The decentralized cryptocurrency industry is very unique in comparison to traditional industries with private companies. This is the case because nearly all cryptocurrencies are open-source, and everyone involved in crypto is in this together.

For instance; blockchain developers work on multiple different projects, crypto and developer events bring brilliant minds together, hackathons increase crypto and blockchain security, most cryptocurrencies code is open and available for anyone to see, the list goes on. The open-source nature of the crypto industry brings people and ideas together which allows innovation and experimentation to thrive.

As a result of the open-source nature of cryptocurrency, the crypto market has an abundance of cryptocurrencies that have been derived and tweaked from other projects. The core source code of many cryptos is copied, tweaked, and created into a separate piece of software resulting in a new cryptocurrency. When this happens, it’s known as a cryptocurrency hard fork and we have seen this time and time again with a multitude of cryptos, especially with Bitcoin (BTC).

Since Bitcoin is the most valuable and popular open-source cryptocurrency with the greatest number of exchange listings, network effects, and so on, its code has been forked and tweaked multiple times to create a new crypto that’s like Bitcoin but with improvements.

One such example is Bitcoin Gold (BTG) – a hard fork of Bitcoin with a changed proof-of-work (PoW) algorithm so that application specific integrated circuits (ASIC) can not be used to mine the Bitcoin Gold blockchain.

In the following article, I provide a comprehensive and subjective look at Bitcoin Gold (BTG) so that you can fundamentally understand how it differs from Bitcoin and what it hopes to achieve. I delve into its unique characteristics, its purpose, level of adoption, as well as its issues and controversies surrounding it.

By the time you’re done reading, you’ll fundamentally understand BTG and what sets it apart from other Bitcoin forks. So buckle up and enjoy this comprehensive guide to understanding the popular digital asset – Bitcoin Gold (BTG).

History of Bitcoin Forks

Before we delve into the history of Bitcoin Gold, it helps to first understand the history of Bitcoin forks. See a brief overview of Bitcoin forks below.

Bitcoin XT

The first notable hard fork of Bitcoin’s client software was Bitcoin XT launched by Mike Hearn in late 2014. This fork proposed an increase in block size from 1 megabyte to 8 megabytes. The project failed to gain user interest and hash power and was essentially left for dead.

Bitcoin Classic

Two years after Bitcoin XT, Bitcoin classic also tried to increase the block size but this time from 1 megabyte to only 2 megabytes. While the project still exists today, the larger cryptocurrency community has completely disregarded it.

Bitcoin Unlimited

Bitcoin Unlimited, initially released in 2015, also attempted to increase the block limit size by up to 16 megabytes. This fork made it so nodes and miners would decide the size of their blocks but ultimately failed to gain traction as well.

Bitcoin Cash

The most successful Bitcoin hard fork is Bitcoin Cash (BCH) which successfully forked the mainchain in August 2017. BCH managed to steal some hash power from Bitcoin and is still running today. BCH differs from Bitcoin by increasing the block size to 8 megabytes and not adopting the SegWit protocol.

Several months after the Bitcoin Cash hard fork, Bitcoin underwent another hard fork resulting in Bitcoin Gold (BTG). BTG is thus far the last hard fork Bitcoin has had. However, the Bitcoin Cash fork has since had its own hard fork resulting in Bitcoin SV.

History of Bitcoin Gold

Bitcoin Gold hard forked from the Bitcoin blockchain on October 24, 2017, at block height 491407. The hard fork was initiated by its founder Jack Liao and five co-founders Hang Yin, Martin Kuvandzhiev, Franco Niebles, Alejandro Regojo, and Robert Kuhne. These creators forked Bitcoin for the stated purpose to "make bitcoin decentralized again."

This reason is kind of counterintuitive because Bitcoin (BTC) is already a decentralized cryptocurrency with no ties to any particular country, a central bank, government body, or any group of people. However, the creators of Bitcoin Gold believed that the mining process behind Bitcoin is centralized and that these miners have too much control over Bitcoin.

Therefore, they forked Bitcoin and implemented a new proof-of-work mining algorithm called Equihash. This mining algorithm prevents ASIC’s from mining Bitcoin Gold and allows standardized computers to mine BTG. Therefore, just about anyone can mine BTG instead of just companies with specialized hardware, which in turn makes mining more decentralized.

However, while the team behind Bitcoin Gold claimed to create it to make it more decentralized, they ironically mined 100,000 coins after the fork had taken place. Many of these coins were placed into a special "endowment" intended for the future development of Bitcoin Gold. However, this was an incredibly centralized thing to do and I'll delve more into this in the controversy section.

Bitcoin Gold Token Distribution

Since Bitcoin Gold is a hard fork of Bitcoin, all Bitcoin holders automatically received an equivalent amount of BTG for BTC they held at the fork date. For example, if you held 5 BTC at block height 491407 on October 24, 2017, you would automatically receive 5 BTG. However, in order to receive this BTG, users would have to follow the required steps to claiming their BTG.

Additionally, the team behind Bitcoin gold “post mined” 100,000 BTG after the hard fork for themselves. Therefore, the token distribution of Bitcoin Gold is essentially more centralized than Bitcoin’s. For Satoshi’s ~1 million mined Bitcoin has forever remained dormant and will likely remain that way.

Bitcoin Gold has the same maximum supply as Bitcoin, meaning there will only ever be 21 million BTG. Currently, the total and circulating supply of Bitcoin Gold is 17,513,924 BTG.

Purpose of Bitcoin Gold, A Bitcoin Competitor?

While Bitcoin Gold is a hard fork of Bitcoin, the two projects are not direct competitors with one another. Unlike Bitcoin Cash which is also a hard fork of Bitcoin, Bitcoin Gold does not try and steal Bitcoin’s identity, mining hash power, and user base. Bitcoin Cash was a contentious hard fork but Bitcoin Gold was, for the most part, peaceful.

Bitcoin Gold’s sole purpose is to try and offer a more decentralized version of Bitcoin by implementing an anti-ASIC mining algorithm and enabling smaller-scale GPU mining. Therefore, Bitcoin Gold is more of a competitor of other ASIC resistant cryptos such as Vertcoin (VTC), Ravencoin (RVN), and Monero (XMR).

Additionally, the vision of Bitcoin Gold as stated on its website:

“BTG enhances and extends the crypto space with a blockchain closely compatible with Bitcoin (with SegWit and Lightning Network) but without using resources like Bitcoin hashpower or vying for the "real Bitcoin" title. We're creating a welcoming space for new devs and new technologies building on a bitcoin base.”

Bitcoin Gold Issues and Controversies

Even though Bitcoin gold was not a contentious hard fork, it’s launch was shrouded with controversy. The team behind BTG claimed to launch the project to “make Bitcoin decentralized again,” but many crypto enthusiasts called their bluff, saying the BTG fork was inspired by nothing more than greed. This accusation and controversy stemmed from Bitcoin Gold’s controversial launch where developers post-mined the first 8,000 blocks (100,000 BTG coins).

The majority of these funds were set aside in an endowment meant to be used for Bitcoin Gold development, and the remaining 5000 BTG were distributed to the founding members as a bonus. This is not out of the ordinary with altcoins, as most altcoin projects reserve large amounts of the coin for themselves, leaving the project with a centralized model and poor crypto distribution.

More than two years have passed since Bitcoin Gold was first launched and the project has pretty well come to a standstill in terms of development. According to the BTG endowment transparency page, only half of the endowment’s funds remain, yet the project hasn’t really developed or produced anything of real substance yet. Therefore, it’s speculated that Bitcoin Gold’s founders are simply draining the fund to pay themselves, however, this is merely speculation.

Another controversy surrounding Bitcoin Gold is that it was hit by a 51% hashing attack in May 2018. The attacker remains unknown and they were able to steal 388,000 BTG (worth approximately $18 million USD) from several cryptocurrency exchanges. Following the attack, Bitcoin Gold was delisted from Bittrex after the team refused to help pay some of the damages to those who lost money.

Bitcoin Gold Products and Adoption

In Bitcoin Gold’s 2 year lifespan it has failed to gain any real adoption or support. In its beginning during the 2017 cryptocurrency bull market, BTG garnered some speculative adoption, but other than that, nobody really uses or cares about it. The only BTG products available are a proprietary BTG Core wallet and a BTG light wallet called ElectrumG. A wide variety of other cryptocurrency wallets support Bitcoin Gold, but it's only because it is a fork of Bitcoin and very easy to add BTG support.

Furthermore, according to the Bitcoin Gold website, the project has ambitious plans going into the future with a wide variety of developments. Though these developments are unlikely to ever happen, you can see them listed below:

Lightning Network (LN) Mainnet

LN wallet integrations

Schnorr Signatures

BTG Plasma Specification

Plasma: Mainchain Implementation

Plasma: Sidechain implementation

MyCelium Wallet

CCBN – Cross Chain Block Notarization

Research support for user-issued assets on the mainchain

Crosschain Atomic Swap support

Private Transactions

Decentralized Mining Pools

Blockchain Democracy

Conclusion

Bitcoin Gold is essentially a pointless cryptocurrency that was launched during the hyped-up cryptocurrency mania phase in 2017. The project doesn’t really offer anything new or differentiate from what other projects have already done before. It has failed to garner adoption and a loyal community. While Bitcoin Gold may have initially been launched with good intentions, it has failed to succeed and appears to be more of a scam coin than anything else.

What do you think about Bitcoin Gold (BTG)? Do you think it’s a viable cryptocurrency project or was it fueled by greed? Let us know what you think in the comment section below.