Here we fork again. Bitcoin Gold! First we had Bitcoin, then Bitcoin Dark and more recently Bitcoin Cash. Now, a group of miners in Hong Kong are planning to fork from the bitcoin network again and create.. Bitcoin Gold.
Led by Jack Liao, CEO of Hong Kong mining firm LightningASIC, bitcoin gold is slated to launch on October 25, with its cryptocurrency being opened to exchanges on November 1.
Source: https://www.coindesk.com/first-cash-now-gold-another-bitcoin-hard-fork-way/
One of the fears when Bitcoin Cash was created was that more hard forks will follow. And to gain traction, they include the word "Bitcoin" in the name. And sure enough, Bitcoin Gold is next. Soon enough we will have Bitcoin Money, Bitcoin Tokens..etc.
What we know so far about Bitcoin Gold
- It will have a different mining algorithm that will enable GPU miners and increase decentralisation rather than relying on ASIC miners and have majority of the mining power centralised in China
- There’s no mining difficulty adjustment
- It has Segwit and replay protection
- It will fork from the main Bitcoin blockchain similar to how Bitcoin Cash was created
- The block height at which the fork will happen has yet to be determined
- Format of the wallet addresses are still to be determined
- Testnet has yet to be launched
With so much work to be done, I'm not sure if they will be able to fork next month. A hard fork results in a chain split where bitcoin holders on the original chain will receive the same amount of coins on the new chain as they are holding on the original chain. You may be thinking.. isn't that free money? The answer is.. YES if there is mining support for the new coin. Given that a mining firm is leading this fork, Bitcoin Gold may have some value. Just like how ViaBTC, an exchange and mining group, supported Bitcoin Cash which gave it value after the fork. Now Bitcoin Cash is valued at $7.5 billion.
With Bitcoin Gold launching on October 25, the price of Bitcoin may repeat the same pattern as before the hard fork that created Bitcoin Cash. This is what happened last time:
- Price of Bitcoin kept going up while alt-coin prices drop as traders wanted to hold Bitcoin to get equal amount of Bitcoin Cash after the fork
- Once the fork happened, Bitcoin price plummeted for a few minutes before recovering. Expect huge volatility
- Bitcoin Cash prices, once listed on exchanges, got pumped to as a high as $1,470 on Bittrex before crashing down to ~$200 a few days later
- After mining difficulty adjustments, more and more Bitcoin Cash blocks started to get mined, which led to a price rally.
Seeing how cryptos can be unpredictable, Bitcoin and Bitcoin Gold prices may not react the same; however, seeing how every Bitcoin holder got richer by receiving free Bitcoin Cash, people may be accumulating Bitcoin again right before the fork.
Free money may sound good to current investors but with all these hard forks, it's going to be extremely confusing for new investors coming into blockchain technology. As Bitcoin is becoming more and more mainstream, having all these Alt-Bitcoins will make the real Bitcoin/ blockchain seem like a joke.