Next bitcoin hard fork is scheduled for October 25, 2017. On that day there will be a blockchain setup and new BTG blocks will be added later.
Users will receive as many Bitcoin Gold coins as they had bitcoins at the time of setup.
Start of BTG mining and addition of new blocks to the blockchain is planned for the same date
While many cryptocurrency users and enthusiasts are counting days before the SegWit2x hard fork, there is another one happening soon, and that is Bitcoin Gold. We explain what it is, how and when it will take place and what you need to do to prepare for it.
Bitcoin Gold: what is it?
An idea of Jack Liao, the founder of Lightning ASIC a mining firm based in Hong Kong, is quite ambitious. Bitcoin Gold aims to become a more attractive currency than the original Bitcoin (Bitcoin). To achieve this it is important to try to solve the problem of centralizing the mining by changing algorithm that ensures the operation of the Proof-of-Work protocol.
To change the algorithm, hard fork is needed, so the creators of BTG have decided to follow this path. For this purpose they chose Equihash, an algorithm sensitive to the amount of RAM, which is now used for the Zcash cryptocurrency.
It is believed that in the nearest future no one will be able to create ASIC for mining through this algorithm, which means that the use of processors and video cards will again become justified, and the production of cryptocurrency will return to the users' hands.
Developers of BTG also think of pre-mining in the volume of up to 1% of the total number of tokens. It is not yet clear how this idea will be realized, but its purpose is probably to transfer part of the reward for mining to developers. The total number of BTG tokens should not exceed 21 million coins.
What is the idea behind ASIC resistance?
Application Specific Integrated Circuits aka ASICs differ from CPUs in a way that they can perform just one task, but they cope with it extremely well.
Today, bitcoins are almost entirely dominated by ASICs, mainly by Bitmain, Bitfury and Canaan devices. In many respects this is due to the fact that the Proof-of-Work algorithm in the bitcoin network (SHA256) is quite simple and does not require a significant amount of RAM.
Equihash, by contrast, is a fairly complex hashing algorithm, which requires a lot of RAM for its operation. This means that the production of ASIC for Equihash would be much more expensive and would not guarantee a significant increase in the speed of mining.
A normal processor can work with the SHA256 algorithm with a hash rate of about 5-10 MH/s. For ASIC, the hash rate at the same algorithm will be about 5-10 TH/s - in other words, the mining will occur about 1 million times faster. If Equihash is used, a normal CPU can mine with a hash rate of about 10-30 H/s, and the specialized equipment with a hash rate of about 1000-3000 H/s, or about 100 times faster.
This means that Equihash provides much more equal conditions than SHA256 because of the ASIC resistance. It is of course difficult to predict how much economics would change if Equihash mining becomes as profitable, but it can be surely said that the efficiency gain will in any case be much less than for SHA256.
How and when will it hard fork?
Developers plan to choose one of the blocks for hard fork on October 25, 2017. This does not mean that their tokens will be available on the same day -just a certain block will be frozen as part of a new blockchain, and in the future it will be added to the BTG blocks.
They are currently planning to launch BTG in early November; meaning that there won’t be new blocks in their blockchain for about a week.
Their test network is planned for sometime in the end of October. Soon after, they will release their software.
How will it affect me?
This whole Bitcoin Gold thing should concern you only if at the time of the hard fork, that is October 25, you will have bitcoins in your accounts. Then you get exactly the same amount of Bitcoin Gold.
The developers have provided reliable protection against replay attacks, so you shouldn’t worry about that.
Yet, to access your Bitcoin Gold tokens, you will most likely need to create a wallet or carry out the necessary transactions manually.
Principally, if Bitcoin Gold turns out to be cheap (less than 0.0001 BTC), you probably should not do anything at all. If it turns out to be more attractive (0.01 bitcoins or higher), wallet developers will certainly create tools that will allow you to quickly access Bitcoin Gold.
If your bitcoins are stored on the stock exchange, sooner or later it will give you access to your BTG. This is especially likely if the new currency will cost more than 0.01 bitcoins.
Of course, it is better to manage your private keys yourself, as this gives you the maximum flexibility, but in principle, to give you your BTG is the fiduciary duty of any exchange.
Bitcoin Gold is yet another hard fork that promises some changes in the ecosystem. If you already have bitcoins, you have nothing to fear - on the contrary, you can get some free money. But if you are a wallet developer or an exchange owner, this is a completely different story.