BTG stands for Bitcoin Gold, also referred to as Bitcoin GPU. It originated from an initiative by developers opposing segwit2x: "NO2X".
BTG is a new digital currency obtained through a hard fork of the Bitcoin blockchain, with key features including:
Similar to Bitcoin Cash, BTG will add SIGHASH_FORKED (a security mechanism post-hard-fork).
BTG will be pre-mined. The BTG blockchain will initially mine in a non-public environment, meaning there will be an initial allocation for early developers and supporters.
BTG will adopt the Equihash PoW algorithm, which differs from BTCs SHA256 in that hash power will be influenced by the memory size of computing devices. Therefore, ASIC miners will no longer be effective for mining BTG.
The creator of the BTG project is Jack Liao, founder of LightningASIC. The company developing Bitcoin Gold is headquartered in Hong Kong, and its lead developer is an anonymous individual named "h4x3".
BTG is a hard fork of Bitcoin BTC. On October 24, 2017, it split from Bitcoin at block 491407. The BTG blockchain will initially mine in a non-public environment, meaning there will be an initial allocation for early developers and supporters.
BTG uses the Equihash PoW algorithm, which differs from BTCs SHA256 in that hash power will be influenced by the memory size of computing devices. Therefore, ASIC miners will no longer be effective for mining BTG. However, Bitcoin originally aimed for decentralization. Currently, only a few manufacturers produce mining equipment, leading to a monopoly on mining power. These manufacturers have undoubtedly seized control over Bitcoin, which goes against the original intent.
To change this situation, Jack Liao and his team hoped to create a digital currency that would be "ASIC-resistant," a cryptocurrency that does not require expensive, advanced mining hardware like ASICs, which became BTG. Unlike the more successful previous Bitcoin hard fork – Bitcoin Cash (BCH), BTG is not intended to replace Bitcoin. From the BTG whitepaper: "The emergence of Bitcoin Gold is to protect Bitcoin and ensure its status as the primary cryptocurrency."
Project Highlights
1. Decentralization
Bitcoin Gold (BTG) adopts a PoW algorithm called "Equihash" that cannot run faster on dedicated devices used for Bitcoin mining (ASIC miners). This gives ordinary users a fair chance with ubiquitous GPUs.
2. Fair Distribution
A fair and efficient distribution of the Bitcoin blockchain, immediately distributing a new digital asset to people around the world interested in Bitcoin. Other methods, such as creating coins with a new genesis block, concentrate ownership in a small group.
3. Replay Protection
To ensure the security of the Bitcoin ecosystem, Bitcoin Gold has implemented full replay protection and unique wallet addresses, essential features that protect users and their coins from various accidents and malicious threats.
4. Transparency
Bitcoin Gold is a free open-source software project built by volunteer developers and supported by a rapidly growing community of Bitcoin enthusiasts.
Use Cases
1. Asset transfer for overseas migrants, breaking foreign exchange restrictions, saving family and friends from running to banks for foreign exchange or buying foreign currency on the black market.
2. Hedge against severe inflation.
Current Issues with BTG:
BTG currently lacks consensus code, lacks replay attack protection mechanisms, has not undergone sufficient code testing and review, and has no named code developers.
Additionally, the BTG codebase includes 8,000 blocks (100,000 BTG) of private pre-mined blocks. Developers may sell their pre-mined BTG on public markets.
As of October 21, 2017, BTG had not yet applied the SIGHASH_FORKED security mechanism, and development related to algorithm changes was not yet complete. The date of the hard fork and the initial operation of the BTG blockchain were not confirmed, nor was it certain whether new blocks would consistently be generated afterward.
BTG Has Suffered Two 51% Attacks
A 51% attack + double spending involves an attacker sending two transactions using their coins, one to another party and one back to themselves. After completing the transaction with the other party and exchanging equivalent value, the attacker launches a 51% attack, invalidating the transaction with the other party while retaining the exchanged item.
On May 16, 2018, Bitcoin Gold (BTG) suffered a 51% attack.
The attackers approach was roughly as follows:
1. As a miner, temporarily gained over 51% of the hashing power.
2. Deposited a large amount of BTG into an exchange.
3. Simultaneously, mined on a private BTG chain and excluded the deposit transaction from the exchange.
4. Quickly sold the BTG on the exchange and withdrew the funds.
5. Due to having significant hashing power, the privately mined chain became longer than the main chain when broadcasted, replacing the main chain where the exchange deposit transaction no longer existed.
6. The exchange lost 8,000 BTG that did not exist on the main chain.
The miner launched 17 attacks over four days, attempting to double spend 20,500 BTG, causing significant losses for the exchange.
On January 23, 2020, Bitcoin Gold (BTG) suffered a 51% attack, with $72,000 being double spent. This was the second attack on Bitcoin Gold. In the latest attack, after controlling 51% of the hashing power, the attacker twice reorganized the blockchain network, double spending 1,900 BTG (approximately $19,000) in the first instance and 5,267 BTG ($53,000) in the second.
