What is Bitcoin Gold?
Bitcoin Gold is another hark fork hitting the Bitcoin scene. If you don’t know what a hard fork is here is a simple explanation. When someone or some group wants to change something withing Bitcoin but can’t get the core developers on board they take the existing chain and from a specified point forward implement their changes. This creates two types of Bitcoin.
This is where we got Bitcoin Cash from, will get Bitcoin Gold, and will get Bitcoin with Segwit2x. Bitcoin Gold will go live on, or around, October 25th of 2017. Bitcoin Gold’s aim is to change how the algorithm works to make it “asic resistant”. This would allow for people to mine for Bitcoin Gold with only a decent graphics card. If you own a good gaming PC you will, in theory, own a good Bitcoin Gold mining rig.
In case you are reading this and don’t know what an ASIC miner is, it is a dedicated machine made to do one thing and one thing only. Mine Bitcoin. These are not cheap an many entities have been buying them up in mass, sticking them in big warehouses and running them day and night.
This has caused centralization of Bitcoin mining and had got people worried. Bitcoin Gold aims to fight this buy forking and making their version profitable to anyone with a decent graphics card. This will decentralize the mining power making Bitcoin Gold’s version more difficult to a double spend attack by any one person or entity. That is the theory.
As with the Bitcoin Cash fork, you will end up with an equal amount of Bitcoin Gold as Bitcoin come the day of the fork. You can hold on to them, sell them, or trade them for Bitcoin; assuming there are exchanges that support it.
Should you sell Bitcoin Gold right away?
Now remember, I’m not a financial adviser, I’m a nerd. So take what I say and do your own research. With that said, I would not advise to sell your Bitcoin Gold as soon the fork happens. Yes you may get a higher conversion rate than if you wait two weeks or a month but you also may miss out on a spike in price as we saw with Bitcoin Cash.
You might even want to exchange some of your altcoins for BTC just to have a little more when the fork happens. I won’t be moving out of my altcoins and in fact will buy more as things dip to get a nice discount on the price of some of my favorite altcoins.
This is all speculation and you should take the time to learn how to read charts. But chart reading is not the end all be all. You need to keep emotion out of your trades. You will buy on a dip and it will keep dipping and you will get scared. Trading is a mind over emotion game and most people let their hearts take over.
As I’ve said it is not smart to sell your Bitcoin Gold as soon as you get it. The price could go up or could go down but until we see if this actually pans out will we know what the true value of it is. If you want to get the most money for your coin good luck predicting the top and you might as well just sell out the gate and potentially miss a spike in price like we saw with Bitcoin Cash. None of this is a gaurentee as we all know far too well in the cryptocurrency space.
Should holders of Bitcoin worry?
Of course not, Bitcoin Gold has never been a replacement for Bitcoin and even the developers of BTG have said this. They want this to be a potential testing ground for Bitcoin and give people a GPU based mining option. There are other altcoins that fill this void though so we’ll see how well Bitcoin Gold does in this space.
Bitcoin is not going away, whether it’s in the form of Bitcoin, Bitcoin Cash, or Bitcoin Gold. If what we call Bitcoin now does not keep the dominance, then one of the others will pick up the slack and we’ll call that one Bitcoin instead of its current name. However, that is not a likely situation for it takes many people to move chains to give that dominance over Bitcoin.
Your Bitcoin will hold its value as it has in the past when news comes out and scares a bunch of people. People panic and sell their Bitcoin only to buy back in at a higher price cause they will witness Bitocoin’s price moving up. Don’t be those people. Hold your Bitcoin through the fork and any dip in price that may come.
It will rebound from any dip caused by this hard fork as with the Bitcoin Cash fork and even when China threatened to ban cryptocurrency all together. That was a huge dip down below three thousand US dollars and we are already above four thousand. Things move quick in crypto, just be patient and if you don’t trust the technology behind this, you should do more research.
My personal thoughts on Bitcoin Gold.
It sounds like a good idea in practice but I don’t see what it will do that other altcoins already do. The only advantage I can tell is that it will keep the mining more decentralized by focusing on keeping it GPU based. Right now Ethereum does this but once it moves to Proof of Stake than Bitcoin Gold could gain an uptick in GPU miners.
Out the gate I think the price fall just like we did with Bitcoin Cash. People will want to get out of BTG and trade it for more BTC since Bitcoin is where all the buzz is. I’ll be holding on to my Bitcoin Gold for about a month to let things shake out. I won’t get as much on the exchange as I could if I sell them early but there are technical reasons I’m holding them through a few difficulty adjustments.
In all honesty I won’t even care if they go to zero before I can exchange them since they are free coins, anyway. I hope that the number of hard forks from the main Bitcoin chain stay fairly low. We will have another hard fork in less than a month’s time after Bitcoin Gold forks and we must deal with this all over again.
I’m glad that the core developers of Bitcoin do not want to hard fork if at all possible. BitCoin Cash was due to people disagreeing with what the core developers did by implementing segwit. Bitcoin Gold developers mentioned that they plan on staying in step with the core developers, so why even fork? We have Litecoin which as been the test bed for many functions and changes to the main Bitcoin protocol. Bitcoin Gold seems a bit like a money grab to some extent. But hey, don’t take my word for it.
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