You may of heard recently that there is going to be a software fork of Bitcoin to create a new altcoin called Bitcoingold (BTG). I have tried to give an honest summary of all the information available below, be very careful with any new fork as your BTC could be at risk (see below).
The Bitcoingold developers have given 25th October as the day when BTG coins will be created. The main idea behind it is to create a less centralized Bitcoin by moving from ASIC mining to GPU mining. It will use the same algorithm as Zcash called equihash.
This fork is not to be confused with the possible segwitx2 fork in November.
Now this isn’t a new thing in Crypto, it has happened many times before creating successful coins such as Dash, Litecoin and Zcash. Essentially any development team could fork any open source Cryptocurrency at any time by taking the core client and running their own version from a certain block number onward. For example Litecoin was forked from the Bitcoin Core client primarily by having a decreased block generation time of 2.5 min’s, increasing the maximum number of coins and using a different hashing algorithm (scrypt instead of SHA-256).
However there are many other complex factors that determine if a fork survives and has any value. Such as attracting mining power (if POW), getting listed on exchanges, preventing replay attacks, having a working wallet and finally having people willing to buy it. At the end of the day, just like anything in life, a Cryptocurrency is only worth what somebody is willing to pay for it.
So what the fork is happening with Bitcoingold BTG?
Well this is just another software fork using Bitcoin Core as a starting reference. Therefore if successful holders of BTC will technically also hold an equal amount of the new coin up to the point of the split.
However before you go putting the deposit down on your Lambo there are some very important things to consider.
Firstly this is not some high profile fork being implemented by an experienced, transparent team of developers with community backing. The effort is being led by Jack Liao, CEO of LighteningAsic a miner manufacturer, a Chinese financial backer simply known as Wubi and anonymous lead developer called H4x3rotab.
Secondly if your BTC is held in an exchange, you will only receive BTG if they decide to support it and credit it to you. Only two exchanges have so far committed to BTG, Bitexchange (Hong Kong) and relatively unknown Bitstar.
Update 19/10/2017 – Yobit exchange have also signalled support for BitcoinGold.
Thirdly the project has not yet added strong replay protection to its proposed software. If this is not resolved then you could potentially lose your original Bitcoin (BTC) when moving it from your wallet if not done correctly.
Finally one of the biggest criticisms aimed at the project is its decision to “pre-mine” or mine the new blockchain themselves before its released. This give the developers a potentially large amount of coins to sell or dump as they see fit. The lead developer “H4x3rotab” commented the amount of pre-mine would be “at most one percent of the total supply”.
In any case be careful when the fork arrives and do your research before making any sales or transfers.
Great article from Bittrex confirming support for BTG but highlighting many of my concerns mentioned above https://support.bittrex.com/hc/en-us/articles/115002320451