Slashdot Mirror
Bitcoin Gold, the Latest Bitcoin Fork, Explained (arstechnica.com)
Timothy B. Lee via Ars Technica explains Bitcoin Gold: A new cryptocurrency called Bitcoin Gold is now live on the Internet. It aims to correct what its backers see as a serious flaw in the design of the original Bitcoin. There are hundreds of cryptocurrencies on the Internet, and many of them are derived from Bitcoin in one way or another. But Bitcoin Gold -- like Bitcoin Cash, another Bitcoin spinoff that was created in August -- is different in two important ways. Bitcoin Gold is branding itself as a version of Bitcoin rather than merely new platforms derived from Bitcoin's source code. It has also chosen to retain Bitcoin's transaction history, which means that, if you owned bitcoins before the fork, you now own an equal amount of "gold" bitcoins. While Bitcoin Cash was designed to resolve Bitcoin's capacity crunch with larger blocks, Bitcoin Gold aims to tackle another of Bitcoin's perceived flaws: the increasing centralization of the mining industry that verifies and secures Bitcoin transactions.
The original vision for Bitcoin was that anyone would be able to participate in Bitcoin mining with their personal PCs, earning a bit of extra cash as they helped to support the network. But as Bitcoin became more valuable, people discovered that Bitcoin mining could be done much more efficiently with custom-built application-specific integrated circuits (ASICs). As a result, Bitcoin mining became a specialized and highly concentrated industry. The leading companies in this new industry wield a disproportionate amount of power over the Bitcoin network. Bitcoin Gold aims to dethrone these mining companies by introducing an alternative mining algorithm that's much less susceptible to ASIC-based optimization. In theory, that will allow ordinary Bitcoin Gold users to earn extra cash with their spare computing cycles, just as people could do in the early days of Bitcoin.
The original vision for Bitcoin was that anyone would be able to participate in Bitcoin mining with their personal PCs, earning a bit of extra cash as they helped to support the network. But as Bitcoin became more valuable, people discovered that Bitcoin mining could be done much more efficiently with custom-built application-specific integrated circuits (ASICs). As a result, Bitcoin mining became a specialized and highly concentrated industry. The leading companies in this new industry wield a disproportionate amount of power over the Bitcoin network. Bitcoin Gold aims to dethrone these mining companies by introducing an alternative mining algorithm that's much less susceptible to ASIC-based optimization. In theory, that will allow ordinary Bitcoin Gold users to earn extra cash with their spare computing cycles, just as people could do in the early days of Bitcoin.
About.com and wikihow called. They want their non-news content back.
lucm, indeed.
Of not enough bitcoins in the founders pockets!
I'm launching my own crypto currency which gives me more coins up front. You peansants can mine what's left.
So I was reading up on Bitcoin gold the other day. I'm not familiar with how the previous forks like bitcoin cash worked, but for BC gold I read that after the fork, the first 80000 coins are going to be pre-mined by the developers. Seems like a pretty big reward for a rather small change.
Dont miss out, everyone is doing it. If you dont buy now you will miss the boat.
Looks like a ponzi scheme, smells like a pyramid scheme. The technology is interesting but its surrounded by what seems to be an endless amount of negative stories of stolen lost or destroyed 'things'. Valuations all over the map, all seemingly based on nothing but speculation.
Even if some individual 'currency' is limited by some arbitrary design, there is an infinite number of 'currencies' that can be created with other limits or even no limits. So it appears on a macro scale there are actually no limits, and in fact no limiting factors at all.
Not commenting on Bitcoin gold, but this line in the summary is incorrect:
It's true that: BC mining has become a highly concentrated industry, but this was always bound to happen. The way BC is setup and the way the algorithm is build is such that the complexity of calculation and thus the resources needed to perform it are increasing as time goes by. It was predictable from day 1 that as the complexity grows, home PCs (and even custom home built clusters using stuff like playstations that people were for a moment rigging and using for mining) were going to become unprofitable, as the electricity consumption and hence the operating cost would soar past the yielded profit. It's not about efficiency, it's about profitability. People would still be running mining software on their home machines if it was profitable even if the profit made was small compared to large scale dedicated operations, but right now anyone using anything other than a custom mining machine will actually be losing money.
BC is this way by design (and if you ask me, that's one of the major problems of its design), so claiming that the original plan was to keep users running mining software on their own computers is to be ignorant.
This is something that in the long term endangers the whole of BC infrastructure: right now the large scale miners in Asia (mostly China) have kept on doing what they do because the price of the coin has kept going up, meaning that even though electricity and hardware costs have kept increasing, the increasing costs have been offset by the increasing price of the coin. However the fundamental issue is that the market price of BC fluctuates heavily, whereas the complexity only goes one way and that's up. If the market price of BC crashes, the mining will stop being profitable even for the dedicated operators, which will destroy the mining industry and essentially render BC unusable (and hence, worthless).
"It is the business of the future to be dangerous" -Alfred North Whitehead
It's just like Bitcoin except with all these additional features:
- No traction
- No recognition in the industry
- Large pre-mined scam from the inventors
and it addressed one of the biggest shortcomings of bitcoin: Power usage ... by making it unoptimisable and worse,