'Shitshow' to Success? Bitcoin Gold's Launch Has Been Anything But Smooth

Following user confusion and controversy, many in the bitcoin gold community, including developers, think the new cryptocurrency is running smoothly.

AccessTimeIconNov 15, 2017 at 9:00 a.m. UTC
Updated Sep 13, 2021 at 7:09 a.m. UTC
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An attack, a chain split and general chaos on social media aren't getting the developers behind bitcoin's latest fork down.

The bitcoin gold cryptocurrency, which split from bitcoin in October, at the time touting a new mining scheme, has had a rocky start since it launched its live network on Nov. 12.

Within the first day after its release, one of the network's mining pools, "pool.gold," suffered a denial-of-service attack that took it offline for an hour and a half. Shortly after, the blockchain split when pool.gold and another mining pool called Suprnova found blocks at the same time.

Eventually, one chain was ruled as the ledger of record, but not before mining was halted on the other chain and pool.gold reset, erasing funds for some unlucky miners.

"It's just been a mess with the opening – nodes not syncing and different heights of the blockchain and then restarting nodes and resetting and erasing miner's totals," said a bitcoin gold miner who wished to remain anonymous.

He added candidly:

"[It's] just a shitshow."

Still, observers might have a different reaction, as the difficulties appear to validate criticisms of the bitcoin gold developer team, which has come under scrutiny for deciding to set aside the first round of block rewards for the developer team.

Even MinerTopia, a crypto mining community that opened access to bitcoin gold, threw shade at the developers, tweeting, "It's been sad since the day it launched. Very poor quality devs. They made their money now and ran and left the mess to all the pool owners and miners."

'No pump and dump'

That said, many in the bitcoin gold community remain optimistic that these early issues will be overcome with persistence and ingenuity.

One of the main complaints in the aftermath of the pool.gold chain split, for example, came from miners wondering what happened to the bitcoin gold they had mined.

About $70,000-worth of bitcoin gold was lost in the decision to migrate to just one of the two chains, and in response, bitcoin gold developer Martin Kuvandzhiev said the miners who lost out are being given funds from the developer team's own "pre-mined" stake.

He told CoinDesk:

"The miners deserve it. The decision was taken to recover all the funds because this is the way to treat this kind of situation."

In this way, the developers behind the project argue the distribution shows their capacity to properly allocate the funds they set aside and that have proven so contentious.

Kuvandzhiev said 40 percent of the 100,000 bitcoin gold coins (less than 1 percent of the total 21 million) the development team mined before the network was opened to the public are available to be spent. And to spend any of the coins, four of six developers must sign a transaction.

As for the other 60 percent of the coins? Those are time-locked, meaning they are to be released gradually over the next three years for development costs.

"There's no way to pump-and-dump," Kuvandzhiev said. "We're taking all the measures required just to make sure we're doing the things right."

Room for enthusiasm

And although it's had a slow start, bitcoin gold does seem to be faring relatively well.

Yavor Todorov, a bitcoin gold developer who provides support for the cryptocurrency's miners, acknowledged that, despite the "chaos on social media," the network itself is stable.

More than 50,000 machines are mining bitcoin gold within a handful of mining pools, according to Kuvandzhiev. And crypto exchange HitBTC has begun supporting bitcoin gold trading, while wallet provider Coinomi has added support, hinting at early business adoption.

The bitcoin gold team also supports a core wallet, and hardware wallet provider Trezor released code that allows users to download the software to store bitcoin gold. Kuvandzhiev also expects Ledger, another hardware wallet provider, to add support in the coming weeks.

Furthermore, the development team is working with other exchanges and wallets to add support for the new coin.

According to the bitcoin gold block explorer, transactions are happening also, just not at regular intervals yet. An account that hadn't made a transaction with bitcoin for nearly seven years even claimed about $5 million-worth of bitcoin gold after its release.

Based on this early activity, the anonymous miner that spoke to CoinDesk said he expects everything to calm down and start running normally in the next few days, given what he positioned as the strength of the project's value proposition.

"I'm sure the people that are actually excited to have a bitcoin chain that's back to mining without ASICs will stick around," he said.

Finger pointing continues

But first, those on the development team have to settle the confusion and contention.

And that isn't looking easy. For one, scam wallets have popped up to bilk users; in response, the development team is currently doing reconnaissance to put together a list of known scams.

Secondly, on Monday afternoon, Todorov stated on the project's official Slack channel that Suprnova had gained 51 percent of the network's mining power, a centralization that bitcoin gold launched to eliminate.

And lastly, several users are incensed by a 0.5 percent "hidden fee" for mined blocks that Kuvandzhiev integrated into the mining pool software he developed.

According to Kuvandzhiev, he told miners about the fee, which could be manually removed from the open-source code, in Slack chats, but because he didn't list the addition in the GitHub code repository, some thought the addition was a trick.

Kuvandzhiev suggested the outrage was caused by the one mining pool that hadn't removed the fee line in the code. Either way, he has since merged a pull request to delete the fee altogether.

To him, however, the incident just goes to show how delicate a process launching a new cryptocurrency can be, and how transparency rules on the open, public ledger.

"For a single miner with one mining rig this [fee] is $1 per month, which is nothing I think," he told CoinDesk, adding:

"I hoped people will just appreciate that I have spent this time to make a product for them."

Seat belt image via Shutterstock


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