Bitcoin Gold is the new cryptocurrency doing the rounds on the internet. Its main aim would be to correct what was supposed to be the main issues with the design of the previous Bitcoin. At present the internet is flooded with hundreds of cryptocurrencies and a lot of them owe their origin to the Bitcoin. However Bitcoin Gold is a lot like Bitcoin Cash. Cash in itself was a Bitcoin spinoff that had been created back in August 2017. Gold differs from Cash in two major ways. Gold is basically shaping up to be a version of Bitcoin. It is much more than just a new platform that has been derived from the source code of Bitcoin.
What has it chosen to retain?
It has chosen to retain the transaction history of Bitcoin. This means that in case you owned bitcoins prior to the fork you would now own the same amount of gold bitcoins per se. Bitcoin Cash was originally supposed to resolve the capacity crunch of Bitcoin by using larger blocks. However, Bitcoin Gold is supposed to deal with another flaw of Bitcoin – the growing rate of centralization in the mining industry which involves verifying and securing the transactions done with Bitcoin.
What was the original version of Bitcoin supposed to do?
The original version of Bitcoin was supposed to make sure that anyone would be able to take part in these transactions – Bitcoin mining to be precise – with the help of their personal computers (PCs). This way they would also be able to earn some additional cash even as they helped the network run. However, even as Bitcoin increased in term of value people found out that they could employ application-specific integration circuits (ASICs), which happen to be custom-built applications in order to perform their mining work in a more efficient manner.
Making mining more democratic
This is the main aim behind the creation of Bitcoin Gold. The strategy where you make influence over networks proportional to computing power is referred to as proof-of-work. The more work that you do greater are your chances to win an opportunity that can help you add blocks to the blockchain. The work in this case implies computing SHA-256 hashes as many times as you can. You can do it billion times if you want. Bitcoin Gold is similar in a lot of ways to Vanilla Bitcoin. However, it uses Equihash, which happens to be a different proof-of-work algorithm.
What do its supporters think of it?
The supporters of Bitcoin Gold think that this cannot be sped up even if you were to use customized hardware. In fact, Zcash – a rival of Bitcoin – has also adopted this software. The software starts with a list that contains pseudorandom bit strings that have been derived from the block, which is the miner’s favorite as far as adding to the blockchain is concerned. The miner then attempts to unearth a subset that contains n strings. This subset is derived from the ones that were generated in step 1. These strings would XOR to zero.
The bit strings that have been chosen in the second step are then concatenated together and then hashed with the goal. This is just the way it happens in the original Bitcoin. The goal here is to find a value that is lower than a predefined value.
More on the process
The hardest part of the process is the second step. The first and the third steps are relatively easier compared to it. Even the most effective algorithm needed to complete the second step needs a significant amount of memory. If you attempt to solve these problems with anything lower than what is the optimal amount of memory there would be some serious computational penalties to contend with.