Bitcoin gold was a big change in Bitcoin’s blockchain network, as it came out in 2017. This is called a hard fork situation. It basically happens due to two major reasons – to include for scale as the customer base for crypto grows, or it might happen due to developer conflicts. As Bitcoin Gold came out, it stated that its purpose was to “make Bitcoin decentralized again.” Hence, Bitcoin Gold mining started as a result.
In this article, you will learn about how Bitcoin Gold mining works, and how is it different from Bitcoin mining. Apart from that, you will learn some of the major aspects of Bitcoin Gold and how it works. Furthermore, this article also shows you how to start Bitcoin Gold mining. Finally, you will also learn some of the major aspects of Bitcoin Gold like its availability, transparency, and future applications.
What Is Bitcoin Gold Mining?
As the name suggests, Bitcoin Gold mining is the process that mints Bitcoin Gold tokens, which is a form of cryptocurrency. Hence, by doing so, you can add those tokens to the Bitcoin Gold ecosystem. Furthermore, if you want to validate your transactions with Bitcoin Gold, you will need to ensure that the token has undergone mining.
Basically, mining is responsible for validating a transaction with a given cryptocurrency. For example, if you want to do transactions with Bitcoin, you will need to ensure that those Bitcoins are mined and you must know how to do Bitcoin mining. Only then, it be a valid transaction in the blockchain as it will secure the network from bad actors.
Hence, you can see that mining is critical for Bitcoin Gold’s survival. If there is an absence of Bitcoin Gold miners, the system will collapse. Here, a miner can mine Bitcoin Gold alone or by being a part of a pool. In a pool, different miners from around the world work together to earn Bitcoin Gold. Apart from that, you will also need a wallet to store the mined Bitcoin Gold.
Understanding Bitcoin Gold
You already that Bitcoin Gold started as a hard fork for Bitcoin, and it wanted to make Bitcoin “decentralized again.” However, you must know that the Bitcoin blockchain is a decentralized blockchain. A decentralized blockchain means that there is no central authority (for example, bank, government, etc.) that conducts the flow of Bitcoin Gold.
However, an issue with the Bitcoin mining process led to the development of Bitcoin Gold. According to Investopedia, “Bitcoin Gold developers believed that by adopting a new algorithm for the mining process (in this case, a so-called proof-of-work algorithm called Equihash-BTG), the new branch of the world’s most popular cryptocurrency by market cap would not disproportionally favor major mining operations.”
Basically, Bitcoin mining requires a lot of resources. A mining venture becomes only profitable, when a pool of many miners with expensive, special equipment start mining the cryptocurrency. Hence, if you want to mine Bitcoin, you will have to invest a large amount of money to create your own Bitcoin rig and join a pool of Bitcoin miners. This shows that the process is difficult, expensive, and complicated.
As a result, Bitcoin Gold’s goal was to alter this algorithm of mining. The focus was to use standard computer systems for the mining process rather than specialized equipment.
Although Bitcoin Gold started strong, it slowly weakened as a cryptocurrency. This is because many big crypto exchanges like Coinbase were skeptical about BTG (Bitcoin Gold). Furthermore, Bitcoin owners also owed Bitcoin Gold at the cost of one BTG or one BTC (Bitcoin). This process is called air-dropping. However, Coinbase did not air-drop Bitcoin Gold to Bitcoin holders, since it did not have enough information about the blockchain.
How Does The Bitcoin Gold Mining Work?
According to Bitcoin Gold’s official website, “Anyone can mine BTG with readily available graphics cards. Bitcoin Gold uses Equihash-BTG, also known as Equihash(144,5) or Zhash. This version of Equihash uses more memory than an ASIC can muster, but runs fine on many graphics cards – maybe even one already in your computer! Try it – and join our forums for support from a like-minded community.”
You already know that the Bitcoin Gold network is decentralized like other blockchain networks. This is because there are no central authorities for the currencies. Rather, the miners of Bitcoin Gold update their ledgers and validate transactions.
Hence, to ensure that there is no single big entity among the miners, Bitcoin Gold is open to all BTG participants for transaction validation. Here, Bitcoin Gold miners need to solve equations that encrypt the data.
The miners use game theory models and spend computing power to solve mathematical equations to validate Bitcoin Gold transactions. Furthermore, to ensure that there is higher competition and a strong health of the system, Bitcoin Gold increases the difficulty of validation puzzles with time.
As a result, the first miner that solves the equation gains the right to validate transactions in the group. Thereby, miners receive compensation for their efforts through block rewards. These block rewards come in the form of Bitcoin Gold tokens.
How To Start Bitcoin Gold Mining? – Steps To Follow
If you want to start Bitcoin Gold mining, you will need a strong system and access to a server. Furthermore, you will also need to consider the shared difficulty of the server. The following are the major steps you will need to take if you want to perform Bitcoin Gold mining:
1. Choose your mining server. For example, if you are in the USA you can use the two give:
Server 1 (USA)
| Share Diff | 1024 for GPU |
| Sever | us-btg.2miners.com:4040 |
| Status | Active |
Server 2 (USA)
| Share Diff | 17408 for Nicehash |
| Sever | us-btg.2miners.com:4141 |
| Status | Active |
Here, if you are in doubt about which share difficulty to choose, make sure you choose the lower one. Choose the high share difficulty if you mine with more than 500 GPUs. As you can see, Nicehash requires you to choose a high share difficulty. However, you must know that there is no effect on miner rewards on what share difficulty to choose.
2. To store the Bitcoin Gold that you mine, you will need to create a Bitcoin Gold Wallet. Here, you can download the wallet from a blockchain system. On the other hand, you can also use a mobile wallet (E.g. Coinomi), or you can generate an address at a crypto exchange (E.g. Gate.io).
3. To start mining, you will need to download the Bitcoin Gold mining software. However, you will need to use different software systems based on the type of GPU you have.
- If you use Nvidia’s GPU, the best option is GMiner.
- If you are using AMD’s GPU, the best option is lolMiner.
4. Finally, you will need to edit the .bat file (Batch File). Here, you will need to use the wallet address that you have received in the first step.
What Are The Pros And Cons Of Bitcoin Gold Mining?
The following are the major pros and cons of Bitcoin Gold mining that you need to understand before you start mining:
Pros Of Bitcoin Gold Mining
According to CoinBase, “Bitcoin Gold aims to improve the mining process by introducing a new proof-of-work algorithm that combats the scalability issues Bitcoin struggles with. This makes it more accessible to a wider range of miners, as it favors GPUs for mining […]. This unique combination of the inherent properties of the original Bitcoin blockchain and an innovative approach to blockchain development and applications opens up a range of potential use cases.”
Here are some of the major pros of Bitcoin Gold mining that you will benefit from:
- Bitcoin Gold earnings are significant as one BTG costs more than $45. Also, solving block rewards will get you 6.25 Bitcoin Gold tokens.
- These tokens are easy to mine. This is because Bitcoin Gold has an ASIC-resistant nature.
- Since one can mine Bitcoin Gold with standard systems, the electric bills are lower, which is the opposite of ASIC-resistant algorithms.
- It helps you to secure the network for the long run.
- If you are mining with less electricity, you will have high profitability.
Cons Of Bitcoin Gold Mining
Here are a few cons of Bitcoin Gold mining that you will need to be aware of:
- Only a few crypto exchanges support Bitcoin Gold. This leads to a decrease in the value of BTG. For example, Coinbase, a reputed crypto exchange, does not support Bitcoin Gold in its exchange.
- Although you can mine Bitcoin Gold through standard systems, the mining process is still energy-intensive. Hence, you might get high utility bills.
- A higher-powered GPU is mostly expensive.
- If you want to avoid mining pool scams, you will have to perform in-depth research. This, in itself, is quite time-consuming.
Availability Of Bitcoin Gold On Exchanges
Investopedia adds – “As the Bittrex and Coinbase examples have shown us, for all cryptocurrencies, one of the major factors that help to determine both short-term and long-term success is its availability on cryptocurrency exchanges. Users must be able to access the cryptocurrency on exchanges to make transactions.”
One of the major problems that top exchanges like Coinbase face with Bitcoin Gold is that it does not have enough information about its mining process. Hence, these exchanges fail to support Bitcoin Gold transactions on their respective platforms. However, exchanges like Coinbase add that you can learn about Bitcoin Gold news and features on their platform.
However, if you want to perform Bitcoin Gold transactions, you will need to visit other platforms. The following are the major exchanges that support Bitcoin Gold transactions:
- Upbit
- Bithumb
- Gate.io
- ByBit
- Bitget
- Coinone
- Changelly PRO
- ProBit
- Zonda
- Indodax
- HitBTC
- BeQuant
- LATOKEN
However, before you use an exchange platform for crypto transactions, make sure that the exchange is secure. The best way to learn about them is by looking at reviews of other customers who perform transactions on the platform.
Bitcoin Gold And Transparency: How Does It Work?
Apart from making a more accessible crypto asset for small miners, Bitcoin Gold also faced certain transparency issues. Despite having a fair and efficient distribution, there is a lack of information on the mining process. Hence, most top-end exchanges do not support Bitcoin Gold transactions. This is because the exchanges are not sure about the mining process.
Actually, Bitcoin Gold tried to increase anonymity by not publishing transaction details of their tokens. Apart from that, they also refrained from sharing wallet addresses. Furthermore, since Bitcoin Gold claims to be an open-source, decentralized, and transparent community project, exchanges expect it to be transparent with their information. Moreover, there are threats from hackers and other malicious entities as well.
Despite attacks, Bitcoin Gold claimed to have implemented various additional safety and protective measures. They claim that their customers are secure and they know how to deal with 51% of attacks on their blockchain.
What Is The Future Of Bitcoin Gold?
Honestly, the future of Bitcoin Gold is complicated and it is hard to predict. As per the Bitcoin Gold 2021 roadmap, the community is focusing on interoperability, applications, infrastructure, and lightning networks.
Furthermore, the Bitcoin Gold developers also aim to shift their governance structure to a DAO model. Before that, the blockchain worked on a broad-based governance structure. Moreover, the system also wants to update its tech stack. For example, they made some updates on their explorers and ElectrumG. In addition to that, they also aim to implement a Layer-2 lightning network, although the amount of transactions in such networks does not necessitate such implementation.
Wrapping Up
Hence, you can see that Bitcoin Gold is a cryptocurrency that came out as a hard fork of the Bitcoin blockchain in 2017. Although it started well, it could not keep up due to a lack of support from top exchanges like Coinbase. However, if you want to perform Bitcoin Gold mining, consider following the steps given above.
Do you have more information to add on Bitcoin Gold mining? Consider sharing your ideas and opinions in the comments section below.
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