Bitcoin gold (BTG) was created when the Bitcoin Gold blockchain split from Bitcoin in October 2017 with the intention of reforming the mining process that secures the network. The community behind the project hoped to reduce the role of large miners operating capital-intensive specialized equipment by changing the underlying algorithm, giving smaller operations a chance to participate.
The BTG price hit a record high of $456.25 in December 2017 shortly after the cryptocurrency was launched, according to CoinGecko data. After the initial interest waned, BTG’s price sagged, hovering between $10 and $30 from 2018 to 2020. By March 2020, the price had lost 99% of its value, slumping to an all-time low of $4.25.
Because of the way Bitcoin Gold split from Bitcoin, in a radical change known as a hard fork, everyone who owned bitcoin at the time received BTG. That meant bitcoin gold’s supply was the same as bitcoin’s, and both have a supply cap of 21 million coins.
The Bitcoin Gold team created the blockchain in private. They mined about a half percent worth of the total blocks, giving the block rewards to themselves, to fuel the development.
How Bitcoin Gold works
Groups of so-called miners secure Bitcoin, and many other cryptocurrency networks, making sure no one can double spend their coins or create coins out of thin air. One problem for cryptocurrencies is the centralization of mining power into the hands of a few, potentially giving the miners power to attack the network.
Bitcoin Gold attempted to solve that issue by switching out Bitcoin’s mining algorithm, SHA-256, with EquiHash. Bitcoin Gold’s developers wanted to reduce the advantage of large holders of capital and specialized technology called application-specific integrated circuits, or ASICs, in favor of smaller miners and a common technology called graphic processing units, or GPUs.
Still, mining on Bitcoin Gold is still very centralized – more so, in fact, than Bitcoin. According to data provider MiningPoolStats, one mining pool controls over 50 percent of the hashrate. Also, because Bitcoin Gold is smaller than other cryptocurrency networks, it’s not as secure, and has been subject to several successful attacks.
Key events and management
The project started with six co-founders, including pseudonymous lead developer H4x3rotab in 2017. Bitcoin Gold split from Bitcoin at block 491,407 on Oct. 24 following a bumpy launch, where some users had trouble syncing their computers to the network.
Seven months after launch, the blockchain was subject to a 51 percent attack at around the same time as several other cryptocurrencies, including Verge and Monacoin, were hacked.
In 2020, Bitcoin Gold was hit with another round of attacks, executed by a miner who rented hash power from mining marketplace NiceHash, according to the project’s developers. The attacker made off with $87,000 worth of BTG.
According to the project’s road map, the development team has plans to add several new technical features, including adding support for the Lightning Network, a second layer to the blockchain that improves speed and scalability of transactions.