Understanding why Bitcoin Gold (BTG) was removed because Bittrex

Bitcoin Gold (BTG), a hard fork from the core Bitcoin (BTC) is set to be canceled by the Bittrex exchange on September 14th.

The decision comes after a $ 18 million dollar hack on the BTG network in May. If you want to know more about this token and how it is in the eye of the hurricane now, you've come to the right place.

How Bitcoin Gold was Created

Bitcoin Gold (BTG), as we have just said, is a hard fork of the Bitcoin originally occurring on 24 October 2017 at the height of the block of 491,407. The initial project was announced by Jack Liao, CEO of LightingAsic and BitExchange, in July. He intended to modify the BTC work test algorithm from the old SHA256 algorithm to Equihash.

The main idea was to create a mining process that would not need such expensive hardware. In this way, more people could extract BTC. At the time, 70% of the BTC had been extracted from the Application Specific Integrated Circuits, the well-known ASIC miners. Because they can perform SHA256 calculations faster, they have become the standard.

With the Equihash protocol, however, GPUs could be used for mining and the whole process would be democratized. The decision was obviously controversial, so the fork happened. Unlike Bitcoin Cash, however, which is meant to be the "true Bitcoin", BTG was not designed to take over, but only to give the casual miner a chance on the market.

In the original white paper of Bitcoin Gold, you can see that the project believed that Satoshi's vision of "one CPU, one vote" was supplanted by "one ASIC, one vote" and only some people had power. In this way, they intended to democratize Bitcoin.

The First Issues

Unfortunately, it is now clear that BTG simply would not have the success of its cousin Bitcoin Cash, which is still strong and so popular and divisive that it may have a new hard fork in November.

The new BTG token was launched on October 24 and has suffered a serious security breach since the beginning. The network suffered a severe DDoS attack and suffered about 10 million requests per minute that blocked legitimate traffic.

A few hours later the attack had already been "managed", according to the Twitter profile of Bitcoin Gold, but the system remained slow at times. While the site eventually went online, the community reaction was clear and DDoS attacks coincided with many rabid postings about system defects.

Another problem was that there were allegations that 100,000 BTG coins were pre-mined, which wa clarified later by the developers when they claimed that these coins were set aside as a bonus for the team.

During all very hard forks, to request tokens, users had to keep the original tokens at the fork and would receive it automatically. The fork had to be done in November 2017 and the exchanges had time to declare whether they would support the fork or not.

Most major exchanges such as Coinbase, Poloniex and Kraken declared that they would not support Bitcoin Gold (although Poloniex changed their mind later). Coinbase assumed security and stability issues and stated that they would not allow Bitcoin Gold at that time.

The main reason why this happened was because the BTG protocol was vulnerable to attack because it had not implemented full protection playback (which does not allow transactions to be performed on one chain from the other). The problem was solved on November 1st, but you may have guessed it was too late and the damage was done.

One of the few great exchanges that supported Bitcoin Gold was Bittrex. The company announced support for the token, although it also said that users should be cautious because they did not yet have a complete consent code and lacked security.

Problems after the start

The token was launched on November 13 but has had complications since the beginning. Thieves used the @bitcoingolds Twitter address to trick users into delivering their tokens. The launch was already rocky because the network was attacked during the launch and this other problem appeared.

At the end of 2017, the BTG site was compromised, people falsified a Bitcoin Gold wallet to steal money and about $ 3.3 million dollars were stolen with fictitious connections to their portfolios.

As if network security were not serious enough, the last drop occurred on May 18, 2018. After a few quieter months, BTG had its biggest attack to date. The attackers took over $ 18 million from the network. Various exchanges, including Bittrex have lost money.

According to the Bitcoin Gold team, the attackers used a combination of doubled spending and a 51% attack. They had enough hash power to execute the attack and attacked the exchanges because they automatically accepted large deposits. In this way, they deposited the money in the exchanges and their wallets at the same time.

The hackers had already withdrawn funds when the exchanges perceived the attack. This was the last straw for Bittrex, which required 12,000 BTG (about $ 255,000 USD) in offensive compensation and accused the BTG algorithm for this.

Developers recognized the risks and decided to create another rigid fork upgrade plan. [19659004] The unknown future of Bitcoin Gold

After the last attack, Bittrex has renounced BTG and rightly so. It is not yet clear whether other exchanges will follow or not, however, the future is definitely not brilliant for the token, since its image is perpetually tainted.

At the time of this report, Bitcoin Gold had a market capitalization of $ 368 million USD and each token was priced at $ 21.39 USD, ranking at 30 ° by market capitalization