So it's 2017 and whether you use bitcoin in your everyday lives, for future investment or don't know enough about it to use it we've all still at least heard of it!
Bitcoin was the first of its kind and remains today as the major player in the crytocurrency market, if you've never really bothered with cryptocurrencies you might be surprised to realize that bitcoin isn't the only cryptocurrency in the market there are others too such as ethereum, ripple, litecoin, monero and dark coin plus hundreds more but none have yet overcome bitcoin in market share. In Newyork you can buy coffee from street cafe's using your bitcoin, buy groceries even but not everywhere has taken to it equally, people are still suspicious but despite this there are some steps forward being made, bitcoin ATM's are starting to appear on high streets and in convenience stores around the world you can even check google for the location of a bitcoin ATM near you where you can load up your bitcoin wallet with regular cash or transactions.
But did you know the bitcoin system isn't perfect? The bitcoin system does change gradually when everybody in its development system agrees, if there isn't unanimous agreement to the changes then they are simply not added to the system. But what happens when somebody is so sure a change is a good idea that they want it implementing whether everybody agrees or not? A hard Fork thats what!
So What Is A Hard Fork?
Well a little bit of background first, the bitcoin system works through blockchain technology, where bitcoin mining creates new blocks and each block can hold 1MB of transaction data which worked really well until the system hit an invisible wall. This occurred because so many transactions were happening that the miners couldn't produce enough new blocks to store all of those transactions so the system ground to a halt and slowly recovered over the course of a few days. During this time transactions were taking hours, even days to resolve on the network and alarm bells started to ring. The bitcoin system needed and upgrade and so one was suggested, the new upgrade would allow the blocks to be scalable in size so rather than a block being able to only hold 1MB of transaction data, over time these could be scaled up to 8MB size blocks that could hold more data and absorb the effects rapid transactions but not everybody was in agreement that this would be the best way to move forward and this is where a hard fork happened in the bitcoin system.
On the 1st Aug 2017 the bitcoin system stopped trading for a few hours while a copy of its blockchain happened (the blockchain contains every transaction ever made by the bitcoin system). Bitcoin started trading again as normal but the copy of the blockchain produced a completely new currency which was to be called "bitcoin cash" It has all of the original history of bitcoin but it was free to implement its scaling block size feature. If you owned any bitcoins at this moment in time, you got to keep your original bitcoins but because this new currency copied the original blockchain it meant that you got that same amount of coins in the new currency too.
So on 1st Aug 2017 if you had just 1 bitcoin its value was $2,735.59 at close of trading, now when the fork happened you kept that bitcoin(BTC) but also gain 1 coin of bitcoincash(BCH). Fastforward a couple of months and as I write this the value of this new currency is $322.14 per coin of bitcoin cash(BCH) so you would have gained that for doing absolutely nothing. (not to mention that the value of the original bitcoin(BTC) is now worth $6080.42 so if you did have just 1 bitcoin back then you would have more than doubled your money in the space of a couple of months!)
And What Does This Have To Do With Raspberry Pi's?
Well the process of making new blocks on the blockchain happens when a bitcoin miner successfully solves SHA256 hash algorithms which means that anybody with spare computer time can dedicate it to solving these algorithms, producing new blocks and in turn earning some bitcoin for the effort. Of course Raspberry Pi's were soon on the scene and for a relatively small investment people could have a dedicated bitcoin miner which worked 100% of the time contributing to the bitcoin system and earning them bitcoins as they slept! People started setting up distributed computing systems and Raspberry Pi cluster to gain the upper hand but it wasn't long before other technology took over in the name of FPGA's. People realized that SHA256 algorithms could be solved orders of magnitude faster using dedicated FPGA's which meant that slower systems li9ke Raspberry Pi's stood no chance of competing and soon bitcoin mining on processor based system became a worthless fruitless endeaver.
FPGA mining became so popular that the big players got together and developed a custom ASIC to do the job of mining, where a processer can mine 5-10MH/s the custom ASIC's can mine 5-10TH/s which is pretty much a million times more per second than processor based systems.
The original idea of bitcoin was for it to be a decentralized currency where no 1 person or collective of people can make changes that would restrict its normal value but as less and less people are contributing towards bitcoin mining because of these big players its soon going to leave just a consortium of large organised ASIC based bitcoin miners who would then have the ability to increase or restrict the flow of bitcoins into the market thereby gaining control over the value of the currency. By controlling the system they could decide how many blocks to add into the blockchain and control the rate of transactions.
In an attempt to restore this de-centralization a new hard fork is going to occur (planned for 25th October 2017) to create a new currency called bitcoin gold(BTG) where the major change will be the algorithms that need resolving to create new blocks on the blockchain, the original bitcoin will still exist and as before you keep your original coins but also gain that same amount of coins in the new currency.
So What Are These Changes And What Does They Have To Do With Raspberry Pi's?
Well the new coin Bitcoin Gold(BTG) aims to make mining bitcoins a more level playing field once again by using Equihash mining rather SHA256 mining. Equihash mining is more complex and requires more memory based solutions transferring values backwards and forwards which should take away some of the advantage of using ASIC's. Its thought that using an equihash based system normal processors will be able to mine at around 10-30H/s and FPGA/ASIC systems will mine at around 1000-3000H/s so the ASIC based systems will still have an advantage but only in the order of about 100 times more per second rather than the million times it is with SHA256.
And what does it have to do with Raspberry Pi's? well if this new cryptocurrency takes off we should start seeing more people mining bitcoins with processor based systems again and renewed interest in Rasberry Pi based bitcoin miners if you have one sat collecting dust in a drawer maybe you should think about mining Bitcoin Gold(BTG) with it while you sleep!
Will Bitcoin Gold Take Off?
Bitcoin gold isn't the only hard fork coming up, theres also the segwit2x/BTC1 fork approaching too and with a previous hard fork Bitcoin Cash it means that there are a lot of cryptocurrencies appearing based upon the original bitcoin which I think we can agree will always be there but who knows if these new currencies produced by hard forks are going to stand the test of time. I suppose it depends on whether people actually use them, invest in them and most importantly whether their promises work out. All it takes is for somebody to create an FPGA/processor hybrid that can gain huge advantage over normal processor based system again to sink the dreams of Bitcoin Gold. We'll have to wait and see!
Do you have any thoughts? Is it going to work out? Do you want to hear more about bitcoin and cryptocurrencies? Leave your comments below!