What is Bitcoin Gold (BTG)? Bitcoin Gold vs. Bitcoin Cash

Bitcoin Gold (BTG): Creation, Controversy, and How it Stacks up to BCH

Any conversation about cryptocurrency has to start with Bitcoin. It was the first crypto (it’s been around since 2009), it is the most valuable (worth over $1 trillion), and it’s the most traded (over $60 billion in daily volume). It also has the most spinoffs, or “forks,” that have become widely-used cryptos in their own right.

Perhaps the most well-known forks are Bitcoin Cash (BCH), which came out in 2017, and Bitcoin Gold(BCG), which was the product of a fork from Bitcoin a few months later.

What is Bitcoin Gold?

Bitcoin Gold was a hard fork from Bitcoin with the intent of further decentralizing Bitcoin. The idea was to use a new algorithm for the mining process that would not prioritize major mining operations, as some believed Bitcoin did.

Bitcoin Gold was an implicit criticism of Bitcoin, essentially arguing that it had betrayed or at least strayed from its initial roots as a decentralized currency with its increasingly centralized mining operations. Even if anyone can buy Bitcoin, it’s much harder (or at least not profitable) for anyone to create it.

Developers wanted to make it easier for normal computer users to mine on their own machines, a contrast to the massive Bitcoin mining industry, which is mostly done on specialized computer equipment purchased and operated by big-time operators in places like Iceland, where electricity is cheap. With Bitcoin Gold, however, the humble graphics card could carry the load.

Bitcoin Gold Controversy

Bitcoin Gold has been controversial almost since its inception. Typically with hard forks, owners of the initial cryptocurrency also receive units of the new one. For example, when Bitcoin Cash forked from Bitcoin, all Bitcoin owners got Bitcoin Cash.

When the Bitcoin Gold fork occurred, on the other hand, Bitcoin owners did not immediately get their new cryptocurrency. Instead, developers kept the Bitcoin Gold blockchain private for a few weeks so that they could mine BTG without competition—which they described as a “premine”. Critics opposed this practice, as it left fewer coins available for others to mine and also amounted to “free money” for the BTG developers.

As a result, cryptocurrency exchange and service provider Coinbase said it would not support BitcoinGold, explaining that because developers hadn’t made the code available for review by the public, it posed a security risk.

BTG Security Issues

Bitcoin Gold was worth over $8 billion when it launched, but fell dramatically in value as security issues emerged.

BTG has experienced multiple “51% attacks,” where an entity or individual or hacker is able to do the one thing that cryptocurrency is supposed to prevent: take control of transactions and “double spend” them, essentially stealing money. After one of the attacks, Bitcoin Gold was delisted from some exchanges.

In 2020, the developers behind Bitcoin Gold were able to fend off another attempt on the cryptocurrency’s network.
In early March 2021, the Bitcoin Gold team posted on its blog that its “hibernation has come to an end”—the 51% attacks that plagued the coin last year were ultimately defeated by the BTG miners and community.

What is Bitcoin Gold Worth Now?

Bitcoin Gold is ranked 73rd among cryptos according to CoinMarketCap (as of late April 2021) and has a total value of around $1.6 billion and a value per coin of around $90. Bitcoin Gold’s value was over $470 per coin at least twice in 2017, but has been under $100 since early 2018.

Bitcoin Gold vs. Bitcoin Cash Value

When comparing Bitcoin Gold vs Bitcoin Cash, the numbers speak for themselves: the original fork has a total value of almost $11 trillion, volume of almost $3 billion, and a value per coin of over $500. Bitcoin Cash is about 87 percent from its absolute peak value but is still substantially more valuable than its forked cousin on a “per coin” basis, at least so far, when it comes to Bitcoin Cash vs Bitcoin Gold, Bitcoin Cash is winning.

How to Invest in Bitcoin Gold

Bitcoin Gold is not available to buy and sell on mainstream exchanges like Coinbase, but, according to its organizers, it is available to trade on exchanges like Binance and Bitfinex.

The Takeaway

Bitcoin Gold is yet another hard fork of Bitcoin, like Bitcoin Cash. What distinguishes Bitcoin Gold is its intent: To further decentralize and democratize mining, making it more accessible to individual miners, rather than large groups with massive computing power.


SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOIN21136

Read more
A Brief History of Cryptography

A Brief History of Cryptography

Who doesn’t love a good secret code? Cryptography is the science of secret codes—of creating a language or code that can’t be cracked unless one knows exactly how to decode it.

Today, cryptography is used for everything from internet cybersecurity to blockchain technology and cryptocurrency investing. It has evolved and advanced over time along with technology, but it got its start in ancient times, with hieroglyphs and cuneiforms.

Let’s look back at the history of cryptography and how it has evolved over the years to serve different functions with the same goal—securing information.

What is Cryptography?

Cryptography is the process of securing information by changing it into a form that people can’t understand unless they know how it was encoded. The original information is known as plaintext, and the encoded version of the information is known as ciphertext. The calculation or code used to change plaintext into ciphertext is called an algorithm and the process is called encryption. The opposite of encryption is decryption—turning ciphertext back into plaintext, or another readable form.

In order for someone to decode the information, they need to know how to read it or change it back into its plaintext form. Usually decryption involves both the algorithm and a key. Generally this key is a number.

Ancient History of Cryptography

The history of encryption dates back thousands of years. The earliest known use of cryptography was over 5600 years ago in Sumeria and Egypt. Cuneiform and hieroglyphics were created to record transactions. These were not necessarily intended to be secret, but were forms of writing down information that someone wouldn’t know how to read unless they understood the language system. It took hundreds of years for these early forms of writing to be deciphered by other societies.

Early forms of encryption all used a key that had to be given to the recipient in order for them to be able to decipher it. This is known as symmetric encryption, because the same key is used for encryption and decryption. The following are several examples of ciphers that use symmetric encryption.

Caesar Box

Julius Caesar used cryptography around 100 BC to send messages to his military generals, encrypted to be protected from opponents who might intercept it. The “Caesar Box,” or “Caesar Cipher,” was easily decrypted by those who knew how, but it protected messages from unintended eyes.

The Caesar Cipher is what is known as a “substitution cipher” or “shift cipher.” It works by changing each letter within a message three letters, to the right. For example, an A in a message would become a D, and a B would be written as an E. The number of letter places that get shifted is called the key. In this case the key is three.

Since there are only 26 letters in the English alphabet, shift ciphers like the Caesar Box are easy to figure out and not very secure forms of cryptography. Once mathematicians figured out that certain letters are more commonly used than others in a language, they understood that people trying to crack the code could start to recognize patterns and figure it out.

Scytale Cipher

The Spartans developed a different type of encryption known as the Scytale Cipher. It was made by wrapping parchment around a pole then writing on the pole length-wise. When the paper is removed from the pole, the message is encrypted. To decipher it, one needs to know the pole’s diameter. The Scytale is less easy to decipher using patterns like the Caesar Box, but it can be possible to read some of the words on the pole.

Vigenère Cipher

The Vigenère Cipher was created by an Italian named Giovan Battista Bellaso in the 16th century. It uses a key as part of the decryption process. The key can be any combination of letters or a word of the message writer’s choosing. The key is matched to the plaintext and used in the process of decrypting the secret message. It’s much more difficult than the Caesar Box because each letter of the message has its own shift value. Therefore, even solving one word in the message won’t reveal the entire message.

Using a key adds an extra layer of security to a cryptographic message. The cipher wasn’t solved until 1863, and became known as le chiffre indechiffrable, or “the indecipherable cipher.”

Vernam Cipher

The only cipher that has been mathematically proven to be unbreakable is the Vernam Cipher, otherwise known as a one-time pad (OTP). It’s similar to a Vigenere Cipher but the key changes with each use. The Vernam Cipher isn’t used widely today due to the challenges of distributing the keys, but it is useful for emergency situations in which there is no electronic option.

Enigma

The Enigma is a type of cryptography using rotary encryption, which was developed by Arthur Scherbius in Germany during WWII. Similar to other cryptography, it was created using disks that were put into a machine in a certain order. If they were inserted in the correct order, the machine would decode the message.

An early computer developed by British cryptanalyst Alan Turing and his colleagues helped to crack the Enigma code. It’s estimated that their work helped save as many as 21 million people.

Asymmetric Encryption and Modern Cryptography

The advent of computers made it essential to develop more advanced forms of cryptography in order to keep data and information safe. This was especially the case as financial transactions began to move to computer networks. Everything from email to ecommerce sites to phone apps use encryption today.

The world of cryptography is also getting more complex due to its use by terrorists and criminals, as well as legal structures which protect individuals’ data. The U.S. Government and tech companies like Apple have been in legal battles for years to determine the ethics around data and privacy.

Most modern cryptography uses asymmetric encryption, or public-key encryption, in which there is a separate lock and key. This allows people to share public keys openly while keeping the private keys secure.

Here are some examples of asymmetric encryption.

Morse Code

Samuel F. Morse developed the Morse Code to transmit messages through telegraph machines in 1835.

The Zimmerman Telegram

The U.S. entered WWII with the decryption of a message solved by the British Intelligence Agency. The Zimmerman Telegram was sent from the German Foreign Office in the U.S. to the German Ambassador to Mexico and proposed a military alliance between Germany and Mexico.

Lucifer/DES

IBM developed a system called Lucifer in the 1960s, which was ultimately adopted by the U.S. National Bureau of Standards and is also known as the Data Encryption Standard (DES).

RSA

The RSA encryption system created in the 1970s was one of the first uses of asymmetric encryption.

Salt

One tactic used in encryption is called salting. This is where a random string of alphanumeric characters gets added to the end of the password before it’s encrypted. Salting adds extra security because even after the password gets decrypted, the “salt” has to be subtracted before it can be used. Even very obvious and common passwords can be difficult to figure out when they are salted.

Advanced Encryption Standard (AES)

Today’s default encryption mechanism used by the U.S. government is the Advanced Encryption Standard, or AES. It uses a 256-bit key and multiple rounds of encryption, known as substitution-permutation networking. AES has mostly replaced the formerly used Data Encryption Standard, or DES, which is now considered to be less secure.

Other Forms of Encryption

There are countless other forms of encryption. Some of the commonly used ones are:

•  Triple DES
•  Blowfish
•  Twofish
•  ElGamal
•  Hash Functions
•  Diffie-Hellman Key Exchange

Cryptocurrency and Cryptography

Cryptography is an integral part of blockchain technology and cryptocurrencies. Transactions and balances are tracked on a ledger and encrypted using complicated algorithms. This helps with security, transparency, and tracking. Crypto wallets also rely on cryptography for security.

Each type of digital asset or cryptocurrency has its own form of cryptography, making some more secure or popular than others and providing different use cases. Before investing in cryptocurrencies, it’s important to have at least a basic understanding of the way the technology works, especially the use of public and private keys. This could help decide which cryptocurrency to invest in and ensure that the transaction and digital asset storage is done securely.

The Future of Cryptography

As time goes on, it gets more and more challenging to maintain secure encryption of information. Computers and hackers get more sophisticated, and even the most impenetrable codes can be cracked using psychological tactics and social engineering.

Two tools that help increase security are two-factor authentication (2FA) and Honeypots. Each of them works slightly differently, though with the same goal.

•  With 2FA, the user must input a code retrieved from a text message or app on their phone in addition to their password. This means that an account can’t be accessed without access to the individual’s phone.
•  Honeypots trick attackers by creating false data that looks real and then alerting organizations when the attackers attempt to do a hack.

A newer form of cryptography is called homomorphic encryption. This attempts to solve one of today’s major cryptographic problems: the fact that data cannot be processed while it’s encrypted. This means that data has to be encrypted before it can be used for anything, making it vulnerable during that processing time. Homomorphic encryption allows users to process data while it’s encrypted, and then simply decrypt the final result.

The next wave of encryption will likely involve the use of quantum computers and post-quantum cryptography. These add layers of encryption beyond today’s capabilities. However, this technology is still in development.

The Takeaway

The history of cryptography is long and fascinating, and the technology has gotten more essential and complex over time. In today’s world, cryptography underpins everything from social media to financial transactions. That’s why it’s so important to make sure you keep your data and information safe using strong passwords, two-factor authentication, and other tools.


SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOIN21087

Read more
TLS 1.2 Encrypted
Equal Housing Lender