On October 24th , there was another bitcoin hardfork, as a result, a new cryptocurrency was created, Bitcoin Gold. Investors and exchanges have already reacted to BTG potential problems, moreover, BTC rate was corrected. Will BTC rate remain high till Segwit2x in November, does BTG have any prospects, and which cryptocurrency is more attractive – read in the review.
24 hours of Bitcoin Gold life
Bitcoin Gold hard fork, scheduled on October 25th, was a bit earlier, on October 24th, that doesn't mean users can yet buy it. Bitcoin Gold (BTG) network will start operating only on November 1st. Still it is not clear, what electronic systems and exchanges the network will work with. Theoretically, this information should have been on Bitcoin Gold site, but during the first 5 hours after the network launch, the site didn't work (under the official version, due to DdoS attack). What the advantages of the new cryptocurrency are and whether it is worth investing, read on.
Bitcoin Gold: cryptocurrency attractiveness for investors
Ahead the hardfork, on October 24th, original bitcoin (BTC) dipped 5%, when its rivals, ethereum and Bitcoin Cash (BCH) grew by 7.22% and 5.36% respectively. By one theory, the reason for drawdown was the correction after the recent historic growth on the rumours from China about smoothing the strict policy towards cryptocurrencies and ICO. But there is also another version, investors don’t favour the second, after August, original bitcoin division (remember, after the first fork in August, cryptocurrency BCH appeared). So, ahead the hardfork, they preferred to transfer their money into other altcoins.
Originally, BTG project was planned as decentralized version of bitcoin but without BTC faults. The project goals are:
to configure mining process, making its transactions simpler;
attract home users to mining, thus eliminating its centralization into the hands of large mining companies.
The use of Equihash algorithm was planned to make mining simpler. According to Jack Liao, heading the project, Bitcoin Gold was aimed at reducing large corporate farms’ influence on mining and to allow home users to mine. But investors suspected business undertone. Jack Liao is also the CEO of LightningASIC, a Hong Kong–based mining company, the new cryptocurrency release causes demand for his corporation’s mining equipment.
Exchanges didn’t favour Bitcoin Gold either. One of the leading cryptocurrency exchanges, Poloniex, has already expressed its attitude to BTG. It won’t support the new cryptocurrency until the software operates sustainably, and there is a double-spending prevention mechanism in its code. Other platforms, including Waves and Coinbase, also criticized code faults and transparency lack.
The first 24 hours turned to be very hard for Bitcoin Gold. Traders were dissatisfied that the cryptocurrency site failed to give thorough information, and then stopped operating at all when the network was being launched. The cryptocurrency dropped from $480 to $155 as to on 25.10.2017 at 17.00.
Potential problems related to BTC, BCH and BTG:
After the fork, each BTC owner will get extra cryptocurrency BTG. It is unknown, how this will affect the quotes after November 1st (when the network is announced to be launched) ;
BTC is one of the main cryptocurrency market drivers. Its weakening can cause a cascade decrease of other cryptocurrencies. And, although ethereum is strongly trusted in, the market can be shaken;
BTG has the same address format as other two cryptocurrencies. Payment transfers to wrong addresses have already occurred.
It is difficult to predict how the new cryptocurrency will behave. Many traders tend to think that Bitcoin Gold, Bitcoin Cash and other ВТС-like abbreviations projects are an attempt to confuse traders and make profit from so-called Ponzi scheme. A vivid example is a sharp rise of a little-known cryptocurrency Bitgem on October 24th, which is placed 996 according to its capitalization.
The growth reason is the same contracted name, BTG, as that of Bitcoin Gold, which confused traders. Meanwhile BCH and BTG projects are more like separate groups’ attempt to centralize into their hands an open code development. So, these projects won’t be able to compete with original bitcoin and can disappear after a while.
Bitcoin Gold prospects look bleak. Analysts believe that the cryptocurrency will follow BCH fate. After its start in August, BCH reached its high in the second half of the month, but then depreciated by half and hasn’t increased since then. Thus, there was Ponzi scheme effect. Something like that can happen to Bitcoin Gold either.
Recommendation to LiteFinance traders
It’s better to stay away from Bitcoin Gold and pay attention to another significant event, the upcoming SegWit2x hard fork, which is scheduled for mid-November. It’s going to be the second attempt to improve original bitcoin network based on BIP141 protocol. Moreover, BCH appeared as an outcome of the first step of Segwit activation, Bitcoin Gold technically doesn’t relate to the process, so it is not interesting for traders.
As a result of the second step in mid-November, Bitcoin network will apply new improved technology Segregated Witness, which theoretically should increase the transactions speed inside the network, reduce the time of their confirming, optimize the blocks size. But there are also Segwit2x opponents:
the protocol activation requires 90% of the network participants to agree. This amount is likely to be reached by mid-November but, meanwhile, the percentage of those, who agree, is only approaching the number;
not all exchanges are willing to support Segwit2x. For example, Hong Kong-based exchange Gatecoin has already rejected to support it. A part of exchanges publicly stated that, in case of the cryptocurrencies division, will support only one, the best, blockchain which will have BTC name.
In case of successful SegWit2x activation, BTC rate can increase by 20%-25% and rise above the level of $7000.
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