Why was Bitcoin Gold Invented?
After the 2008 financial crisis, an innovative pioneer wrote a whitepaper that would become the foundation of an entire industry; Cryptocurrency!
Bitcoin represented both a currency and a financial payments system that could take economic control away from the large centralised banks and financial institutions and place it back into the hands of the people. By creating an immutable record of transactions and distributing this across an entire network, the ledger would be resistant to attack and third-party manipulation. It accomplishes this by making use of miners, who solve complex mathematical puzzles in order to secure new blocks to the chain.
One inherent problem however, is that as more blocks are created, the more difficult these puzzles become. It didn’t take long before the average computer became incapable of efficiently completing the task. A new generation of ASIC mining machines hit the market, each more powerful than the last. Eventually though, even these formidable devices could not compete any longer. Mining companies entered the hunt for this valuable asset. These giants have entire warehouses that are filled wall to wall with powerful machines and servers dedicated to one single task; Mining Bitcoin.
A large portion of the Bitcoin community felt that these ASIC mining corporations had potentially taken control of the supply and demand of Bitcoin by monopolising the process in which new tokens are brought into circulation. This group of developers created a fork off the original Bitcoin Core in order to create a token whose mining was resistant to the ASIC.
What is the Purpose of Bitcoin Gold?
The fundamental purpose of Bitcoin Gold is to stick closer to Satoshi Nakamoto’s original intention for digital currency. By creating a new algorithm called ‘Equihash’, which is resistant to ASIC mining machines, Bitcoin Gold aims to restore decentralisation and independence by allowing for its tokens to be created by anybody with a GPU (Graphics Processing Unit).
How Safe is Bitcoin Gold?
Bitcoin Gold is ranked in the top 50 most valuable cryptocurrencies available today. However, it is one of the few cryptocurrencies to have been hacked in the past. In May 2018, a group of unknown hackers took control of 51% of the BTG hashrate. The criminals then proceeded to use a combination of 51% attacks and double spending in order to steal over $18 million worth of Bitcoin Gold from various exchanges. Bittrex alone requested around $255,000 in compensation from BTG.
There have been no known attacks since this incident, and many supporters of the token claim that the hack only served to further improve the security of its network, by alerting developers to the vulnerability.
Can Bitcoin Gold be used Anonymously?
Similarly to Bitcoin, BTG payments can be made with a high degree of privacy if the transaction is made directly on the Bitcoin Gold network. Technically, this is not completely anonymous, as there is a record of your wallet address and the associated amount of BTG that was transferred. It is close enough for most people though, because the record only contains a long string alpha-numeric address which would be very difficult to trace back to you. If you are using an exchange or broker however, it is likely that you will have to provide proof of your identity to open an account with them. As the law continues to evolve around cryptocurrency, many of these larger companies strive to comply with AML (Anti-money laundering) and KYC (Know Your Customer) regulations. It is important to understand that these practices are in place to protect both the user and the exchange, and are a necessary step towards the mass adoption of crypto.
Is Bitcoin Gold Real Money?
What qualifies a cryptocurrency as being real money? Well, here at Best Bitcoin Exchange, we feel that anything that holds value and is accepted as a form of payment is real money. Bitcoin Gold is accepted by many merchants around the world for goods and services, and its value places it in the Top 50 ranked cryptocurrencies available today. All currency, fiat or crypto, suffers some degree of price fluctuation. That is why day traders make so much money off the forex markets, by trading one fiat currency for another. The only real difference then with BTG is that these price movements are more exaggerated, with a potential to rise and fall by several hundred percent within a single trading session. Since the introduction of BTGPay, users can now be given a BTG Debit card as well as access to a list of merchants who accept the token as payment.
How Do You Get Bitcoin Gold (BTG)
You Can Buy It
Acquiring Bitcoin Gold can be done through many exchanges and crypto brokers because it is within the top 50 ranked tokens and is a direct fork of the original BTC. In order to purchase BTG, you must first set up a compatible wallet. The official Bitcoin Gold website provides an extensive list of compatible wallets and well-established exchanges where you can buy your BTG coins.
You Can Trade It
Nowadays, you can trade off the price movement of cryptocurrency without having to actually own the underlying asset. This form of trading is known as a CFD or Contract for Difference. It is an agreement that you enter into with a broker in order to speculate on the likely direction the value of the coin will take. CFDs are available through almost every crypto brokerage, but we would recommend that you only use a reputable company that is regulatory compliant.
You Can Get it for Free!
BTG faucets are a way to get small amounts of Bitcoin Gold for free. These often involve completing small, menial tasks such as surveys, installing and testing games or solving simple captcha’s.
How to Store your Bitcoin Gold
In order to store your BTG, you will need to either download a compatible wallet or buy a ‘cold’ wallet. If you visit the official Bitcoin Gold website, a list of free online wallets are available and free to download. Here, you can also discover which exchanges offer the purchase and sale of BTG. At Best Bitcoin Exchange, we recommend our readers invest in a cold wallet storage unit. Devices such as Trezor and Ledger store your tokens offline, away from the prying fingers of hackers. These wallets interact with your computer through the USB port, where you can access coins to trade through an exchange or broker of your choice.
Compare BTG with BTC
As Bitcoin Gold is a direct fork off the original Bitcoin Code, there are many similarities between the two. The main differences can be found in their price and the manner in which new tokens are brough into circulation. Both are based on a deflationary model, with a maximum supply of tokens declared at 21 million and both operate on a Proof-of-Work consensus. As the pioneer of all cryptocurrency, when the value of BTC suddenly rises, the increase tends to be reflected in altcoins as well. This is almost assured in tokens that split from Bitcoin, like BTG and BCH.
This means that you can see a return on your investment comparable to those gained by Bitcoin, but only pay a fraction of the price for each token. Many investors still feel that Bitcoin Gold holds great promise for the future.
Bitcoin Gold (BTG) Price, Market Cap and Supply
At the time of writing (February 21, 2020), Bitcoin Gold is ranked #42 on CoinMarketCap, with a price of $10.49 and a market cap of $183.7 million. There are currently 17.5 million BTG in circulation. The Bitcoin Gold halving (reward given to miners for securing new blocks to the chain) is due to occur earlier than that of its older brother, on April 18, 2020 at block 630,000. This event could certainly cause a sudden spike, and has many investors waiting with bated breath.
Should You Invest in Bitcoin Gold (BTG) or Not?
The decision to make any investment is yours alone, and we would not assume to advise you either way. We only aim to provide you with information that will help you make the most informed decision possible. If we examine different trading strategies, there is certainly opportunity presented by this token. CFD trading is when you bet on the rapid price fluctuations of an asset. BTG has shown remarkable volatility in the past, which means that it is a viable option to enter into a CFD agreement with a reputable broker.
If you are more interested in the long game, consider that the price of Bitcoin Gold at the time of writing is relatively quite low, but stable. The token reached an impressive all-time high of $539.72 back in October,2018 and if these figures are reached once more, the ROI could be truly gargantuan. In fact, if you were to buy BTG today and sell at its highest recorded value, your return would be 5,045% of your initial investment.
If you do decide to invest in Bitcoin Gold, we recommend that you use a recommended broker that is both well-established and regulated.