So, is another coming hardfork going to kill Bitcoin? The answer is no. Will Bitcoin Gold hardfork somehow affect the price of Bitcoin? Maybe. Are the Chinese to blame for possible dilution of Bitcoin value after the Bitcoin Gold hardfork? No. The reality shows us that there doesn’t exist either black or white, it is always mixed. The hardforks are nothing without the users, miners, and communities. If hardfork happens it means that current blockchain protocol doesn’t satisfy some part of the community. That’s why they do it to separate themselves and try to create something better.
Should we, as investors in Bitcoin, be alarmed? I think yes, we should. Either way, Bitcoin is not the only thing that splits. Community splits. And what happens to cryptocurrency when some part of its community leaves for another big project? It loses its value. Maybe this value is not price but something else, something even more important.
Even though I heavily criticize Bitcoin sometimes, I still am a believer in this cryptocurrency, its future, and its community. I hope that one day we will see that every Bitcoin iteration succeeds in one way or another.
Let’s now take a closer look at the coming Bitcoin Gold Hardfork and try to understand the reasons this project came to life.
2017 is going to be the year of many Bitcoin hardforks that dilute the value of BTC cryptocurrency in some way.
Bitcoin recently has experienced User Activated Hardfork that created a new cryptocurrency that is valued at $400. Two other hardforks are expected to create 2 new cryptocurrencies.
First of August was the birth date of a new cryptocurrency that separated itself from Bitcoin core, Bitcoin Cash. This cryptocurrency aims at becoming an everyday means of payment.
Bitcoin Gold developers declared that 25th of October will be the day when BTG coins are created through the hardfork. I will expand on this on the next slide.
Finally, November is the month when Bitcoin will get another hardfork to make all market participants start accepting 2mb blocks. What will happen then? Bitcoin core, the main developer for BTC, warns that it will update the next Bitcoin Core client to automatically disconnect nodes that support SegWit2x fork. And let’s remind ourselves that during New York agreement 87% of miners agreed to increase the block size. That really feels surreal.
What is the idea behind the BTG? Bitcoin Gold main idea is to decrease centralization of the network by using GPU mining.
Bitcoin Gold is being created by Jack Liao, CEO of LightningASIC, one of the biggest ASIC miners in China. First mention of this project appeared this year in July.
Only minimal changes are made to Bitcoin core codebase to transfer Bitcoin from ASIC POW to GPU POW. Or SHA-256 algorithm to Equihash. The same GPU algorithm is currently used by Ethereum and zCash. On the right you can see the table with the main differences between main Bitcoin versions.
The Bitcoin Gold founders are willing to create a more decentralized Bitcoin. And they think that shifting from ASIC mining to GPU mining can create the environment where it isn’t possible to significantly centralize the network.
Change of ETH to a complete POS network could shift GPU mining to such cryptocurrencies as ETC and BTG. It could really increase the networks’ value.
Strangely, for some period of time, BTG site had ICO announcement on the page. And I didn’t completely get it because they needed to create new coins for that. What about the 21 million token argument and BTC past?
Some experts call this HF “trolling”. They see that it is all done to further destroy the BTC community. Other experts expect BTG to be a new competitor of Bitcoin with the comparable price to Bitcoin Cash. Well, we sure can't know what the price will be.
Looks like Bitcoin Cash set a precedent, and now anyone with sufficient resources will split off on their own chain. I'm not sure what the long-term implications are, but I wouldn't say the communities/users are splitting away.
Many bitcoiners such as myself are still hodling their BCH and even use it occasionally. So the way I see it: with every split, some portion of the community will use the new chain and some won't.
So maybe it's a net gain for the crypto ecosystem overall as miners have more choices regarding which chain they want to mine, and users get to decide which chain is best suited for them. Competition is good, no?
No
bitcoin gold has a plan to premine https://github.com/BTCGPU/BTCGPU/pull/2