Bitcoin Gold Introduces New ASIC- Resistant Algorithm

Bitcoin Gold, one of the most prominent coins that resulted from a Bitcoin fork, has just switched to a new mining algorithm, to maintain its ASIC-resistance.

Bitcoin Gold Hard Fork

Bitcoin Gold was created with the aim of being decentralized, implementing algorithms that do not let ASICs mine on. Many see ASIC mining machines as specialized pieces of hardware that lead towards centralization, seeing as ASICs can be purchased in large numbers, limiting a large amount of hash power to a single entity.

Because of this, a few individuals forked off the main ASIC-dominated Bitcoin blockchain into Bitcoin Gold in October 2017. BTG first used the Equihash algorithm, which at that time was ASIC-resistant. Since then new Equihash ASICs have sprung up, these specialized machines presenting a substantially higher hash ratio.

The Bitcoin Gold team announced on Tuesday that it had managed to implement their network upgrade by starting a hard fork on the 536,200 BTG block. Edward Iskra, a member of the development team, stated that the upgrade improved BTG’s mining algorithm. The new algorithm was fittingly named Equihash-BTG.

The May BTG 51% Attack

Bitcoin Gold was the victim of a 51% attack in May. In the double-spend attack, $18 million worth of BTG were exploited by malicious actors, that left with a considerable profit resulting from the attack.

According to analysis from BTG and the community, the 51% attack ensued due to rented hash power, which is believed consisted mainly of ASIC miners. The new algorithm will make sure that there is no Equihash-BTG miners can enter their market, offering more security to the upgraded blockchain.

Edward Iskra stated:

“The recent “51%” attacks, which may or may not have involved ASIC miners, were channeled through hashpower rental markets – but with this change in algorithm, there’s no longer a rental market for the algorithm we’re using, and it’s harder to set one up than before. This means more safety.”

Along with the new algorithm, the hard fork also implements a new difficulty adjustment system, which will ensure that the during large hash power shifts the BTG blockchain will still be responsive.

LWMA, the enhanced difficulty adjustment algorithms, lets blocks be more stabilized time-wise, making sure that a new block gets released circa every 10 minutes after a hashrate swing. Iskra credited this change to the auto-switching method which miners employ to make maximum mining profits.

 “Our improved algorithm will help the blockchain adjust more quickly, providing a steadier flow of blocks,” stated the release.

Bitmain Adapted to ASIC-Resistant Algorithms

Bitmain is one of the most influential companies in the crypto mining industry, making over $3 billion in profits just in 2017. The ASIC manufacturer first built ASICs for Bitcoin and Litecoin algorithms. But recently Bitmain began creating new ASICs for algorithms that use to be ASIC-resistant, algorithms such as Equihash and EthHash.

These news ASICs started to affect blockchains that use Equihash and EthHash, including ZCash and Ethereum. GPU miners who give hash power to these blockchains have been seeing their profits decline, with ASICs easily overtaking graphics card installments.

Ethereum and ZCash have refrained from forking away from ASICs, creating a setting where GPU miners have had to withdraw from mining pools. This will only keep Bitmain in its position as leading manufacturer in the cryptocurrency mining industry and momentarily has no competitors.