Bitcoin Gold in a Nutshell
Bitcoin gold essentially wants to make mining easier and open it up for the masses. To do this, they plan on changing the proof of work algorithm from bitcoin’s current SHA256 to something called an Equihash mining algorithm.
Bitcoin’s SHA256 mining algorithm led to the creation of ASIC miners. These application specific integrated circuits (ASICs) are custom hardware created by a few companies. These chips allow people to mine for bitcoin much more efficiently than other methods and lets the companies who produce control a lot of the mining power.
Bitcoin gold wants to solve the proposed problem of mining centralization by allowing anyone to mine the cryptocurrency with a basic GPU graphics card, similar to the early days of Bitcoin.
Bitcoin Gold and the Hardfork
The proposal of such big changes to the consensus rules means that a hardfork will be required. Bitcoin gold will take a snapshot at block 491407. If you hold bitcoin at the time of the snapshot, you will get an equal amount of bitcoin gold. However, make sure you have personal possession of the bitcoin (eg. in a wallet where you own the private keys) as not all exchanges will recognise the cryptocurrency.
Bitcoin Gold Premine
Following the snapshot of block 491407, the blockchain is not opened to the public yet. During this time until Nov 1st, the developers will premine the blockchain themselves. Each block will have a reward of 12.5 BTG and there are reports of 8000 blocks being premined.
The bitcoin gold team have stated that the premine will amount to less than 0.5% of the total bitcoin supply and that they will use the premined coins to mainly fund future development.
Reactions to Bitcoin Gold
One thing to take from this is that it may open the floodgates to future forks of bitcoin. Bitcoin cash showed that this was possible and bitcoin gold is taking it even one step further.
There was also controversy regarding the premine. People are still unsure of how the funds will be used and if the developers will keep to their word.
And regarding bitcoin gold’s initial aim, Satoshi Labs CEO Marek Palatinus, who launched bitcoin’s first ever mining pool, is skeptical the project will actually work to decentralize mining.
Bitcoin gold website https://btcgpu.org/