In 2017, Bitcoin has witnessed a lot of conversation about its forking into new cryptocurrencies. In August 2017, it was Bitcoin Cash (BCH) that forked away from the Bitcoin blockchain to create a new cryptocurrency. Later, the talk started for a new solution, called SegWit2x, which would create twice the block size in the new fork of the cryptocurrency. However, while the fate of SegWit2x would be decided later in November, the fork that came into fruition in October 2017 was called Bitcoin Gold (BTG). While Bitcoin Cash and SegWit2x were scaling related forks aimed at increasing block size of Bitcoin blockchain, Bitcoin Gold aims to decentralize Bitcoin’s mining by implementing a new proof-of-work algorithm. Upcoming Bitcoin Gold (BTG) Fork and ASIC Resistancy Centralization of mining According to many experts in the bitcoin and cryptocurrencies domain, while bitcoin was born as a decentralized entity, the current state of bitcoin mining is anything but decentralized.

Oct 24, 2017 - As profiled in our explainer, the project aims to tackle the perceived problem that miners as a group have too much influence over the direction of the bitcoin network. To lessen their control, bitcoin gold replaces bitcoin's current mining algorithm with one that cheaper graphics processing units (GPUs) are. Oct 24, 2017 - Interactive Investor spoke exclusively to the man behind Bitcoin Gold, Hong Kong-based businessman Jack Liao, the chief executive of bitcoin mining outfit. Jack is 42 years old and was educated in China. What's wrong with us having a pre-mine of 200,000 BTG to raise money for the development?

Bitcoin mining is in large parts centralized to a key spots in China. The aim of the Bitcoin Gold is to show how bitcoin can become as decentralized as possible.

The fork was initiated by Jack Liao, CEO of HK based mining hardware producer LighteningASIC. The project began witnessing a lot of support and traction since the first Bitcoin Cash fork in August 2017, until it finally happened on 25 October 2017. Learn more about Bitcoin Gold at the The support for an ASIC-resistant fork led to the creation of Bitcoin Gold. The community believes that in the early years of Bitcoin’s release, it was truly decentralized as individual users were often also the miners. However, the introduction of specific ASIC (application-specific integrated circuits) hardware has resulted in mining becoming relatively centralized to data centers operated in China – about 65 percent of Hash power comes from China. High control with mining hardware manufacturers While the mining of bitcoin witnesses some level of centralization, the ASIC hardware production is even more centralized, with only a handful of companies producing mining hardware and specialized chips.

The proponents of the new currency are of the opinion that as there are limited hardware producers, the mining equipment come at huge costs. This goes against the decentralized mining dynamics that bitcoin aims to achieve. It also suggests that the barrier to entry to the ASIC market is too high for it to become a free market.

Bitcoin Gold is currently an experiment to see the kind of traction and interest the currency can achieve by giving power back to individual users. Therefore, the developers behind the fork hope to bring mining back to individual users / participants by replacing the mining algorithm with one that it ASIC resistant. The developers aim to achieve this by making Bitcoin gold implement a new proof-of-work algorithm called Equihash, instead of bitcoin’s SHA256.

An experimentation with decentralization of mining Bitcoin Gold is currently an experiment to see the kind of traction and interest the currency can achieve by giving power back to individual users. There are several reasons why cryptocurrency users and enthusiasts might support the idea / concept: • ASIC mining hardware is expensive. • ASIC mining manufacturers have too much of an influence / monopoly. • Bitcoin mining is largely centralized in China. • Bitcoin mining is being done at data centers managed by professionals, rather than at individual homes.

While it is still an experiment, only time will tell if the concept becomes a worthwhile idea to implement to the bitcoin, or withers out as a figment of imagination.

It's forking season. After (Bcash) forked from the Bitcoin blockchain to create a new cryptocurrency ( ), and ahead of the that may do the same thing, a third Bitcoin fork is in the making: (Bgold; BTG). But where Bcash and SegWit2X are scaling-related forks - both mainly increase Bitcoin's block size limit - Bgold wants to re-decentralize mining by implementing a new proof-of-work algorithm. 'What was born as decentralized is now centralized,' Bitcoin Gold contributor J. Alejandro Regojo told Bitcoin Magazine, referring to the current state of Bitcoin mining. 'With this fork, we want to show how Bitcoin can be as 'Satoshi' as possible, as social as possible, and as decentralized as possible.' Mining Centralization Bitcoin Gold was initiated by Jack Liao, CEO of Hong Kong-based mining hardware producer, and was first announced in late August. Bitcoin Cash BCH Mining Laptop.

The open project has been gaining traction and support in the wider cryptocurrency space since, with a as a main hub for discussion and organization. Bgold is currently being developed by the pseudonymous developer 'h4x3rotab' along with a small group of volunteers contributing to the project in other ways. The attention Bgold has attracted is probably in part because anyone who owns bitcoin (BTC) on October 25th will receive the equivalent amount of BTG. While this model has been criticized, particularly because it presents a burden on service providers and users, it has also proven successful.

With the launch of Bitcoin Cash in particular, users eagerly accepted their batch of 'free money,' while exchanges, wallets and other service providers proved relatively willing to integrate the new coin. Further, the Bgold team believes that this distribution method should also benefit Bitcoin over altcoins as it provides an extra incentive to hold BTC on particular dates. 'But the key goal that we are trying to achieve with this fork is to build a perpetually ASIC-resistant version of Bitcoin,' said Robert Kuhne, another Bitcoin Gold contributor, in explaining the purpose of the project to Bitcoin Magazine. Bgold contributors like Regojo and Kuhne think that Bitcoin's proof-of-work hashing algorithm was essentially broken by the introduction of specialized ASIC (application-specific integrated circuit) mining hardware. In the early years of Bitcoin's existence, individual users were often also miners; this has since become concentrated into relatively centralized operated by professionals.

'And we're now in a situation where 65 percent of hash power comes from a country that doesn't like Bitcoin,' Regojo noted, referring to China's recent on cryptocurrencies. An Uneven Playing Field And while mining is centralized, ASIC production is even more centralized, the Bgold contributors pointed out. Only a handful of companies currently produce such specialized chips. This means that anyone who wants to be a miner in any meaningful way is beholden to these companies, Kuhne argued.

'The way the monopoly manufacturer currently operates is abusive to its customers - individual miners - and the industry at large,' he said, referring to major Chinese ASIC producer Bitmain. 'Manufacturers can produce ASICs at a tiny cost, but miners have to buy at a high price. This violates the one-CPU-one-vote ethos as described in the Bitcoin white paper, because while everyone can buy CPU at the same price, the same is not true for ASIC hardware.'

Regojo and Kuhne see this as a fundamental problem - not something that free market dynamics can realistically resolve. They suggest that the barrier of entry to the ASIC market to compete with existing manufacturers is fundamentally too high to allow for open competition. 'You can't build a factory without approval from the government and banking system.

So there are really only a handful of entities in the world that have total authority over who can and can't manufacture ASIC machines. And all this could potentially get much worse if and when those institution really start feeling the disruption from Bitcoin, which hasn't begun in earnest yet,' Kuhne said. Bitcoin Gold As opposed to the Bitcoin Cash and (especially) the upcoming SegWit2X forks, Bitcoin Gold very specifically does not make a claim to be the 'real' Bitcoin. Instead, the Bgold project hopes it can prove a valuable exercise for Bitcoin; a sort of test case for a hard fork that Bitcoin itself may one day require. Concretely, Bitcoin Gold is now implementing the proof-of-work algorithm. This is already used by and is relatively ASIC-resistant. Full ASIC-resistance, however, is thought to be impossible: Any mining algorithm could be subject to specialized chips.

Like, the Bgold community therefore plans to re-deploy a new proof-of-work algorithm hard fork if it is found out that ASIC-chips for Equihash are being produced. (This plan alone, of course, could be a deterrent for any potential ASIC-producer.) For security, the project plans to implement strong replay protection to avoid loss of funds for unsuspecting or non-technical users. It will also adopt a new difficulty re-target algorithm to prevent the blockchain from stalling: Difficulty is re-adjusted at every block instead of once every two weeks.

While the coin is set to launch two weeks from now, the Bgold codebase is not yet fully developed and ready to be deployed. Implementation of the new proof-of-work algorithm and replay protection, as well as the new difficulty re-adjustment scheme, are yet to be finished. Nor are all the details for the project even ironed out. Indicated that Bitcoin Gold would have a closed launch and a presale of coins.

A new batch of BTG was to be mined in the first week after the fork and subsequently distributed to designated investors, not unlike an ICO. Proceeds of this 'ICO' were then to be used for development and other Bgold-related purposes. Monero XMR Miner Website more. However, as interest in the project grew, this idea became more controversial. Not everyone involved with Bitcoin Gold likes the idea of an additional founders reward - something Bcash, for example, did not have.

Kuhne addressed the issue by stating: 'We have heard a lot of feedback from the community, so this proposal will be replaced with an updated and improved plan. But we will not completely rule out the possibility of a modest pre-mine to provide a basic level of funding for the project.' Disclaimer: The author of this article holds BTC and will therefore also own BTG at launch.