Will 25 October be the Disaster-Day for Bitcoin?

Many bitcoin holders are worried about the upcoming hard fork. First of all, let us understand what this fork is trying to accomplish.

Bitcoin Gold will be the new virtual currency that will operate on Bitcoin’s blockchain but will use a different algorithm. This algorithm aims to solve the problem of centralized mining. What we have now for Bitcoin is that over 50% of the mining takes place in China and this goes against the original idea of a decentralized currency. It just happened that a lot of data centers that mine Bitcoin are located in China.

Moreover, the hardware that is used to do the mining - ASIC (Application Specific Integrated Circuit) chips - are also manufactured primarily in China by basically one manufacturer. As you can guess, this creates an incentive for that company to use its monopolistic market position to ramp up the prices. And they do.

Thus, the Bitcoin Gold algorithm would be resistant to ASIC mining. This means that mining can be done on other machines so that we truly can aim at a globally distributed ledger (blockchain) and not the centralized version that we have now when the ledger is hosted in a few geographic locations (so if we, say, have a nuclear war, you can still get access to your Bitcoins).