Best intentions mixed with a bold approach: Bitcoin Gold polarized the crypto space from day one. In the following, we address the most striking differences between Bitcoin vs. Bitcoin Gold and will also include Bitcoin Private in our conclusions.
The main intention of Bitcoin Gold was to solve the inequality within the mining community. To put it simply, there are different algorithms which can be used to solve the equations of the blockchain. In the end, it is only relevant who achieved the solution quickest.
Based on the original idea of Satoshi Nakamoto, anyone with a PC or computing device shall be able to contribute to the consensus via mining. This approach should guarantee a decentralised Blockchain diplomacy also referred to as “one CPU – one vote”.
Bitcoin mining started out with GPU-mining, which uses the hash power of processors available in any personal computing device like processors or graphics cards of PCs or laptop.
However, over the years, more advanced engines surfaced which were specifically designed to the sole purpose of mining Bitcoin.
The most known algorithm used in those machines is called ASIC. Problems start to appear, when the producer of ASIC mining machines, Bitmain, controlled the delivery and use of their machines. Bitmain even follows the strategy of using their mining machines themselves for a given amount of time before they release them into the market.
As a result, mining competition shifted substantially to the benefit of Bitmain, leaving GPU miners on the shorter end. Critiques claim that Bitcoin is more and more controlled by a small entity of “fat cats” who have access to ASIC miners which makes the Bitcoin blockchain more centralized.
Bitcoin Gold now amended the Bitcoin codebasis such that it prevents ASIC-mining machines from participating in mining operations. Only GPU-powered miners shall compete amongst each other, bringing back the original idea of “one GPU – one vote”. Also, the codebasis was amended such that the mining difficulty was adjusted after every block and not only after two weeks as it is the case for Bitcoin. Furthermore, the block size had been increased.
The amendments to the code intended to gather a community of miners which could profitably mine Bitcoin Gold.
The major source of controversy was linked with the forking process itself. Firstly, the core developers tried to organize an ICO which was ultimately cancelled. After that, a so called premine was conducted. During said premine, only the core developers were allowed to mine 8000 blocks of Bitcoin Gold, hence accumulating a total of 100,000 Bitcoin Gold (reward of 12.5 Bitcoin Gold per each block x 8000). Only after the premine, the blockchain was released to public mining and started to operate regularly.
The main objective of Bitcoin Private is to allow encrypted transactions. However, the underlying motivation of Bitcoin Gold, namely a fair mining competition, is also included in Bitcoin Private and is even taken a step further.
The Bitcoin Private blockchain is also ASIC-resistant. No premine was conducted. In order to incentivise miners even more, a so called coin-burn will be conducted in the future. The coin-burn will gradually delete coins from all wallets that had never shown a transaction since BTCP came into existence. The deleted coins will be recycled as miner’s reward.
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