Background

Bitcoin blockchain is set to hard fork and create a new cryptocurrency called bitcoin gold. This fork will take place on 25Oct17. Existing bitcoin holder will be credited with the same amount of Bitcoin Gold on 1Nov17

This fork is led by Jack Liao, The CEO of Hong Kong mining manufacturer LightningAsic with other parties involved including Chinese mining tycoon and owner of Bitcoin news portal Jinse.com and the project’s anonymous lead developer H4x3.

Main changes to bitcoin gold Change of ASIC to Equihash algorithm, making it ASIC resistant. They are mentioning, this is done in an attempt to allow GPU mining and made the mining more decentralized. The code will also use Segwit and try to follow Bitcoin Core as closely as possible However, there are no detailed technical information available on bitcoin gold.

Our thoughts

The bitcoin community has lots of disagreement and various hardforks has happened due to lack of consensus among big miners and developers. We see this bitcoin gold fork more of a reaction towards Chinese mining giant Bitmain which maintains antpool (currently holds the largest hashrate distribution amongst mining pools and mines 16.4% of the block). This is the group which support bitcoin cash hard fork previously in August.

There are still technical issues with bitcoin gold. Currently Bitcoin Gold will have the same address format as Bitcoin, and Bitcoin Cash, and this has already caused problems. There have been reports of people sending bitcoin to bitcoin cash wallet and never get their money back. There is also no details on the replay attack protection and testnet launch date and this is quite alarming in view that fork date is in 3 weeks time on 25Oct17.

We expect more hard forks to come as bitcoin community will continue to have disagreement on scaling the core network. Bitcoin cash, bitcoin gold, bitcoin unlimited whichever you call it is not the original bitcoin network but disorganized miners doing their own fork. In fact, the word ‘fork’ has been used too lightly and we should just consider these coins (bitcoin cash, bitcoin gold) more as an airdrop instead of a fork.

Trading recommendation: Buy and hold bitcoin to get free airdrop

