Author : dani kurnia 1 week ago 23 17
Bitcoin Gold Will Get Delisted From Bittrex on September 14th
07. Sep 2018 Posted by Akolkar B on News
Popular cryptocurrency exchange Bittrex has announced that it would be removing Bitcoin derivative - Bitcoin Gold (BTG) from its platform on September 14th, next week. One reason that has influenced Bittrex’s decision is the $18 million hack of BTG network in May 2018.
The Bitcoin Gold was created in line with Satoshi’s vision of One-CPU-one-vote with an aim to reduce the dominance of ASIC miners, and give power equally in the hands of all. ASIC - Application Specific Integrated Circuits - are specialized hardware that can perform SHA 256 calculations faster and efficiently than an average computer.
On the other hand, BTG employs a Proof-of-Work (PoW) algorithm Equihash protocol. It allows for a fair and accessible mining opportunity to all using casual graphics processing units (GPUs). The Bitcoin Gold whitepaper notes: “Satoshi’s vision of ‘one-CPU-one-vote’ was replaced by one-ASIC-one-vote… ASIC-resistance is a permanent attribute of Bitcoin Gold. It is much more difficult to create ASICs for a memory hard algorithm like Equihash than SHA256, however it is not impossible. If the day ever comes when Equihash ASICs begin to proliferate and mining begins to centralize again, Bitcoin Gold will have another hard fork to implement a new PoW algorithm.”
Bitcoin Gold’s Rocky Ride
Bitcoin Gold (BTG) has been through a bumpy ride since the very first day of launch on October 24, 2017. On the first day itself, the BTG blockchain network experienced a security breach. The BTG team later clarified site was experience huge requests blocking out the legitimate traffic.
Additionally, the BTG community agitated on the fact that nearly 100,000 BTG tokens were already premined. However, the developer community clarified that they were set aside as part of bonus for the team.
Just like all other previous Bitcoin hardforks, the BTG hardfork would give equal number of BTG token to all the BTC token holders. However, many of the cryptocurrency exchanges like Coinbase, Poloniex and Kraken did not participate in this giveaway plan, meaning they decided not to support BTG on their platform.
Coinbase said: “Information about this fork has been limited and there are concerns about its security and stability. As a result, we do not believe it is safe to allow support for Bitcoin Gold at this time.”
Moreover, there were many other flaws discovered with respect to the launch of BTG’s blockchain network. It was found that the network did not support ‘replay protection’ safety feature which makes sure that transactions of one chain are invalid on the other. However, it was resolved later.
Bittrex Gambles By Supporting Bitcoin Gold
Although Bittrex had earlier extended its support for Bitcoin Gold prior to the fork, it had warned its customers of several shortcomings associated with the digital currency. The exchange stated that Bitcoin Gold didn’t posses “fully formed consensus code; [an] implemented replay protection; adequate code for testing and auditing; publicly known code developers.”
It also reminded its customers of the premine issue stating “Bitcoin Gold codebase also contains a private premine of 8,000 blocks (100,000 BTG). Please be aware that if a market does open, there is a possibility of the developers selling their premined BTG on the open market.”
Since then multiple attacks on the Bitcoin Gold network and website has caused a growing suspicion over the coins ability to sustain. Although the BTG has managed to swim the waters and overcome the issues, they somehow seem to have failed in creating enough confidence among investors.
Bittrex’s final decision to part way with Bitcoin gold arrived after the largest attack on BTG network in May 2018. It was reported that hijackers had managed to amass $18 million from several exchanges, Bittrex being one of them.
The Bitcoin Gold team released a statement saying that the attacker were using a double-spend and 51-percent attack to defraud the trading platforms. The BTG team said that the attackers targeted exchanges because they “accept large deposits automatically, allow the user to trade into a different coin quickly and then withdraw automatically.”
These defrauders made huge deposits of BTG tokens on the exchanges while simultaneously sending their funds to their own crypto wallets. Until the exchanges realized that these transactions were fake, the hackers had already withdrawn their multiplied funds.
Bittrex Claims Compensation
Although Bittrex didn’t disclose the amount lost as part of BTG attack, they requested a refund of more than 12,000 BTG worth $255,000, as part of the compensation from Bitcoin Gold team. The Bittrex exchange claimed that it was the flawed PoW algorithm of the BTG network which resulted into double-spending attack.
The Bitcoin Gold team denied taking any responsibility of the attack saying that their team “is not responsible for security policy within private entities like Bittrex,” adding that the exchanges “must manage the related risks and are ultimately responsible for their own security.”
Although the BTG developers have acknowledged the risks with their blockchain network and issued an upgrade plan, the damage is already done and irreparable. Bittrex has finally decided to delist BTG from its exchange platform, while receiving approval from several Reddit users.
The Bitcoin Gold development team has issued a statement saying: “Bittrex informed us that they make this decision because the BTG team would not ‘take responsibility for our chain,’ and that taking responsibility meant paying Bittrex 12,372 BTG to cover the loss they incurred. They later informed us they would cover part of the loss from their own BTG reserves and requested we pay the remaining ~6,000 BTG ($127,000), and that if we did not, we would be delisted.”
Things remain unclear whether other exchanges will be following the same path. However, the downfall of Bitcoin Gold in 2018 has been very fast. The Bitcoin Gold marked cap has reduced to a mere $321 million from over $2 billion during the end of 2017.