Bitcoin Gold (BTG) was one of the first major forks of Bitcoin, as the BTG coin split from the Bitcoin blockchain while preserving many of the technical principles of the original Bitcoin blockchain.
Bitcoin Gold is an original open-source blockchain-based digital currency, whose purpose and project are to democratize the mining process by making it accessible to ordinary users, by removing the need for specialized mining equipment, meaning making the mining process for everyone.
Despite the strong start of the Bitcoin Gold BTG project, this was short-lived, as problems continued and surrounded the project, which led to a significant decrease in the currency's value and investor confidence in the currency.
Below we learn the story of the Bitcoin Gold BTG coin and the reason for its depreciation.
What is Bitcoin Gold?
The Bitcoin Gold Project aims to achieve and democratize the BTG coin distribution.
Bitcoin Gold has switched from Bitcoin's "SHA256" mining algorithm to the "Equihash" algorithm, allowing users to mine BTG coin using graphics processing units (GPUs).
The Bitcoin Gold development team hopes to prevent the centralization of mining, a problem that has plagued Bitcoin and many other proof-of-work (mining) cryptocurrencies.
Bitcoin Gold developers also conducted something known as "pre-mining" which allowed the project team to mine a total of 100,000 BTGs before making the mining process publicly available. 5,000 BTGs were transferred to the founding team members, and the rest was allocated to the development of the Bitcoin Gold project.
Bitcoin Gold is being managed by the Bitcoin Gold Foundation, although the project code is open source.
What happened to the Bitcoin Gold project?
Despite the successful launch of the Bitcoin Gold project, reaching a market value of more than $ 8 billion, and the BTG currency briefly retained the eighth position as the largest cryptocurrency less than two months after its launch, but since then the currency's position has been in a continuous decline.
For example, a group of popular trading platforms refused to list the currency and support the split.
Among these platforms we find the "Bittrex" (the third most popular trading platform at the time) and "Coinbase".
The "Bittrex" platform later introduced the digital currency once the network stabilized, but in the end the coin was written off again after it was attacked by 51% in May 2018, and the hacker stole about 388,000 BTG.
This 51% attack forced the Bitcoin Gold development team to implement an update to their mining algorithm in June 2018, switching from "Equihash" to a modified version of "Equihash" called "Equihash-BTG".
Despite the team's quick work and updates, the damage is already done.
The BTG coin reached its highest value ever at $ 539 in October 2017, after which the currency entered a semi-permanent downtrend, falling to $ 260 at the end of 2017, then to $ 12 at the end of 2018, and $ 5.41 at the end of 2019 .
Overall, Bitcoin Gold lost more than 98% of its value in just two years.
Current Status of Bitcoin Gold Project:
In January 2020, a report surfaced that one entity controlled at least half of the circulating supply of the BTG coin, and it can be said that it caused the coin to rise from $ 5.33 to a peak of $ 19.41 in just days, before the market collapsed again.
In the same month, the Bitcoin Gold network was again hit by another 51% attack, as 29 blocks were reorganized and over $ 70,000 of BTG coin stolen through double-spending attacks.
Since then the currency has been suffering more from an outright downtrend and its daily volume on trading platforms has seen a 75% collapse since the start of the year.
It also witnessed a stagnation in its developmental activity in 2020.
Last year, 21 new commitments and 985 new lines of code were committed, while in the past three months the development was zero.
The project management also announced a potential solution to the 51% attack problems with the concept of "Soft fork", known as the Cross Block Documentation Protocol, which may use a secret metal to authenticate the blocks, preventing their forgery.
The Bitcoin Gold network now contains only 97 accessible nodes, half of which are in Germany, the United States, and France.
This has decreased by 10% since July 2020 and 60% since March 2018, indicating a clear long-term downtrend.
Despite the dwindling network of nodes, the BTG developer team thwarted a 51% potential attack in July 2020 by circulating a checkpoint at block 640,650 on the nodes, preventing the attacker from gaining control of the blockchain.