There is very little doubt in the fact that decentralised digital currencies, also known as cryptocurrencies, hold a great deal of potential in shaping the future of finance. However, the idea is feasible as long as there exist entities who validate the authenticity of the cryptocurrency transactions and add the information of the same to the respective blockchain. This process is known as cryptocurrency mining and the people who undertake the arduous task of verifying transactional information are known as miners. For their efforts in keeping the network secure and legitimate, miners are rewarded with small amounts of the native cryptocurrency.
However, since the mining hardware is generally expensive, only a selected few are able to mine cryptocurrencies successfully. This has led to centralisation in the cryptocurrency space, which goes against the entire purpose of having a decentralised cryptocurrency. Nonetheless, many ambitious projects have addressed this issue of mining monopolisation, one of which is Bitcoin Gold.
What is Bitcoin Gold?
Bitcoin Gold is an open source cryptocurrency built with the help of blockchain technology. It is considered to be a hard fork of Bitcoin, that is, a permanent divergence from the Bitcoin blockchain.
In simpler terms, a new branch of the Bitcoin blockchain was created through the hard fork. This new branch exists in parallel with the original blockchain but adheres to a new set of rules that governs its mining process among other things. Since this blockchain has different rules than the original (Bitcoin) one, it made sense to have a cryptocurrency that abides by these rules. This new digital currency came to be known as Bitcoin Gold.
On the surface, Bitcoin and Bitcoin Gold are quite similar. Both cryptocurrencies take 10 minutes to process a transaction. Even the total supply of the two coins is same - 21 million, and there will never be more than 21 million Bitcoin or Bitcoin Gold. Furthermore, both of them use the Proof-of-Work system to achieve consensus throughout their respective network.
However, the two currencies are very distinct as we dig deeper. The distinction is observed in the mining processes for the two digital coins. On one hand, Bitcoin uses SHA-256 mining algorithm to mine new blocks and validate transactions. Without getting too technical, all you have to know is that SHA-256 algorithm requires expensive, technical hardware to mine Bitcoin. As a result, Bitcoin miners have a distinct advantage over other miners.
On the other hand, Bitcoin Gold uses Equihash algorithm to achieve consensus. A great feature of the Equihash algorithm is that there is no need for expensive mining hardware to mine Bitcoin Gold. Any person can use their simple systems to mine this coin, without having to invest considerably in specialised mining rigs. Therefore, with Bitcoin Gold, everyone will have an equal opportunity participate in the mining process even with commonly manufactured equipment.
This is, in fact, the reason why a hard fork of Bitcoin was created - to have a currency similar to Bitcoin but without the undesired traits such as mining centralisation. To put it in layman’s terms, Bitcoin Gold essentially makes Bitcoin decentralised.
Another feature of Bitcoin Gold is Replay Protection. Since Bitcoin Gold has been derived from the Bitcoin’s blockchain, the original blockchain and the newly branched blockchain contain the same transaction history. This makes it possible to replicate transactions from one chain to another, thus effectively receiving the same currency twice, which is a common problem with Bitcoin forks. However, with the help of Bitcoin Gold Replay Protection, transactions from one blockchain are rendered invalid on the other.
Where to buy Bitcoin Gold?
Bitcoin Gold can be purchased from the following cryptocurrency exchanges: Bithumb, Bitfinex, Binance, Bittrex, HitBTC, CoinSpot, Bitfinex, Changelly, Shapeshift, BitBay, et cetera. Since it is a popular coin, it is available on numerous exchanges.
Bitcoin Gold Wallets
Bitcoin Gold Core Wallet can be downloaded from the official website of Bitcoin Gold. The wallet is available across Windows, Mac OS, and Linux.
Bitcoin Gold Mining
It is possible to mine Bitcoin Gold. In order to get started with Bitcoin Gold mining, you need to download the core wallet client and join any of the mining pools.
Bitcoin Gold Price Trends
As of May 25, 2018, the price of 1 Bitcoin Gold (BTG) is approximately 47.25 USD. Just like most of the cryptocurrencies in this space, BTG witnessed a rise in its value in the month of December 2017, when it moved up from the $300 mark to cross $450. However, the price collapsed soon thereafter and as a result, it entered the $100 territory by early February.
Prior to this, Bitcoin Gold had another upward run and this one came shortly after the coin was first released. It was in November 2017, when the coin soared high to cross $400 mark from the lows of $150.
Risks Associated with Investing in Bitcoin Gold
Bitcoin Gold is relatively new in the cryptocurrency space and as a result, it is still subject to high volatility. The price varies substantially on a daily basis and it is difficult to predict how the price will behave in the future. The regulatory setback is another factor that needs to be considered before you consider investing in Bitcoin Gold.
In such a scenario, it is recommended that you invest in traditional, safer instruments like mutual funds. If chosen wisely, they will generate good returns in the long-run.
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