Here Comes Bitcoin Gold: Bitcoin Rally Falters On Latest Blockchain "Hard Fork"

Tyler Durden's picture

Less than three months after the blockchain "hard forked" and Bitcoin split into legacy Bitcoin and Bitcoin Cash, here comes Bitcoin Gold. As of block 491,407 on the bitcoin blockchain, another alternative version of the protocol of the cryptocurrency has been formed after some developers split the blockchain. And in just one month, yet another fork is imminent.

After the split, bitcoin owners stand to receive one bitcoin gold for each bitcoin, assuming their wallets or exchanges support the new creation, although some such as the most popular US-based exchange CoinBase have refused to support the fork for the time being as there are "concerns about its security and stability." The project, which seeks to improve bitcoin's technology by changing how its competition for rewards is conducted, is the second to launch since August via an increasingly common process called a "hard fork." Readers may recall the term from the launch of bitcoin cash, the alternative version of the bitcoin protocol that spurred global headlines for unexpectedly creating billions of dollars in value, seemingly out of thin air.

Bitcoin dropped over 4% to $5,652 on Tuesday morning, paring a decline of as much as 5.9 percent, after the Bitcoin Gold "snapshot" took place on block 491,407 as of late Monday evening, at which point bitcoin holders sold when the cryptocurrency effective went ex-dividend, which also helped push both Ethereum, Litecoin and other altcoins which had been sold as traders rushed into bitcoin to pick up the free Bitcoin Gold, sharply higher.

Bitcoin's central authority independence - which as Bloomberg notes is part of bitcoin’s appeal - has also made it more susceptible to such “hard forks” which emerge when there are differing visions within the cryptocurrency community. Bitcoin gold aside, bitcoin miners and developers have been embroiled in a debate lately over an upgrade of its protocol that’s aimed at speeding up transactions. A lack of consensus is threatening yet another schism next month.

“This is what will be required to make fair mining accessible to the general public once again,” said Robert Khune, a strategist at the Bitcoin Gold project. "A successful fork will prove that bitcoin always has the ability to escape from any potential abusive mining hardware manufacturers," who he blamed for "unnecessary stalling" this year.

 

“Bitcoin’s recent downturn has been driven by the traders’ anticipation of minor disarray in the wake of the upcoming hard forks,” said Thomas Glucksmann, Hong Kong-based head of marketing at cryptocurrency exchange Gatecoin. “The bitcoin exchange and wallet community has been divided over their decisions to support or reject these contentious hard forks.”

Why Bitcoin gold? According to its website, its main innovation is to make it easier for people without special hardware to mine the digital asset. Instead of powerful mining machines called ASICs used in bitcoin, users can mine it with standard gaming graphics cards, similar to how mining is done with ethereum, the website says.

But wait there's more.

A major part of the blockchain community wants to increase bitcoin’s blocksize in order to shorten transaction times, while another is opposed. The first phase of this plan, called SegWit2x, was implemented in August and took some of the data off the main network. The Bitcoin Segwit2x "fork" is projected to conclude on November 16th and will temporarily result in two bitcoin blockchains.

The table below tries to summarize all the various forks that have already taken place or are expected in the near future.

* * *

Here are some additional details on the Bitcoin Gold fork courtesy of CoinDesk:

What is bitcoin gold?

In short, bitcoin gold aims to achieve two goals:

  • First, bitcoin gold wants to change how mining works by making it so the most powerful mining machines (called ASICs) can no longer be used.
  • Second, by attracting more people to this system over time, it hopes to free the bitcoin network from the large companies that offer these products, and it argues, command undue influence on the network.

Instead of scaling bitcoin to support more users, bitcoin gold tweaks bitcoin in an effort to "make bitcoin decentralized again." This, proponents argue, will make the network, designed to offer an egalitarian way to send payments digitally around the globe, more accessible to users.

And while created via the same mechanism, bitcoin gold differs from bitcoin cash in a few ways, most notably in its distribution.

Differences include:

The bitcoin gold cryptocurrency is set to be created in advance (prior to the code being open-sourced to the public).

  • About 1 percent of the total cryptocurrency tokens mined before the blockchain goes public will be used to pay the bitcoin gold development team.
  • Once this distribution is over, the team claims it will launch the cryptocurrency so that users can redeem their coins.
  • Of course, while it aims to become the de-facto version of bitcoin, others might consider bitcoin gold an "altcoin" – the term has long been used to denote any cryptocurrency launched using bitcoin’s existing code, but that has an alternative market or use case.

Of course, while it aims to become the de-facto version of bitcoin, others might consider bitcoin gold an "altcoin" – the term has long been used to denote any cryptocurrency launched using bitcoin’s existing code, but that has an alternative market or use case.

Do I have bitcoin gold?

All bitcoin owners will receive the cryptocurrency at a rate of 1 BTC to 1 BTG, setting the stage for possible market activity.

But, that's not to say it's totally intuitive to retrieve.

One quirk is that it'll be easier to redeem the funds from wallets or exchanges that recognize the cryptocurrency. The easiest way, then, to retrieve the bitcoin gold is to move bitcoin to a wallet or exchange that supports bitcoin gold, or to hold bitcoin in a wallet where you own your private keys (rather than holding them with an exchange).

To date, 20 exchanges and wallets promise to support bitcoin gold once it launches, according to the project's website.

Although one of the most popular U.S.-based exchanges, Coinbase stated on October 20 that it does not support bitcoin gold due to skepticism about how developers have made project information available to others.

"At this time, Coinbase cannot support bitcoin gold because its developers have not made the code available to the public for review. This is a major security risk,” the post reads.

This is perhaps something to keep an eye on as the project progresses. Although the project will officially fork on Monday night, it's not yet open to anyone and everyone, and there’s still plenty left on the developers' to-do list.

Who is behind bitcoin gold?

The team behind the hard fork appears to be a relatively small group.

Hong Kong-based LightningAsic CEO Jack Liao, who's an outspoken critic of the state of bitcoin mining, first broached the idea of bitcoin gold back in July.

His company LightningAsic sells mining equipment, including GPUs, the type of computing hardware bitcoin gold is supposed to rely on.

Since first introduced earlier this summer, the team has expanded to include pseudonymous lead developer h4x3rotab, as well as a team of five other volunteers who are now working on developing and promoting the cryptocurrency in their spare time.

The project can be tracked on Github and on the community Slack group.

How do people feel about bitcoin gold?

All that said, for those interested in exploring or using bitcoin gold, it's worth noting that it has generated its share of controversy.

Satoshi Labs CEO Marek Palatinus, who launched bitcoin's first ever mining pool, is skeptical the project will actually work to decentralize mining as planned. And he's not the only one to throw shade at the new project.

Bitcoin developer Rhett Creighton is working on alternative bitcoin gold "protest fork" software that seeks to pursue the same idea but without setting aside some of the new cryptocurrency for development.

If more than 51% of miners choose to use his software, the so-called pre-distribution to developers will be erased, he told CoinDesk. "It's up to the miners to decide what they want," he added.

All in all, it's unclear if business and mining groups will ultimately support the project, and if they do, how much value the alternative blockchain could create.

For example, while a list of roughly 50 businesses and miners support the so-called Segwit2x fork, similar support hasn't been seen for bitcoin gold. Likewise, though bitcoin cash began with support from vocal miners and exchanges, bitcoin gold has arguably yet to benefit from such early activity.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
VD's picture

this whole "coin" monetization of beta-btc is a speculative joke; to wit:

 

https://cointelegraph.com/news/why-does-bitcoin-fail-as-a-payment-system

 

 

FreeShitter's picture

Sold some at 6100 made a killing, have my buy orders ready. Have a nice day no coiner, perma complainer.

tmosley's picture

For realz. Kinda wishing I had followed my instincts and bought IOTA hard when it hit 30 cents. Oh well.

FreeShitter's picture

Yeah I feel the same about VTC, missed that pump. I have some in SALT, NEO, OMG, PAY, PIVX, ETH, and no LTC this time around.

tmosley's picture

>SALT

Wew, just looked at the website for that. Gonna be some forced liquidations thanks to that on the next big downturn. You'd have to be some kind of madman to accept something as volatile as crypto as collateral on a dollar loan.

Creepy_Azz_Crackaah's picture

If you don't buy bitcoin now you're stoooopid. Because it is backed by math. Rare math, I'm told. Very valuable, rare, math. buy, Buy, BUY!!!

Crypto "currencies" can only go up, to the moon, and higher. Math makes it not possible to go down. buy, Buy, BUY!!!

If you disagree with me it it becasue you are ignorant, stooopid, and old-bug, and a peanutz. Convince you yet?

VD's picture

perhaps "Satoshi" pays these two buttcoinzer buttbuddies to literally post here 24/7/365, pumping this scam day and night while boasting of their "killings" and promising continued exponential "gains" -- what a sad sad bunch of fukups.

BaBaBouy's picture

LINK/BACK Bitcoinz With Physical GOLD and you may have a winner ~ ~ ~

Creepy_Azz_Crackaah's picture

Back any imaginary currency with something real and you have something real, no longer imaginary. Of course, gold is preferred but Beanie Babies will do in a pinch.

VD's picture

 a "coin" backed by real coins or bullion? what's the point then? its a NO-COIN vs a real coin, so why jump through crypt0-hoops?

Heavy McNuggets's picture

"so why jump through crypt0-hoops?"

Just to make things more complicated than they need to be, of course!

Zero_Ledge's picture

Buy now!  The supply of bitcoins is limited !!!  (until the next fork...)

espirit's picture

Can't we just skip from Bitcoin Gold to Bitcoin Platinum or Bitcoin RareEarths?

These PM monikers are as confusing as decentralization.

IH8OBAMA's picture

Bitcon breeds faster than a pair of rabbits! 

 

SeuMadruga's picture

They all come out of a wizard's hat !   ;-)

FactDog's picture

As more and more nation-states fail, the demand for cryptocurrencies will increase. I think BTC is the market leader and will win in the long run.

 

 

Gaius Frakkin' Baltar's picture

Cryptocurrency does seem bubbly right now.

But I've thought the same about Fedbucks for years, so I dunno...

I mean I'm not going to sell Bitcoin because some jew bankers and sandnigger princes tell me to because those are exactly the type of people who should squeal if the petrodollar is coming into question.

Mr. Universe's picture

I'm confused with all this hard forking going on. Perhaps Satoshi Nakamoto can come on line and explain it all, because transparency is what BC is all about??

silverserfer's picture

It basically a bunch of dim wits getting hard forked with a hard fork. They seem to like it too which is not suprising. 

tmosley's picture

Hahaha, yeah, that's right, trust other people not to fuck you over.

You peanutz and your "backing" fetish. Don't even know what it is 99% of the time.

Creepy_Azz_Crackaah's picture

Ah, this is good. Now that we're BOTH calling people peanutz said people will be convinced that we are correct.

Woo, hoo! WINNING!

Buy bitcoin, peanutz!

tmosley's picture

A peanut is simply someone consumed by cognitive dissonance. Not everyone who disagrees with me is in that state of (absense of) mind.

You have no arguments. How can you expect to be taken seriously by anyone other than the rest of the peanut gallery? Or are their green arrows enough for you?

silverserfer's picture

Your such a maverick tmos. keep shruggin goff the red arrows they dont mean anything. were the biggest bunch or morons around here anyways. We will never attian level of mental genius of a phonestar or tmos. Cryptos are just to complicated for our caveman minds to comprehend.

11b40's picture

I believe you.  After all, if you don't understand the difference between to, too, & two, BTC is too complicated for you to comprehend, even if it was explained to you two times.

tmosley's picture

It's not that they are so complicated, its that your minds are closed up and turned off. You are operating off of emotion IE your lizard brain.

For example, if you were acting rationally, you would acknowledge that fonestar was extremely forward looking and is now fabulously rich because of it.

Golden Phoenix's picture

Apparently you think green up arrows and red down arrows are buy and sell signals for ideas. Look at what the chart is doing. It doesn't care what any of us think about it.

Dirty Bumn's picture

bitbugs be like; "But, but muh rarity"

Golden Phoenix's picture

The point of blockchain is no trust is required because of the distributed public ledger. Injecting belief in a guy who swears the gold is there injects trust back into the equation and defeats the purpose.

garypaul's picture

There was something called "bitgold" but I don't know much about it.

Justin Case's picture

A new global cyber virus attack began on Tuesday and targeted corporate networks mainly in Russia, cybersecurity company Kaspersky Lab said. A number of companies in Germany, Turkey and Ukraine have been affected on a smaller scale.

“Our observations show that the majority of the attack’s victims are located in Russia. We’re also registering similar attacks in Ukraine, Turkey and Germany, but on a considerably smaller scale. The malware spreads through a number of compromised websites of Russian media outlets,” the company said in its blog.

The new virus appears to be dubbed ‘BadRabbit,’ according to a dark net page where the details on ransom for the encrypted files were posted. The initial ransom is 0.05 Bitcoin ($300), but the virus features a timer and promises to raise the price if the ransom is not paid in time.

Bunga Bunga's picture

Math is scam. And it is racist too. /s

VD's picture

yeah, you should check out the math in the link i posted; if you can do 2 + 2 then you know how shit btc really is.

alt-center's picture

Truth be told, I was also quite suspicious about bitcoin.

But after doing some research I understand why the value is going up exponentially.

I'm looking into mining bitcoin. With a 70.000 euro investment I'd be able to mine 3.5 bitcoin in a month, but if you keep the evergrowing hashrate in mind I'll only mine half a bitcoin per month in a year time. In that year I'll have a 30.000 euro energy consumption. So, in a year time I'll have a maximum of 25 Btc mined for 100.000 euro spent. If my calculations are correct and Hashrate keeps growing as it does today price should go up x6 every year just to give an incentive to miners.

I'm quite certain it's the wet dream of the BIS and other power structures to have a virtual currency, that's why they are underwriting the technology IMHO. The fact that the European court cleared the way for bitcoin to be a legal currency tells me the BIS is all in favour of it...

espirit's picture

2 MB block.

Faster? More secure?

We'll see.

Buckaroo Banzai's picture

"and Hashrate keeps growing as it does today price should go up x6 every year just to give an incentive to miners."

Don't forget that as the 21 million hard limit is approached, more and more of miners' compensation will be derived from transaction fees, and less and less from actual BitCoins mined. There are multiple factors at play.

espirit's picture

Don't forget disputes between developers and miners.

That's a biggie...

explosivo's picture

Look into proof of stake coins instead. You can buy into a POS coin and stake them for dividends without investing in any mining equipment. Ethereum is scheduled to move to proof of stake in the future. 

silverserfer's picture

I was in the hood the other day buying some drugs and I saw a homie with a bitcoin mouth grill it was dope.  

Buckaroo Banzai's picture

It's an almost completely nigger-free form of wealth.

Golden Phoenix's picture

Actually they're quite busy on Youtube selling their souls for referrals to Bitconnect, cloud mining, and other complete shit.

SafelyGraze's picture

what people are beginning to appreciate is that btc benefits from double exponentialism

not only does the value of each bitcoin increase exponentially, the number of different types of bitcoin (resulting from forks) also increases exponentially

the result is tremendous, endless increase in value that will continue forever

 

tmosley's picture

Only until crypto dominates money and finance. Then the best coins will level out and become quite stable, while the useless ones go to zero (something that already happens on a regulat basis).

Ghordius's picture

stable?

stable as in... stability? not possible.

in any market, price stability is only possible if

- it's an efficient market with no variations in demand and supply

or

- there is a "market maker"

crypto currencies have a supply that is given/locked in at "birth", usually, and a very "jumpy" demand

and they do not have a "market maker", which is the very appeal of many such offers

(the common label for a "market maker" in more traditional currencies is National Bank, btw, or just Bank, or Central Bank)

just saying, mind, nothing against crypto as such. just something against the belief that markets have hidden magic powers. they don't

tmosley's picture

> it's an efficient market with no variations in demand and supply

Duh. It's called FOREX, and that is what crypto is gunning to replace. 

slyhill's picture

I believe there are Market Makers here. A vast majority of the coins are owned by very few. They control the flow. They profit handsomely from any fork. Think De Beers.