Bitcoin

What the Bitcoin Gold hard fork is all about

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the-bitcoin-gold-hard-fork-explained
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What is Bitcoin Gold hard fork

 There is already a buzz surrounding the foremost digital currency, Bitcoin, and one may wonder why other currencies are emerging from it, such as Bitcoin Cash (BCH) and even the most recent “hard fork,” Bitcoin Gold (BTG). Well, here we will explain it all in as clear a language as possible. These currencies, called hard forks, did not emanate because Bitcoin decided to create alternatives, of course, having no centralized ownership, no one can make that decision. So why and how is a hard fork created, and what is a hard fork?

Blockchain and Bitcoin Gold

All Bitcoin transactions are logged on to a Blockchain where they are verified, following a regular pattern or protocol. When there is a change in protocol, hence causing previously verified transactions/ blocks to become unverified (or vice versa) in an upgraded protocol software, to which all users must upgrade, a hard fork is said to have happened. A hard fork simply put, involves the permanent creation of a different path in a blockchain from a previous one. The result is that there will now be two nodes, the nodes running the old version of the software, with the old blockchain and the new nodes, running the new version of the software, with the new blockchain.  Once a hard fork happens, all transactions which occur thereafter, on the old blockchain, become unverified. A hard fork is usually unanimously agreed upon in order to upgrade the software, eliminate security loopholes found in an old version of the software, or reverse blocks/transactions (after such events as cyber theft).

Creation of Bitcoin Gold

The most recent hard work on the 25th of October, 2017 resulted in the creation of currency, Bitcoin Gold (BTG). The Bitcoin Gold hard fork resulted from the splitting off from the previous blockchain. This trend may continue because, in mid-November, another new currency called Segwit2x is expected to be also released as a result of a hard fork.

Future Aspects

Whether or not the Bitcoin Gold hard fork will succeed, depends on a couple of factors. There is the issue of a successful consensus between the developers of the new version, the miners, and the Exchanges. If the miners do not support the upgrade and refuse to upgrade their system, hence continue to mine the old system, the new coins will lack support and quickly lose their value. Also, if the major Exchanges refuse to allow the trade of the new coins after they are mined, the coins, receiving little acceptance from the market, will also fail. So for it to be successful, there must be an adequate agreement from all parties involved. Nonetheless, with many viable exchanges in existence and the neck-twisting competition between them, Bitcoin Gold looks like a future success.

Trading Bitcoin Gold

Initially (at the time of the fork), one can only have it if you made a Bitcoin transaction after the point from where the Bitcoin Gold fork split. Trading, for the hard fork, is not expected to begin until November 1, 2017, when it launches on exchanges, and the hard fork will likely be similar to Bitcoin Cash in trade volumes. So expect a similar price level pattern, and in this light, it is advisable to wait for a later pump in price, before selling. If there is a huge rush of this new coin when it launches, there will likely be a sharp price change in both Bitcoin and Bitcoin Cash. While it offers easier mining than Bitcoin currently and 21 million coins to be mined, we may be looking at a large number of Bitcoin alternatives very soon.

Nonetheless, there is a downside to hard forks, as many of such can easily cause price instability and a loss of value to the whole market.

Related: A BEGINNER’S GUIDE ON HOW TO BUY IOTA


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About the author

Tayyab M

I love to talk about global tech-happenings, startups, industry, education and economy.

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