Another Hardfork is on the Horizon
On August 1, 2017 Bitcoin split into two coins in a hardfork that created Bitcoin and Bitcoin Cash, as new creators sought to take on the problem of scalability and transaction times. Once Bitcoin Cash launched, many in the crypto community considered all issues of Bitcoin’s design resolved. But now a third coin called Bitcoin Gold is on the cusp of release and it has the Bitcoin community divided. On October 25, Bitcoin Gold will launch with exchanges opening on November 1.
Here’s why a third coin is being created and the potential pros and cons of Bitcoin Gold.
Bitcoin Gold is Decentralizing Mining – Giving Power Back to the Community
Bitcoin Cash took on the issue of scalability by increasing block sizes to 8 MB. The original Bitcoin could only process one transaction every seven seconds, however Bitcoin Cash can process approximately two million transactions per day. Although Bitcoin Cash and Bitcoin have an equal hash rate, the protocol BCH uses allows for more transactions per second, which means faster payments and a lower cost.
For most of the Bitcoin community, the creation of Bitcoin Cash and use of SegWit2x on the original Bitcoin solved all design issues and ended the need for hardforks. However, a small faction created their own rebellion and continued the hardfork movement with Bitcoin Gold.
Bitcoin Gold seeks to release improved protocol that will challenge Bitcoin and Bitcoin Cash. The idea behind this new coin’s design is to create a truly decentralized Bitcoin. It will do so by allowing Bitcoins to be mined on graphics cards, essentially taking away the mining monopoly that mining firms like Bitmain currently have. Bitcoin is not truly decentralized if corporations control the mining process. Bitcoin Gold seeks to change that by mitigating the big players and giving more power to the community.
Pros of Bitcoin Gold
- Implement “proof of work” algorithm which is optimized for GPU mining
- No single mining firm can unduly influence the network
- GPU mining will allow smaller players to mine coins and have influence
Cons of Bitcoin Gold
- Bitcoin Cash only has 12% of market, Bitcoin Gold could be equally small and thus its purpose and influence might not be met
- Details of the hard fork, like exact block height, are still undecided
- This hard fork had further divided the Bitcoin community
It is yet to be determined if the Bitcoin Gold will be the last of the hard forks, some experts have predicted that more will follow. The concept behind the Bitcoin Gold hard fork seems to hold truer to the original concept behind Bitcoin itself, e.g. decentralization. The question remains as to whether this new coin will take off and if it could be a threat to Bitcoin and Bitcoin Cash.