There are so many derivatives of Bitcoin it can be hard to know which to purchase or why you shouldn’t just buy the original. In this article, we’ll cover one of BTC’s many derivatives, Bitcoin Gold, and compare it to Bitcoin.
History
Due to differences of thought about Bitcoin, its accessibility and security, new cryptocurrencies were designed from the original Bitcoin to meet different intentions.
Bitcoin Gold (BTG)
Bitcoin Gold was made in November 2017 and is a hard fork of Bitcoin. A hard fork is a radical change to a blockchain protocol, resulting in two branches. These become newly created blocks that aren’t backward compatible.
Bitcoin (BTC)
Bitcoin was initially made by someone under the pseudonym of Satoshi Nakamoto. It was released in 2009 and was originally valued at only $0.0009. This was its first transaction, conducted by a Finnish science student named Martti Malmi.
What Are They, And Why Were They Created?
Why was Bitcoin created in the first? What is the point of a decentralized currency? And what purpose does Bitcoin Gold serve? We’ll be covering these questions below.
Bitcoin Gold (BTG)
Bitcoin Gold was intended to decentralize Bitcoin. In 2017, Bitcoin’s mechanism favored only a small group of miners. The average person did not have much opportunity to get into mining. And the process was just plain expensive.
You needed to purchase Application-Specific Integrational Circuit Miners that cost thousands of dollars. Bitcoin Gold was designed so that it couldn’t be mined by ASICs and could only be mined using Graphical Processing Units (GPUs).
And while we all know that GPUs aren’t cheap today, it certainly makes it more possible.
Bitcoin (BTC)
Bitcoin is the most well-known and valued cryptocurrency in the world today; however, it has its limitations. This is why quite a few tokens have been made from it. For example, Bitcoin SV was created to meet the original intentions of Bitcoin’s creator, restoring the original Bitcoin protocol.
Bitcoin was made in response to the economic crisis at the time as a means of independence from central banking and making transactions in a decentralized network, free from the “financial elite.”
Price History
Bitcoin has experienced many fluctuations since its release back in 2019, but it’s thousands of times more expensive than in 2009. Let’s explore this in more detail and see how Bitcoin’s derivative, BTG, is doing.
Bitcoin Gold (BTG)
BTG currently boasts a value of $ 19.31; however, it has experienced fluctuations this year, rising to as high as $ 46.49 back in March. It held its highest value just months after its release, spiking to $ 449.75 in late December 2017.
Bitcoin (BTC)
Bitcoin has a long price history, increasing slightly over the years after its release. However, it began to find significant momentum in 2018, with a spike of nearly $ 19 0000. Prices would drop slightly and remain relatively consistent before 2021, when Bitcoin would experience a significant spike, rising to about $ 60 000. This would happen twice in 2021.
Market Cap
The crypto market cap is the total current value of all miners’ coins to date. Let’s take a peek at what that looks like for BTG and BTC.
Bitcoin Gold (BTG)
Bitcoin Gold, at the moment, has a market cap of $ 333 160 573, ranking it 101 out of all crypto coins worldwide.
Bitcoin (BTC)
BTC currently has the highest market cap of all cryptocurrencies in the world. As of the time of writing this, it boasts a market cap of $ 380 067 608 255. This is quite an impressive feat for a coin that was initially valued at well under a cent.
Daily Transactions
How often do transactions occur with Bitcoin and Bitcoin Gold? Let’s explore.
Bitcoin Gold (BTG)
Bitcoin Gold has much fewer daily transactions than Bitcoin, and as a result, it boasts profoundly lower transaction fees. The 24-hour average at the moment is a mere $ 0.001978.
Bitcoin (BTC)
Currently, Bitcoin’s daily transactions are at around 261196; however, we can’t say whether this will be consistent or not. Transaction fees are currently below $ 1; however, at times of high congestion, it’s been much higher, at around $ 60.
Block Size
The bigger the block size, the more transactions the blockchain can process at a time. However, smaller blocks require less transmission time. It’s a delicate balance.
Bitcoin Gold (BTG)
The Bitcoin Gold network has quite a small block size, typically just a few KBS. This is helpful because transactions can occur more quickly, but it also makes the Bitcoin Gold blockchain susceptible to congestion.
Bitcoin (BTC)
Bitcoin blocks can be about 2 MBs in size. This is better for the Bitcoin network, particularly with how popular the coin is. There are Bitcoin derivatives with much larger block sizes, such as Bitcoin SV, with a block size limit in the GBs. Bitcoin Cash also boasts a bigger block size of 32 MB.
Similarities
Bitcoin Gold was formed from a Bitcoin hard fork, so, despite using a different consensus mechanism (changing the ease of the mining process when using ASICs), it’s like Bitcoin in many ways and works quite a lot like it.
Differences
Bitcoin and Bitcoin Gold are different in that they use very different consensus mechanisms. Bitcoin still uses the proof of work mechanism, which essentially protects the network by adding complex mathematical problems to the mining process.
Bitcoin Gold uses the Equihash proof of work mechanism, an ASIC-resistant algorithm that requires a lot of memory to work. And simply put, adding memory to ASICs is very expensive, forcing Bitcoin miners to change their methods.
Bitcoin Gold has a smaller block size than Bitcoin, which means it has faster transaction speeds. However, because of its block size, it can also come with higher transaction fees than Bitcoin.
Risks
As with most things in life, there’s an element of risk. Let’s look at what this is for Bitcoin Gold and Bitcoin.
Bitcoin Gold (BTG)
As a smaller blockchain, BTG is at risk of cyberattacks, particularly 51% attacks. Cybercriminals attempting to control over 50% of a network’s computing power perform these attacks. And if they’re successful, they can prevent the confirmation of transactions and even reverse them.
The network has already experienced a few of these attacks in 2018, 2019, and 2020. Bitcoin mining of this coin could prove unprofitable due to this.
Bitcoin (BTC)
The most significant risk with Bitcoin is how volatile it is. You could purchase crypto on a Tuesday, and by that same Friday, it may have drastically decreased in value. In that same vein, it can also increase in price quite quickly.
When investing in crypto, the adage “don’t put all your eggs in one basket” rings true.
Where to Buy
Perhaps you’re interested in purchasing your own BTC or BTG; in the following paragraphs, we’ll be covering where you can do this.
Bitcoin Gold (BTG)
You can buy BTG on certain decentralized exchanges; however, as of the time of writing this, it’s not available on any centralized exchanges. You should be to find it on platforms such as Bitfinex and HitBTC.
Bitcoin (BTC)
You can buy bitcoin from many crypto brokers; after all, it’s the most popular cryptocurrency in the world. You could purchase it from eToro, Coinbaser, Luno, Binance, and many other crypto applications.
Exchanging BTG for BTC
Bitcoin gold and Bitcoin are valued at very different prices, so you’d need quite a lot of Bitcoin Gold to be able to purchase a single Bitcoin.
Future Plans
What does the future hold for BTG and BTC? Let’s take a look.
Bitcoin Gold (BTG)
Bitcoin Gold’s developers have a roadmap focused on scalability and interoperability between blockchains. It has a lot of potential, which is apparent from the upgrades to the Bitcoin blockchain.
BTTG also appears to boast a good ROI, and, as we all know, a good return on investment is the primary reason for any investment. If we were to attribute anything to Bitcoin gold’s success, it’d be that.
Bitcoin (BTC)
Experts anticipate that Bitcoin will continue to rise in price over the years. And some even speculate that the coin will be worth millions by 2030. However, that’s not to say that there won’t be lows.
We all know that Bitcoin is quite volatile. And on the lower end of the spectrum, some speculate that Bitcoin could reach a low of $ 150 000 by 2030. Of course, only time will tell, and these are merely predictions.
For now, Bitcoin will continue as it is, until one day, quite possibly, becoming “21st-century gold.”
Sources:
https://www.thebalancemoney.com/bitcoin-cash-and-bitcoin-gold-and-how-to-buy-it-4160437
https://www.makeuseof.com/what-is-bitcoin-gold/
https://cryptogeek.info/en/compare-coins/bitcoin-gold-vs-bitcoin-sv
https://learn.bybit.com/blockchain/bitcoin-gold-btg/
https://bitcoingold.org/equihash-btg/
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