- Bitcoin Gold was forked from Bitcoin in 2017 with the goal of resolving its distribution issues.
- Following a series of 51% attacks, Bitcoin Gold lost more than 98% of its value in just two years.
- Bitcoin Gold currently has under 100 actively reachable nodes, and development has slowed considerably.
Bitcoin Gold (BTG) was one of the first major hard forks of Bitcoin—the original open-source cryptocurrency based on blockchain.
Its purpose was simple—to democratize the mining process and make it more accessible to everyday users, by removing the need for specialized mining equipment to remain competitive.
Despite launching to thunderous market interest, Bitcoin Gold was quickly beset with issue after issue, leading to a dramatic decline in both value and confidence among users. This is a look at the story so far for the now infamous Bitcoin offshoot.
What is Bitcoin Gold?
To achieve its goals of democratizing the distribution of BTG, Bitcoin Gold switched from Bitcoin’s SHA256 mining algorithm to Equihash instead, which allows users to mine BTG using their graphics processing units (GPUs). The Bitcoin Gold development team hoped that this would prevent the centralization of mining power—an issue that Bitcoin and several other proof-of-work cryptocurrencies have struggled with.
The developers of Bitcoin Gold also conducted something known as a “post-mine” between the snapshot date and the date that public mining became available allowing the team to mine a total of 100,000 BTG without competition, out of which 5,000 BTG were transferred to the founding team members, and the rest was set aside for growing the Bitcoin Gold ecosystem.
The development of Bitcoin Gold is mostly managed by the Bitcoin Gold organization—despite its open-source code.
What Went Wrong?
Though the Bitcoin Gold project launched with immediate success, reaching a market capitalization of over $8 billion and briefly holding the position of 8th largest cryptocurrency less than two months after it launched, it was all downhill from there.
For one, a range of popular exchanges initially refused to support the fork, including both Bittrex (then the third-most-popular spot exchange) and Coinbase—which only recently won a lawsuit filed against it due to its stance on the fork. Bittrex later listed the asset once the network had stabilized, but eventually delisted the asset after it suffered a 51% attack in May 2018, and around 388,000 BTG were stolen by the unknown hacker using double-spend attacks.
Did you know?
A double-spend attack occurs when a hacker gains the majority control (51%+) over a blockchain network, and is able to illegitimately spend the same funds more than once.
This 51% attack forced the Bitcoin Gold development team to implement an update to its mining algorithm in June 2018, switching from Equihash based on parameter set <200,9> to a modified…200,9>