What Bitcoin's second hard fork means for the cryptocurrency

The blockchain that supports Bitcoin has split again this week, creating yet another variant on the world's most popular cryptocurrency. The hard fork means Bitcoin and Bitcoin Cash are now joined by a third currency known as Bitcoin Gold, all of which operate as discrete currencies on separate blockchains.

But what exactly does this mean and what effect will this have on Bitcoin?

How did we end up with Bitcoin Gold?

Bitcoin currency is an evolving technology, and its growing popularity has exposed limitations in the design of its blockchain. However, being decentralised, the currency has no owner or single development group, and development decisions are reached when the community as a whole agrees overwhelmingly to a proposal.

In August, Bitcoin experienced its first hard fork when the community failed to reach agreement on how to improve transaction speeds (after an initial compromise appeared to have worked), leading to a splinter group founding its own currency known as Bitcoin Cash.

Now Bitcoin faces yet another issue needing community consensus - specifically the claim that the growing cost of Bitcoin mining - the process has pushed out smaller miners who traditionally used modest computing equipment, and is now dominated by mining farms using sophisticated application-specific integrated circuits (ASICs).

This had led to a number of developers in the community to voice concerns over the amount of control that miners have over the network.

Bitcoin Gold claims to solve this by redesigning its own network in such a way that prevents the use of ASICs in favour of smaller and cheaper graphics cards. It hopes doing so will attract more users and miners to its currency, and wrestle control away from large companies offering mining farm services and products.