How Long Will Bitcoin Gold (BTG) be Boosted by New Algorithm?

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Bitcoin Gold (BTG), one of the most prominent Bitcoin (BTC) forked cryptocurrencies, recently migrated to a new mining algorithm, to ensure that ASIC-resistance is maintained. The Bitcoin Gold (BTG) team announced a successful implementation of the network upgrade by initiating a hard fork on the 536,200 BTG block. The release from team member, Edward Iskra, noted that the upgrade changed the mining algorithm for BTG. With the algorithm changing from Equihash to Equihash-BTG. The new upgrade is a conscious attempt to keep ASICs away from the network, introducing a layer of ASIC-resistance that should band off any attempts at centralizing BTG mining. Although successful so far, it is likely that ASIC manufacturers may pick up on the new Equihash-BTG algorithms moving into the future.

What is Bitcoin Gold (BTG) and ASIC?

Bitcoin Gold (BTG) was founded with the decentralization of mining in mind, adopting algorithms which ASICs cannot mine on. Many critics of ASIC mining machines see these specialized pieces of hardware as a source of centralization, as ASICs can be bought in-masse, putting an ample amount of relatively affordable hash power into the hands of a single entity.

An ASIC (application-specific integrated circuit) is a microchip designed for a special application, such as a particular kind of transmission protocol or a hand-held computer. One could contrast it with general integrated circuits, such as the microprocessor and the random access memory chips in your PC. As much as cryptocurrency mining was originally designed to be something everyone could do with their home computer, those days are long gone. Today, whether you're mining Bitcoin (BTC), Litecoin (LTC), DASH, or a host of other cryptocurrencies, the most effective way to do so is with a piece of hardware known as an ASIC miner.

BTG 51% Attack

Bitcoin Gold experienced a 51% attack in May, amongst growing fears of similar attacks on other blockchains. The double-spend attack saw $18 million worth of BTG being exploited by malevolent attackers, getting a nice payday from the attack.

According to analysis from cryptocurrency community and BTG team, the 51% attack was a result of hired hash power, which may have consisted of ASIC miners. The new algorithm ensures that there is no rental market for Equihash-BTG miners, making the upgraded blockchain more secure.

Edward Iskra made a profound statement regarding the attack. He stated the following:

"The recent 51% attacks, which may or may not have involved ASIC miners, were channeled through hash power rental markets, but with this change in algorithm, there's no longer a rental market for the algorithm we're using, and it's harder to set one up than before. This means more safety. Additionally, this hard fork also introduces a new difficulty adjustment system, ensuring that the BTG blockchain is responsive to large hash power shifts.

LWMA, the improved difficulty adjustment algorithms, allows for the better stabilization of block times, assuring that a new block gets pushed out approximately every 10 minutes after a hash rate strike. Iskra wrote up this change to the auto-switching method which miners conscript to receive the most mining profits. Our improved algorithm will help the blockchain adjust more quickly, providing a firmer flow of blocks."

Conclusion 

Bitmain is one of the most influential companies in the cryptocurrency space, reportedly generating over $3 billion in profits in 2017 alone. The ASIC manufacturer historically built ASICs for the SHA-256 and Scrypt algorithms, or for Bitcoin (BTC) and Litecoin (LTC) respectively. However, Bitmain has recently started creating new ASICs for algorithms that were previously ASIC-resistant, algorithms like Equihash and EthHash. These news ASICs have begun to affect Equihash and EthHash blockchains, such as ZCash (ZEC) and Ethereum (ETH). GPU miners who contribute hash power to these blockchains have been seeing declining profits, with ASICs easily outclassing graphics card rigs.

Ethereum and ZCash have abstained from forking away from ASICs, leading to an environment where GPU miners have had to bow out of mining pools. This will only help Bitmain hold its monopoly on the cryptocurrency mining industry, which lacks competitors to this ever-growing ASIC giant.

Bitcoin Gold (BTG) is the 31st among digital assets with a market cap of $487 million and priced at $29.55 last month but rose significantly to possess a market cap of $506.09 dollars and priced at $29.55 and has 17.13 million BTG available for supply. Finally, the new algorithm cannot be fully said as the perfect safe BTG can find shelter for long. As of writing, speculations claim it to be successful, but a new ASIC development to accept the newly defined algorithm, Equihash-BTG will put Bitcoin Gold (BTG) in a shaky position.

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