BITCOIN GOLD: DECENTRALIZING CRYPTOCURRENCY MINING WITH YOUR GPU

emmanuel250998 (53)in #bitcoin • 8 years ago

Decentralization has been one of the cornerstones of blockchain technology since its inception. Bitcoin's aim, since its conception, was to give people back power over their finances, and that they should not have to rely on intermediaries (centralized entities) to carry out financial operations.

This decentralization also sought to remove the power of coin issuance to a specific country: the production of cryptocurrencies and verification of the chain of blocks is the responsibility of the community itself.

To be part of this process it was only enough to have a computer, download the chain of blocks and run the node. In this way, anyone anywhere in the world could participate in the verification process. Anyone with a CPU could take part in Bitcoin mining.

However, as Bitcoin grew and became more massive, several companies began to develop specific mining equipment (ASIC) which, being much more efficient, reduced the number of users who could engage in mining in a productive way. These computers, much more expensive than ordinary computers, are less accessible to the community around the world.

As mining equipment acquisition becomes more difficult, decentralization begins to falter. However, another factor contributed to further centralising the verification of the block chain, this time geographically.

From very early in Bitcoin's history, mining pools emerged, companies that bring nodes together to increase processing power and then divide profits. The first pool to be created was Slush Pool, in December 2010. However, the problem is not the existence of mining pools, as they exist even in decentralized currencies such as BTG.

Many more soon emerged and, for at least two years, the largest volume of transactions are processed by pools located in China. Currently, more than 50% of Bitcoin's processing power is hosted in the Asian country, shared between BTC.com, AntPool and ViaBTC.

This concentration of more than half of mining in a single country directly threatens the decentralization sought by the first cryptocurrency of the market and was an obstacle, moreover, during the discussions around the scalability of the network. The main representatives of the companies that dominated the ecosystem opposed the implementation of the SegWit protocol, which distributes information more efficiently in the block and reduces the cost of commissions.

From this opposition, came the altcoin Bitcoin Cash, with larger blocks (8MB) that further reduce the number of people who can acquire the necessary equipment to run the nodes.

BITCOIN GOLD ENTERS THE SCENE TO GIVE PEOPLE BACK THE CHANCE TO MINE BITCOIN AGAIN AND THUS CREATE A TRULY DECENTRALIZED NETWORK

Around October 2017, a group of community developers decided to join together to branch Bitcoin's network, changing the mining algorithm so that specialized teams cannot process their transactions and mining is again decentralized.

As its slogan indicates, the goal of this coin is for the whole community to be able to participate in both mine action and decision-making. In addition, the team behind Bitcoin Gold since before the launch of its network has conducted reward programs aimed at attracting the best developers to work with them. Just as anyone with a CPU or GPU can participate in transaction processing and decision making, anyone with knowledge can participate in network development and improvement.

About this, Alejandro Regojo, Bitcoin Gold's project manager, says the following:

"Satoshi Nakamoto-san's idea was to implement a voting mechanism, which he called 1CPU1VOTE; we believe it is fair, in the sense that anyone around the world can buy hardware (CPU or GPU) to mine."

Alejandro Regojo
Project Manager, Bitcoin Gold

The emergence of this new currency, therefore, plays a fundamental role, as it recovers this very important element in what has become known as the "internet of money".

Chris Dixon, an ecosystem character who has studied the social implications of the Internet and the benefits of cryptocurrencies, explains in an article the three eras of the Internet, from its decentralized origin to the appearance of digital assets, passing through the period of centralization in the main North American companies (Google, Apple, Facebook and Amazon).

In the text, Dixon points out that it is more helpful for developers to work on decentralized projects, because there is no way for the rules of the game to change without the consent of everyone involved.

In the case of a network that concentrates the greatest processing power in a single country and a few companies, they can make the decision to make changes that are not accepted by the rest of the ecosystem, such as the attempt to implement the SegWit2x protocol, which was eventually cancelled.

In this way we see that Bitcoin Gold recovers that initial sense of the cryptomoney, because as Dixon says: "cryptonetworks combine the best characteristics of the first two Internet eras: decentralized and community governed networks with capabilities that will eventually exceed those of the most advanced centralized services".