In 2009, there was only one kind of imaginary internet money to scratch your head over: Bitcoin. Now there's Bitcoin, Bitcoin Cash, and soon, Bitcoin Gold. Lordy.
The trouble began earlier this year when a group of cryptocurrency upstarts cloned Bitcoin to create their own version, called Bitcoin Cash. The split, called a "hard fork," came after a long and acrimonious disagreement about how to get Bitcoin to handle more traffic failed to resolve amicably. Now, another group of Bitcoiners wants to create yet another version of the world's most popular digital money on October 25. They're calling it Bitcoin Gold.
Bitcoin Gold is taking aim at democratizing Bitcoin's lucrative infrastructure layer—"mining"—taking it out of the hands of giant firms and into the purview of at-home enthusiasts. The project was co-founded by Jack Liao, CEO of Hong Kong-based Bitcoin mining company LightningASIC, Bitcoin Gold's anonymous lead developer "h4x3rotab" told me. (LightningASIC also just so happens to sell the hardware this new market of miners will need.) The fork mainly seems to be a reaction to widespread ire directed at one Bitcoin mining giant in particular, China-based Bitmain. Bitmain was an important player in the Bitcoin Cash fork.
"The current situation, where one erratic company in a totalitarian jurisdiction that is very hostile to Bitcoin has near monopoly domination over the manufacturing and distribution of the mining hardware that is required for the security of the global network, is unacceptable to anyone who understands the importance of decentralization to Bitcoin," hx3rotab wrote me in an email. Hx3rotab also told me that he is based in China.
Bitcoin Gold is different from Bitcoin Cash and yet another upcoming fork—"Segwit2x," scheduled for November—because those versions address issues related to speeding up the Bitcoin network to handle more traffic. Bitcoin Gold is instead looking to cut more people in on the mining industry's profits.
Miners are people who build computers solely dedicated to crunching numbers in an effort to "solve" a block of data and receive a reward in cryptocurrency. These blocks are chained one after another to make up the blockchain, Bitcoin's ledger technology. In the early days of Bitcoin, anyone could mine the currency on their home computer. But since then, Bitcoin's hashing algorithm has been monopolized by specialized, powerful mining chips called ASICs and large mining firms. It's a multi-million dollar industry.