On 25 October, a group of cryptocurrency enthusiasts plan to fork the Bitcoin blockchain, and alter the algorithm it uses to calculate hashes, to create Bitcoin Gold.
It will be the second split in this year. But since the last hard fork in July Bitcoin has doubled in price. Could the same happen again come 25 October?
There are a few things you need to about this upcoming hard fork and the impact it will have on your bitcoin and crypto investment.
What is Bitcoin Gold?
Bitcoin Gold is a friendly dividend hard-fork of Bitcoin that intents to solve miner centralization through a proof-of-work change.
Bitcoin Gold will use an Equihash algorithm for mining, which is “ASIC resistant”, also used by ZCash. Thus it’s designed to discourage the use of ASICs for mining. Instead, Equihash is written so that graphics cards offer the most efficient way to mine coins based on it.
The idea is to give mining power back to the users using CPUs and GPUs to mine. Secondly it is intended as a testing ground for new features that may or may not end up in the Bitcoin network.
The most prominent Equihash coin is Zcash, which has USD and USDT trading pairs on Bitfinex, Bittrex, and Poloniex – three of the largest cryptocurrency exchanges.
Bitcoin’s current algorithm includes a system to increase or decrease the difficulty of finding the correct hash for a block based on how quickly the previous 2,016 blocks were found.
While a standard CPU was sufficient for mining Bitcoin in its infancy, users soon realised it was possible to build specialised chips – ASICs – that could mine Bitcoin more efficiently.
As more hash power from ASICs was added to the Bitcoin network, it became more difficult to mine the coin.
What to expect after the fork
If you own before the fork, you will own the same amount of Bitcoin Gold after the fork. For example if you have 2.7 Bitcoin before the fork, you will have 2.7 Bitcoin and 2.7 Bitcoin Gold after the fork.
Three days after the fork, Bitcoin Gold claims will be processed. You should be access Bitcon in your wallet. The reason for the three day waiting is to ensure that the right chain is used and that both deposits and withdrawals can be handled.
When can I withdraw my BTC and BTG again?
Unlike Bitcoin Cash, withdrawals should be mostly automatic. After your claim has been processed you can withdraw the Bitcoin again.
Withdrawing Bitcoin Gold will be possible as soon as the Bitcoin Gold team has released a wallet that can be implemented. This is scheduled for early November.
Enjoy your Bitcon Gold.
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