Bitcoin Gold: Another Bitcoin Fork in the Road
24th October, 2017
The bitcoin fork back on August 1 was the culmination of a dispute over how to scale bitcoin – a long skirmish some have called a “Bitcoin Civil War.” The lack of consensus led to a fork, which is when a cryptocurrency splits into two separate cryptocurrencies. This summer’s fork led to the creation of a second version of bitcoin, Bitcoin Cash. Less than three months later, it’s happened again: On October 23, a second fork in the blockchain created a third version of bitcoin, Bitcoin Gold.
This new type of bitcoin is similar to the original, but will follow a different set of rules. The stated goal is to create a truly decentralized bitcoin by opening up mining to more participants. Bitcoin Gold proposes to do this by allowing mining with graphics cards, rather than specialized (and very expensive) mining hardware. This could prevent Bitcoin from being controlled by a handful of big miners. As CoinDesk explains: “Instead of scaling bitcoin to support more users, Bitcoin Gold tweaks bitcoin in an effort to ‘make bitcoin decentralized again.’ This, proponents argue, will make the network, designed to offer an egalitarian way to send payments digitally around the globe, more accessible to users.”
Bitcoin fork: good, bad, or neutral?
Opinions differ as to what this latest split means, and whether it even matters. Some are concerned about the effect on the bitcoin ecosystem. “What’s deeply troublesome is that these spinoffs sprung from a relatively minor squabble in the bitcoin community on how to handle the block size limit,” wrote Sol Lederer, a blockchain director at LOOMIA. “Instead of coming to agreement, the community, developers, and code are fracturing into different groups.”
Others see bitcoin forks as a sign of continued enthusiasm for cryptocurrencies. Bumps on the road to mainstream acceptance. Bob Summerwill, a chief blockchain developer at cryptocurrency liquidity provider Sweetbridge, considers them a normal, healthy part of cryptocurrency life. “Splits happen periodically in all open-source communities,” he wrote. “Having everyone collaborating in a single project is ideal, but sometimes there are genuine differences of opinion, and network effects are not enough to keep everybody together, so a group secedes.”