Why Bitcoin Gold Was Born

crushthestreet (65)in #bitcoingold • 7 years ago

Bitcoin Gold is the latest chain to split off from the Bitcoin main branch, with an aim to decentralize the currency more. While Bitcoin Cash was designed to deviate away from SegWit and enable larger blocks on their own, Bitcoin Gold is more focused on the mining aspect.

Bitcoin Gold is All About GPUs

It hasn’t been profitable to mine Bitcoin using GPUs for a very long time. Most have already moved their systems over to altcoins as a result (and in this sense, Bitcoin Gold is also an altcoin). The fact that ASICs have taken over the main branch has pushed the cryptocurrency into a fairly centralized arena – the few manufacturers of the ASIC chips are those who get the biggest boosts, as well as the lowest prices, causing them to consistently grow in power above and beyond “normal” miners. On the other hand, GPUs are accessible to anyone and everyone without R&D costs – you just need the money to set up the systems.

To do this, it is moving away from the SHA-256 hashing algorithm Bitcoin uses and into Equihash, the same one Zcash utilizes. This makes it more ASIC-resistant by introducing a memory-hard algorithm. It is important to note, however, that it’s ASIC-resistant, not ASIC-proof. At some point, should it be profitable enough, it’s entirely possible for new systems to be designed that are a lot more efficient in hashing these blocks, but for now and the foreseeable future, it should be good.

How It’s Promoting Decentralization

Bitcoin Cash pushes through decentralization by letting everyone take part again. Back when it was profitable to mine BTC with GPUs and CPUs, everyone was able to do so. Now, you’d earn so little that you would actually be spending money protecting the network. As a result, most simply don’t. And as ASICs have become more and more powerful, companies have grown larger mining data centers, letting them take a bigger piece of the pie. It’s definitely true that someone who has more money will be able to afford more GPUs, and therefore earn more BTG (Bitcoin Gold), but at the same time, their cost goes up proportional to how much their hash rate does. Over time, more efficient GPUs will absolutely be created (and already are, as we’re in a technological boom), but they will continue being put in the hands of consumers.

What About AMD?

There have been some concerns among miners as to what would stop AMD from running their own mining farms. The simple fact is that they make far more selling their hardware to end-users. Could they design new GPUs that are more efficient and keep them for themselves? Absolutely. But as a public company that relies on sales, it goes against business sense to do so. That said, they will likely work on creating new hardware to sell, should there be enough demand (and value). But that’s in the future and nothing to worry about right now.

##What Should You Do With Your BTG?

Another common question, this one’s a bit hard to answer. We’ve seen that Bitcoin Cash has crashed, and as of this writing, a Bitcoin Gold is worth about $120 (compared to well over $5,000 for BTC). Many classify this as a failure and have been dumping their coins as soon as possible, while others have been speculating and picking up more. The simple fact at this point is that there’s no telling where it’s going to go. If it’s profitable enough to mine, people will do so, strengthening the network. If it isn’t, it could just as easily die off. A big part about crypto is in the marketing, so the big question is whether or not supporters are going to market it hard, and if so, what it will yield. At this point, holding or dumping is largely a question of personal feelings as to where it’s going to go.