since it only takes a few big players using a similar strategy to drive the value of Bitcoin up or down, when an opportunity like this presents itself (a hardfork), the price of Bitcoin may not reflect the true value of Bitcoin.

Since educated investors know that the Bitcoin price may be artificially high due to big players like themselves implementing a hardfork strategy, the big investor(s) have an incentive to lower their position in Bitcoin once they have executed their hard-fork gameplan. This is because they expect the Bitcoin price to correct to a value that is closer to its true value once all the hard-fork affiliated nonsense subsides.

Because there are multiple people like Randy who have a relatively large position in the Bitcoin market, when these people decrease their position in Bitcoin to an amount that they are comfortable owning during a bear period (and that number may be zero) their collective ask offers are capable of creating a sell-wall that drives down the price of Bitcoin.

After the big sell off of both the altcoin - because investors find it virtually worthless for them to hold for the long term - and Bitcoin - because investors know the price is artificially high for the short term due to their market strategy - investors capitalize on the low price of Bitcoin from the massive sell-wall and they buy back the Bitcoin that they previously unloaded.

On top of the profit investors make from selling-off all of their altcoin, investors will experience capital gains from selling their Bitcoin at an artificially high price and then purchasing Bitcoin back once the price is lower. During the period where investors buy back Bitcoin, we tend to see the price stabilize for a short period of time.

Boom and bust


Investors may have stockpiled Bitcoin anticipating an equal amount of altcoin and then sold off a significant amount of both Bitcoin and altcoin - in our example Bitcoin Cash - to reap the massive capital gains available to them.

I can’t rule out the possibility that several other market factors had an effect on the Bitcoin price surge and subsequent plummet, but that being said, how plausible do you think it is that the whales set off the surge and fall of Bitcoin?

October 25, 2017

Bitcoin price struggles to recover beyond $5,500; Bitcoin Gold lacks community support

By Joseph Young - October 25, 2017 (www.cryptocoinsnews.com)


For the past two days, the bitcoin price has struggled to recover beyond $5,500, after surging above $6,000. Analysts have attributed to the recent decline in the price of bitcoin to the upcoming Bitcoin Gold hard fork, and the lack of support from the community.


Earlier today, on October 25, the price of bitcoin dipped below $5,400, dropping to $5,365. Since then, within a relatively short period, the price of bitcoin has rebounded to $5,500, but still, due to the Bitcoin Gold fork that is set to occur prior to the SegWit2x hard fork on November 16, the bitcoin price will likely remain in the $5,500 region, at least until the Bitcoin Gold development team adds strong replay protection.

Bitcoin Gold and its Negative Impact on Bitcoin Price


The Bitcoin Gold hard fork was abruptly introduced by Chinese miner Jack Liao earlier this month. Essentially, the long-term vision of Liao and the Bitcoin Gold team is to close the gap between ASIC mining and GPU / CPU mining, to decentralize the mining industry.


But, the bitcoin and cryptocurrency community criticized the BItcoin Gold hard fork, primarily because of its unoriginal and impractical idea, and also due to its plans to premine the cryptocurrency. In the cryptocurrency market, the concept of premining a cryptocurrency before its launch is not welcomed by investors, traders, users, and developers, because it leads to a centralization of funds and supply before the launch. Major cryptocurrencies like Dash were criticized for that reason in the past.

Additionally, the community has been fundamentally opposed to the Bitcoin Gold fork considering its lack of replay protection. Without it, bitcoin investors and holders prior to the fork will not be able to receive Bitcoin Gold in a 1:1 ratio, as it would danger existing bitcoins. As the Trezor development team explained:

“Bitcoin Gold’s codebase is, at the moment of the writing, incomplete. Most importantly, it lacks replay protection. For this reason, TREZOR Wallet will not support Bitcoin Gold yet, as it would endanger your bitcoins.  As Bitcoin Gold is a fork of Bitcoin, the transaction format, the signatures, etc. are the same. A transaction on one chain could be copied to the other chain and will be valid, possibly leading to unintended loss of coins.”

Consequently, as highly regarded bitcoin developer Jimmy Song explained, bitcoin investors have started to sell their holdings and temporarily move on to alternative cryptocurrencies (altcoins) to avoid the Bitcoin Gold hard fork.


Short-Term Price Trend


The Bitcoin Gold development team has announced that they intend to integrate strong replay protection prior to its hard fork. But, as leading cryptocurrency exchanges such as Bittrex noted, the codebase itself is not ready, and most of the Bitcoin Gold codebase has not been tested and audited.

Unless the Bitcoin Gold development team adds replay protection in the upcoming days, the price of bitcoin will likely suffer as a direct result. While analysts like Tuur Demeester predicted a similar trend with SegWit2x in mid-November, since SegWit2x has replay protection, it is likely that a sell-off will not occur.

Featured image from Shutterstock.

October 24, 2017

Bitcoin Gold - A chaotic first day

By Christine Masters - October 24, 2017 (cryptovest.com)

Bitcoin Gold forked- and met with nothing but problems. A DDOS attack stopped the site, and users flooded one of the main developers with hard questioning, as developer StarbuckBG revealed his identity.


Bitcoin Gold forked today- but did not launch. And that was only the first issue that came with this chaotic, strange hard fork. 

In a few hours, discontent mounted on the Slack channel, mostly pertaining to the pre-mine of 100,000 Bitcoin Gold coins. And soon after that, a DDOS attack was launched against the site, which the team admitted was not protected well enough. 

One of the developers of the project, known as StarbuckBG on GitHub, came out with his name, Martin Kuvandzhiev. It turns out he is a rather prominent member of the Bulgarian tech community, currently also working as lead iOS developer for Phyre. Per the GitHub comments thread, he has been actively working on the project in the past couple of weeks. 


Mr. Kuvandzhiev is also an instructor at the Software University in Sofia. And he is one of the few named developers to be linked to Bitcoin Gold. So far, the lack of a public team has made some exchanges to doubt the whole project.

The other issue was the timely creation of a replay protection module- with a 200 Bitcoin Gold coins bounty offered. Currently, the project only has a non-working version and they say they would complete it soon. Also, no wallet is available. It turns out that even the test network, or the main net have not been created- so after the fork, there is not even test mining, as promised. A user suggested a bounty of 650 Bitcoin Gold for creating a main net, which starts to look like trolling GitHub. 

And it is precisely this approach that is worrying- a project paying in still non-existent coins to anyone who would move in and actually build the project. 

But some exchanges have already offered a pricing mechanism by trading an instrument related to Bitcoin Gold, although no actual coins are currently held. 

The Korean exchange CoinNest was one of the first to list the altcoin, though coming with warnings. Indeed, beyond StarbuckBG(Mr. Kuvandzhiev), there is no information of who is the main developer. 



In a few hours of trading, the price fell more than 40% to 256,000 Korean Won, or around $226. 

Bitfinex is also among the exchanges trading a coin that has no actual live blockchain yet. And YoBit trades an instrument related to Bitcoin Gold, currently at a price range of 0.07-0.1BTC. 




Christine Masters

Business writer with a knack for bubbles and market madness. Has tracked it all: the financial crisis of 2008 and the implosion of Lehman Brothers; bank bailouts and peak gold and silver, penny stocks...and now Christine has moved to cryptocurrencies for fresh stories.

October 22, 2017

Seven Japanese Bitcoin exchanges announce Bitcoin Gold hard fork plans

By Kevin Helms - October 22, 2017 (news.bitcoin.com)


Seven of Japan’s leading bitcoin exchanges have announced their policies regarding the planned Bitcoin Gold hard fork of the Bitcoin network. The country’s largest exchange, Bitflyer, plans to distribute and trade the new cryptocurrency. Some exchanges will only distribute the coins, while others are taking a wait-and-see approach.

Bitcoin Gold Hard Fork


The Bitcoin Gold hard fork of the Bitcoin blockchain is expected to take place at block 491,407, which will likely occur on October 25. A new cryptocurrency, bitcoin gold, is expected to emerge from the fork. Over the past few days, major Japanese bitcoin exchanges have announced their plans regarding this hard fork and how they intend to deal with the new cryptocurrency.

Bitflyer


Japan’s largest bitcoin exchange by volume, Bitflyer, announced on Saturday that its customers will be credited with an amount of bitcoin gold corresponding to the amount of bitcoin in their accounts prior to the split. No suspension of service is scheduled. The exchange wrote:

"If the BTG [Bitcoin Gold] split is deemed by Bitflyer to be permanent and secure in regards to customer assets, on November 1 (tentative), users will be credited with BTG and purchase and sale of BTG will be made available on Bitflyer".

In addition, the exchange detailed “after sufficient observation of the stability in the BTG chain after the split, BTG deposit and withdrawal services will be made available on Bitflyer.”

Coincheck


Coincheck announced its plans for the Bitcoin Gold hard fork on Thursday. “We are planning to provide bitcoin gold if a Bitcoin Gold split occurs,” the exchange wrote. However, Coincheck explained that there are circumstances where it may not be able to provide the new cryptocurrency, including a lack of adequate replay protection, miner hashpower, or protection from other vulnerabilities. In addition, the coins will not be made available if Coincheck decides that the “listing of bitcoin gold is inappropriate.” Currently, no service suspension has been planned. The exchange wrote:

"We are planning to distribute bitcoin gold after we confirmed its security and stability. We haven’t determined the specific date and time yet".

Bitpoint


Bitpoint announced on Friday that “bitcoin gold will be given to customers according to the number of coins [they] held at the time of the split.” However, this can be delayed if the new blockchain is unstable or there is a risk of replay attacks, the exchange conveyed. No service suspension has been planned. Bitpoint added:

"Regarding the withdrawal and deposit services and the buying and selling of the newly generated bitcoin gold, since the security design of the newly formed blockchain has not been sufficiently confirmed, its handling is undecided at this stage".

GMO Coin


GMO Coin announced on Saturday that bitcoin gold will be granted to customers, but the timing has not been decided. In addition, the exchange will temporarily suspend bitcoin deposits and withdrawals around 20:00 on October 25. Furthermore, GMO Coin stated:

"There are no plans to offer services such as buying and selling of bitcoin gold".

Exchanges With No Plans to Distribute


Some exchanges have decided to take a wait-and-see approach.

Zaif


Tech Bureau’s Zaif exchange announced on Friday that “we have decided not to grant [access to] BTG, [including] deposits, withdrawals, and transactions at this time.” However, it added that “when all the possibilities of concerns have been resolved, the handling of BTG will be considered at our discretion just like other currencies.”

Furthermore, Zaif stated that it will neither move the new cryptocurrency nor exchange it for other currencies “for purposes other than storage.”

Fisco


Fisco made a similar announcement on Saturday that “we are not planning to grant, deposit, withdraw, or trade bitcoin gold (BTG) at this time.” In addition, the exchange warned that “there is a possibility of suspending the deposits and withdrawals of bitcoins (BTC) around October 25, 2017, when the split is expected (in that case we will announce again).”

Bitbank


Bitbank announced on Thursday that it will not initially grant bitcoin gold to customers, for several reasons including the incomplete state of Bitcoin Gold’s code. However, the company will take a snapshot of customer assets at the time of the split. The exchange also stated the situation may be “reviewed in the future.”

Images courtesy of Shutterstock, Bitcoin Gold, Bitflyer, Coincheck, Bitpoint, GMO, Zaif, Fisco, and Bitbank.


Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

October 11, 2017

Bitcoin Gold is about to trial an ASIC-resistant Bitcoin fork

By Aaron van Wirdum, Staff Writer - October 13, 2017 (bitcoinmagazine.com)

It’s forking season.

After Bitcoin Cash (Bcash) forked from the Bitcoin blockchain to create a new cryptocurrency (BCH), and ahead of the SegWit2X fork that may do the same thing, a third Bitcoin fork is in the making: Bitcoin Gold (Bgold; BTG). But where Bcash and SegWit2X are scaling-related forks — both mainly increase Bitcoin's block size limit — Bgold wants to re-decentralize mining by implementing a new proof-of-work algorithm.


“What was born as decentralized is now centralized,” Bitcoin Gold contributor J. Alejandro Regojo told Bitcoin Magazine, referring to the current state of Bitcoin mining. “With this fork, we want to show how Bitcoin can be as ‘Satoshi’ as possible, as social as possible, and as decentralized as possible.”

Mining Centralization


Bitcoin Gold was initiated by Jack Liao, CEO of Hong Kong–based mining hardware producer LightningASIC, and was first announced in late August. The open project has been gaining traction and support in the wider cryptocurrency space since, with a dedicated Slack as a main hub for discussion and organization. Bgold is currently being developed by the pseudonymous developer “h4x3rotab” along with a small group of volunteers contributing to the project in other ways.

The attention Bgold has attracted is probably in part because anyone who owns bitcoin (BTC) on October 25th will receive the equivalent amount of BTG. While this model has been criticized, particularly because it presents a burden on service providers and users, it has also proven successful. With the launch of Bitcoin Cash in particular, users eagerly accepted their batch of “free money,” while exchanges, wallets and other service providers proved relatively willing to integrate the new coin.

Further, the Bgold team believes that this distribution method should also benefit Bitcoin over altcoins as it provides an extra incentive to hold BTC on particular dates.

“But the key goal that we are trying to achieve with this fork is to build a perpetually ASIC-resistant version of Bitcoin,” said Robert Kuhne, another Bitcoin Gold contributor, in explaining the purpose of the project to Bitcoin Magazine.

Bgold contributors like Regojo and Kuhne think that Bitcoin’s proof-of-work hashing algorithm was essentially broken by the introduction of specialized ASIC (application-specific integrated circuit) mining hardware. In the early years of Bitcoin’s existence, individual users were often also miners; this has since become concentrated into relatively centralized data centers operated by professionals.

“And we’re now in a situation where 65 percent of hash power comes from a country that doesn’t like Bitcoin,” Regojo noted, referring to China’s recent clamp down on cryptocurrencies.

An Uneven Playing Field


And while mining is centralized, ASIC production is even more centralized, the Bgold contributors pointed out. Only a handful of companies currently produce such specialized chips.

This means that anyone who wants to be a miner in any meaningful way is beholden to these companies, Kuhne argued.

“The way the monopoly manufacturer currently operates is abusive to its customers — individual miners — and the industry at large,” he said, referring to major Chinese ASIC producer Bitmain. “Manufacturers can produce ASICs at a tiny cost, but miners have to buy at a high price. This violates the one-CPU-one-vote ethos as described in the Bitcoin white paper, because while everyone can buy CPU at the same price, the same is not true for ASIC hardware.”

Regojo and Kuhne see this as a fundamental problem — not something that free market dynamics can realistically resolve. They suggest that the barrier of entry to the ASIC market to compete with existing manufacturers is fundamentally too high to allow for open competition.

“You can't build a factory without approval from the government and banking system. So there are really only a handful of entities in the world that have total authority over who can and can't manufacture ASIC machines. And all this could potentially get much worse if and when those institution really start feeling the disruption from Bitcoin, which hasn't begun in earnest yet,” Kuhne said.

Bitcoin Gold


As opposed to the Bitcoin Cash and (especially) the upcoming SegWit2X forks, Bitcoin Gold very specifically does not make a claim to be the “real” Bitcoin. Instead, the Bgold project hopes it can prove a valuable exercise for Bitcoin; a sort of test case for a hard fork that Bitcoin itself may one day require.

Concretely, Bitcoin Gold is now implementing the Equihash proof-of-work algorithm. This is already used by Zcash and is relatively ASIC-resistant.

Full ASIC-resistance, however, is thought to be impossible: Any mining algorithm could be subject to specialized chips. Like Vertcoin, the Bgold community therefore plans to re-deploy a new proof-of-work algorithm hard fork if it is found out that ASIC-chips for Equihash are being produced. (This plan alone, of course, could be a deterrent for any potential ASIC-producer.)

For security, the project plans to implement strong replay protection to avoid loss of funds for unsuspecting or non-technical users. It will also adopt a new difficulty re-target algorithm to prevent the blockchain from stalling: Difficulty is re-adjusted at every block instead of once every two weeks.

While the coin is set to launch two weeks from now, the Bgold codebase is not yet fully developed and ready to be deployed. Implementation of the new proof-of-work algorithm and replay protection, as well as the new difficulty re-adjustment scheme, are yet to be finished.

Nor are all the details for the project even ironed out.

Early announcements indicated that Bitcoin Gold would have a closed launch and a presale of coins. A new batch of BTG was to be mined in the first week after the fork and subsequently distributed to designated investors, not unlike an ICO. Proceeds of this “ICO” were then to be used for development and other Bgold-related purposes.

However, as interest in the project grew, this idea became more controversial. Not everyone involved with Bitcoin Gold likes the idea of an additional founders reward — something Bcash, for example, did not have.

Kuhne addressed the issue by stating: “We have heard a lot of feedback from the community, so this proposal will be replaced with an updated and improved plan. But we will not completely rule out the possibility of a modest pre-mine to provide a basic level of funding for the project.”

Disclaimer: The author of this article holds BTC and will therefore also own BTG at launch.