What is the Bitcoin Gold Cryptocurrency, and How Does It Work?

Bitcoin Gold (BTG) was created in 2018 as a hard fork of Bitcoin and has completely severed its links with the Bitcoin blockchain.

Bitcoin Gold has delivered on some of its promises, such as faster processing times than Bitcoin and complete anonymity. Hang Yin led the development team of Bitcoin Gold, which comprised six co-founders, and they used open-source technology to create the blockchain. To send or receive BTG, users need an internet connection.

As a virtual currency, BTG is not subject to bank issuance or restricted by the monetary policies of the Federal Reserve or Central Bank. The community members and the Board are in control of the blockchain.

The Creation of Bitcoin Gold

It was introduced to leverage the existing blockchain while introducing complete anonymity and reducing block size to speed up transaction times. The creators believed that Bitcoin favored major miners and did not give small, day-to-day miners with inexpensive mining equipment a fair chance, which went against the democratic access on which the blockchain philosophy was founded.

Like Bitcoin, Bitcoin Gold serves as a currency and offers a platform for cryptocurrency improvement, research, and transactions. It can also be used as a settlement for goods and services, as an investment in digital assets’ marketplaces, and as an enabler of independent payment mechanisms like other cryptocurrencies.

The Working Mechanism of Bitcoin Gold

The Equihash proof-of-work algorithm powers the Bitcoin Gold ecosystem, linking block output to the memory available for storage. The custom modifications required at intervals to keep up with the updates to the algorithm put ASIC machines at a disadvantage from the onset of Bitcoin Gold. 

Unlike other cryptocurrencies, Bitcoin Gold resembles Monero in terms of anonymity, whereas Ethereum and Bitcoin publish transaction details through their respective explorers.

While Bitcoin produces about 5 Transactions Per Second, Bitcoin Gold is reported to be up to 27 TPS. Like Monero, it employs complete transaction anonymity, shielding the network’s wallet addresses of senders and receivers.

Does Bitcoin Gold Offer Complete Anonymity?

Although BTG offers transaction anonymity if users purchase it through a regulated network, the platform will be able to track the amount of BTG users acquired and the time of purchase. In addition, if users buy Bitcoin Gold from an open marketplace, only the person who transferred the BTG crypto to users will be able to see what users received. 

However, except for the above exceptions, BTG can be used anonymously, and no one can know if users have sold or sent their holdings. The wallet identities of the parties involved in a transaction are not shown on the in-house explorer and are masked using encryption and representative symbols. 

When one party sends BTG to another, the final delivery does not reveal the sender’s wallet address. It also does not provide the sender with the actual wallet address of the receiver. In both scenarios, the network generates an encrypted address for validation and verification.

Conclusion

Bitcoin Gold is known for its faster processing times and complete anonymity. It is similar to Monero in terms of anonymity and can process up to 27 TPS transactions per second. However, if users purchase it through a regulated network, the platform can track the amount of BTG users acquired and the time of purchase.

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.