What is Bitcoin Gold? How Does Bitcoin Gold Work?
Bitcoin Gold (BTG) is one of the largest and highly debated Bitcoin hard forks. A hard fork can either occur due to a growing customer base, or a conflict between developers and differences of goals. Bitcoin Gold, however, chose the hard fork to “make Bitcoin decentralized again.” While making Bitcoin decentralized again seems quite redundant because Bitcoin was designed to be decentralized.
With that being said, Bitcoin Gold’s decentralization issue was pointed at its inclination toward major miners. Thus, a team led by Hang Yin consisting of six co-founders began developing Bitcoin Gold, leveraging the open-source technology and launched the blockchain network in 2018. They developed Bitcoin Gold with the aim of not disproportionately favoring major mining operations. But, what is Bitcoin Gold? What is the technology behind it? Let’s take a look.
Connecting your Bitcoin Gold Address to ZenLedger For Your Crypto Tax Forms
- To import your Bitcoin Gold transactions into ZenLedger for your crypto tax forms, all we need is your public address.
- Select the proper blockchain or wallet from the dropdown list.
- Paste your address into the address field in ZenLedger.
- Select if the wallet is based in the USA or not.
- Then hit the ADD COIN button.
What is Bitcoin Gold?
BTG is a cryptocurrency based on Bitcoin fundamentals meaning it was developed by altering some of the existing blocks of the Bitcoin network for decentralized governance. It doesn’t require specialty application-specific integrated circuits (ASICs) as common GPUs are adequate for mining. ASICs miners have the monopoly while mining but anyone can mine with a GPU restoring independence and decentralization.
How Does Bitcoin Gold Work?
The Bitcoin Gold ecosystem functions on the proof-of-work (PoW) algorithm, Equihash-BTG. This algorithm connects the output block to the memory free for storage, essentially disregarding ASIC machines. These mining machines would need custom modifications at regular intervals to match the algorithm updates. Simply put, ASIC machines will become obsolete before achieving their full potential and delivering the best ROI. Small scale hardware miners will be favored as big winners making the network and its reward system decentralized.
In terms of anonymity, it resembles Monero, an open-source project managed by a community of decentralized developers. And clearly, it is different from Bitcoin and Ethereum as they disclose transaction details whereas Bitcoin Gold doesn't reveal the actual wallet address.
Bitcoin Gold has expedited faster processing times than Bitcoin by increasing block size and it has introduced full anonymity. For accessing BTG, a user needs Internet access to send and receive the tokens. As a digital currency, the reins of Bitcoin Gold blockchain is in the hands of the board and community members rather than a bank or the monetary policies of the Central bank or Federal Reserve.
Nonetheless, Bitcoin Gold shares some of its similarities with Bitcoin. It functions as a currency and provides a competent platform for research, transactions, and cryptocurrency improvement. It also functions as:
- A services and goods settlement
- An investment in digital assets marketplace
- An facilitator of independent remittance mechanisms
After a brief explanation of what is Bitcoin Gold and how it works, let's quickly run through its mining requirements.
What is Bitcoin Gold’s Mining Requirement?
If you want to mine Bitcoin Gold, you will be termed as a validator who spends their computing power to solve mathematical puzzles to validate transactions and earn rewards in the form of crypto tokens. Simultaneously, they perform the important function of accurately updating the cryptocurrency’s ledger. They also ensure that the wallets are debited and credited properly so that no one double spends their coins.
With that out of the way, BTG uses the Equihash PoW algorithm and has a relatively lower hash rate. To mine BTG and get a block reward, you need a graphics processing unit (GPU) such as a NIDIA GeForce GTX 1060, which is an entry-level device yet perfect for beginners. This device is small in size and operates at a frequency of approx. 1,600 MHz making it fitting for miners who don’t want to spend too much on electricity costs.
If you want to boost your hash power, you can opt for the AMD Radeon RX580. AMD is well known for its quality hardware devices and this processor in particular can get as much as 29 megahashes per second (MH/s). However, if you want to go up a notch then the NVIDIA GeForce GTX 1080 Ti can fit your requirements as it can go up to 32.3 MH/s. This is a good choice but it consumes a fair amount of power, 250 Wh to be precise and it costs around $860 as well.
With all this said, stand-alone mining can yield good profits only if adequate blocks are mined consistently. To overcome this obstacle, miners have created pools and combined their GPU powers. For the best rewards, experts recommend joining a mining pool or cloud mining service. In case you want to buy Bitcoin Gold here’s how you do it.
- Acquire a wallet: You’ll need a secure wallet to store the token
- Access an exchange: Open an account in a crypto exchange such as Binance, Coinbase, Kraken, or others
- Make your purchase: After getting and wallet and opening an account on a crypto exchange, you can buy Bitcoin Gold
Bitcoin Gold is relatively new but it has unique properties that differentiate it from other cryptocurrencies. Nevertheless, it has yet to see the same levels of adoption that Bitcoin has attained. So, what is Bitcoin Gold’s future? The network will analyze and explore the possibility of implementing smart contracts and developing a decentralized fiat-crypto brokerage network.