Bitcoin Gold Fork
Almost daily, investors are bombarded with headlines about the Bitcoin Gold fork, yet basic questions are often overlooked. For instance, How to get Bitcoin Gold? How many BTG exchanges are there? Is Bitcoin Gold mining any different from regular Bitcoin mining? Should you invest in Bitcoin Gold?…
These are the questions that matter to investors. We’ve done our best to answer them below, but first, you need to understand why the fork happened in the first place.
The Bitcoin split, otherwise known as the Bitcoin Gold fork, happened for the same reason as previous cryptocurrency forks. Some developers propose an upgrade to Bitcoin (BTC), but they need near-universal consensus to make it happen. When they don’t secure that consensus, they initiate a fork.
The result is a splitting of the original blockchain. When the majority of developers laugh a proposed upgrade out of the room, the original blockchain carries on on like nothing happened,
However, part of the blockchain splinters off, forming a new identity. A few months ago, this process resulted in Bitcoin Cash (BCH). Then, last month, rogue developers formed BTG by forking off the original blockchain.
It’s important to note that neither of these forks caused the original Bitcoin any harm. BTC prices shot through the roof regardless; it’s now trading at $6,230!
Now, let’s get down to some more pressing questions.
How to Get Bitcoin Gold Now
If you owned Bitcoin when block 491,406 was mined, you automatically qualify for a rate of 1 BTC = 1 BTG. Everyone who didn’t own Bitcoin at the time can only buy BTG on qualified exchanges.
Here are some exchanges that list Bitcoin Gold:
- Change Now
*This exchange trades in futures as well.
You may notice that we answered two important questions above, “How to get Bitcoin gold?” and “How many exchanges are there?”—but some readers might still feel a nagging worry about the Bitcoin fork.
Maybe you’ve heard stories about people losing money; there was, after all, a terrible incident involving Ethereum last summer. It does happen, to be honest. But the reason it happens is that developers fail to add something called “replay protection.”
Replay protection essentially guarantees that your money won’t fall through the cracks between Bitcoin and Bitcoin Gold. Not all Bitcoin splits come with replay protection, but this one did.
Are There Bitcoin Gold Wallets?
For an added layer of protection, you may want to store your BTG in a cryptocurrency wallet. I generally advise investors to take this approach, as exchanges have been hacked in the past. Cryptocurrency exchanges are generally more vulnerable than wallets.
These three cryptocurrency wallets work with both BTC and BTG:
Other wallets require technical steps. You can find guides for using Bitcoin Core, Electrum, Mycellum, hardware wallets, and paper wallets on the Bitcoin Gold web site. Bear in mind, not all of these guides are posted yet; they are works in progress. Welcome to the ground floor!
Bitcoin Mining vs. Bitcoin Gold Mining
Mining was the core reason for this Bitcoin split. Individual miners complained that deep-pocketed mining operations were gathering huge amounts of power in the system, effectively making them rulers of Bitcoin.
Bitcoin Gold apparently views itself as the solution. Here’s an excerpt from their web site:
“Satoshi Nakamoto’s idealistic vision of ‘one CPU one vote’ has been superseded by a reality where the manufacture and distribution of mining equipment has become dominated by a very small number of entities, some of which have engaged in abusive practices against individual miners and the Bitcoin network as a whole.”
(Source: “FAQ,” Bitcoin Gold, last accessed November 1, 2017.)
As a result, the individual BTG miner should outperform the individual BTC miner. It’s still too early to tell on that score.
However, we certainly know that the core development team for BTG will do well. They automatically receive one percent of all BTG coins mined before its public release, a reward for developing the source code and navigating the Bitcoin split.
But now, on to the Big Question.
Should You Invest in Bitcoin Gold?
The answer to this question depends entirely on your risk tolerance.
Bitcoin Gold has significant upside, but it is a volatile proposition. At the time of this writing, BTG prices were in the realm of $150.00 to $160.00. If it were to follow Bitcoin Cash, it could potentially trade between five percent and 10% of the BTC price. That’s more than 400% upside potential.
Don’t expect smooth sailing, though. Bitcoin Cash has been on a roller-coaster ride since it forked in August. BTC traded as low as $203.44 during its first week, but, eventually, the currency skyrocketed to $487.43 on Bitcoin’s coattails.
If you have a large stake in Bitcoin and want to hedge it, investing in BTG seems reasonable. Other than that, I’ll only add that the rollout of Bitcoin Gold was not impressive. Investors with a lot to lose should probably stay on the sidelines.