Bitcoin Gold (BTG) — Democratising Bitcoin’s mining process to prevent ‘centralization’ happening through ASICs
Bitcoin came into existence in 2009 when Satoshi Nakamoto mined the first block on his computer. At that time, it didn’t took a lot of computing power to generate the ‘Genesis Block’ and it minted 50 new bitcoins. Since bitcoin is primarily driven by technology, many people don’t know about its inner mechanics and are only concerned about the price rather than understanding the underlying architecture.
Bitcoin’s consensus algorithm, which is Proof of Work (PoW), has one hard-coded property — ‘block time’. In the bitcoin network, the difficulty of the Proof of Work (PoW) algorithm is adjusted so that a single block can be mined in roughly ’15 minutes’. This is why bitcoin has a hard coded 15 minute block time from the day it was launched back in 2009 by Satoshi Nakamoto himself. In the early days, the difficulty level of the mining was so low that you could simply mine bitcoin on your computer without any GPU or specialized computing equipment. However, when bitcoin took the world by storm, things changed.
Bitcoin Mining Evolution — From CPUs to ASICs
Since bitcoin network grew at a very rapid pace, a lot of miners joined the network to earn block rewards. Due to the increasing activity on the network and more miners, the difficulty level kept increasing and it became impossible to mine bitcoins on an average CPU. This is where the trend shifted to GPUs because they offered relatively more computing power. GPUs stayed for quite a long time but the difficulty level kept increasing so people started staking up hundreds of GPUs and making sophisticated mining rigs to mine bitcoin.
GPU mining soon became unsustainable because the price of the GPU was very high and it consumed a lot of electricity. This is where companies started developing ASICs (Application Specific Integrated Circuits) which were much powerful than the GPUs and gave more output in a lesser amount of time. A single ASIC was the size of a single GPU, but it had the power of hundreds of GPUs and consumed relatively less electricity. However, these ASICs were very expensive and they made mining less affordable for the average consumer and because of this, the trend shifted towards the companies who invested heavily into mining pools and hardware which resulted in centralization as many prospects believe.
Introducing Bitcoin Gold (BTG)
Bitcoin Gold is actually a fork of the original bitcoin, with all its properties and similarities except one thing — ‘Mining Process’. Bitcoin Gold hard fork happened on October 24, 2017 at block number 419406. Unlike bitcoin, bitcoin gold aimed to make the mining process more affordable for a regular consumer to prevent centralization of the mining process. This is why it changed the regular Proof of Work (PoW) algorithm to another one which they named ‘Equihash’. This new algorithm doesn’t have a huge difficulty level, and it makes it easier for the end consumer to mine bitcoin through GPUs rather than expensive ASICs.
Since its launch, bitcoin gold has gathered a lot of traction and its been actively trading on more than 75 exchanges, and has reached a level of 1 Million on-chain transactions. Not only that, bitcoin gold is supported by every wallet that natively supports bitcoin, which means that you can use your regular wallet including all the hardware wallets too. They current roadmap includes Lightening Network (LN) support, Plasma Sidechain implementation, and Cross Chain Block Notarization (CCBN). They have a very strong community of developers and they have been actively implementing all the changes that were in their previous roadmap.
Just like other hard forks, bitcoin gold failed to get enough popularity despite of its vision of a promising decentralized future. As of August 2019, a single BTG is traded at $14.12 USD and has surpassed a total market cap of $247 Million USD. The daily 24h trading volume stands at just over $12.6 Million USD which shows a healthy sign of adoption.
Many people still think that Bitcoin Gold has something to do with real ‘Gold’ but that’s not true because it’s just a hard fork with a new consensus algorithm. Just like bitcoin, BTG has a total supply fixed at 21 Million BTGs and has all the same characteristics as that of the original bitcoin.