Bitcoin forks again to launch Bitcoin Gold, as cryptocurrency evolution accelerates

25 October 2017 11:49am

24 October 2017. By Toko Sekiguchi.

In a measure of the speed with which virtual currencies are evolving, the world's most popular cryptocurrency branched off into another blockchain once again today, creating Bitcoin Gold — a-half day ahead of schedule due to a surge in Bitcoin-mining speed. The move comes after the currency's first split that began in late July.

A group of Bitcoin miners led by Jack Liao, CEO of Hong Kong mining firm LightningASIC, announced they would fork Bitcoin when its blockchain reached a certain block height, which was originally scheduled for Oct. 25. The split diverges from the original chain, creating a new cryptocurrency called Bitcoin Gold, according to the Bitcoin Gold website.

"The purpose for doing this is to make Bitcoin mining decentralized again," the website said, adding that the new fork will make powerful mining machines useless for mining Bitcoin Gold, putting power back in the hands of people where "a miner would be any geek with a computer."

Bitcoin owners are to receive on Nov. 1 an amount of the new cryptocurrency equal to the amount of Bitcoin they already own at the moment of the fork today.

The increase in the mining speed, known as the hash rate, accelerated the blockchain building, causing the fork to occur half a day before the scheduled launch.

The price of Bitcoin reached an all-time high of $6,000 last Friday.

In Japan, where cryptocurrencies are regulated by law, many currency-exchange operators newly registered with the country's Financial Services Agency, or FSA, are cautiously monitoring the development, MLex has learned. Some, such as bitFlyer, will be issuing the new currency and allowing for its trade from Nov. 1, once its security has been assured.

Others, such as Fisco Cryptocurrency Exchange, said they have no plans either to issue or trade in Bitcoin Gold.

Unlike during the previous Bitcoin split that began in July, the Japan Cryptocurrency Business Association doesn't plan to coordinate industry action due to the small scale at this stage of the new currency and questions regarding its security, JCBA's Director General Shinobu Oguchi told MLex.

"This time around, the new currency appears to profit only a small number of miners involved," Oguchi said, adding that exchange operators are taking a wait-and-see approach to how the latest Bitcoin fork plays out before adding Bitcoin Gold to their trading portfolios. Under the FSA law, registered exchanges must report to the financial regulators when they begin trading in new cryptocurrencies.

Oguchi said that the bigger concern lies in the growing trend of splitting cryptocurrencies, encouraged by the success of Bitcoin Cash, doubling and tripling the price of Bitcoins in a few weeks' time.

"There are those who are trying to make quick money by setting off these hard forks," Oguchi said. "That's more worrying to us."

Fintech Regulation in 2018