Bitcoin Gold Fails To Impress Investors

bitcoin gold failed to impress investors

Bitcoin Gold, a fork of Bitcoin that aims to democratize mining, has thus far failed to win over investors, its futures dropping to an all-time low the day after its software client went live.

Futures for this altcoin, which is very similar to Bitcoin but allows a wider range of processors to be involved with mining, fell to as little as $218.34 today on CoinMarketCap, a more than 50% decline from the all-time high of $509.81 they reached on November 11.

At the time of report, Bitcoin Gold futures had recovered modestly, trading at $268.61, additional CoinMarketCap figures show.

Analyst Concerns

Going forward, Bitcoin Gold might fail to distinguish itself as a meaningful digital currency, some analysts warned.

The basic idea behind this cryptocurrency is making a truly decentralized digital asset by spreading out mining, and therefore control.

Having digital currencies that are too centralized is a valid concern.

Bitcoin can only be mined using application-specific integrated circuits, and since this hardware is costly, Bitcoin mining has become centralized, falling under the control of large mining companies.

Many industry participants have warned that this situation provides these mining firms with too much sway over the digital currency’s future direction, according to CoinDesk.

While Bitcoin Gold’s intention of spreading out control of mining sounds like a noble one, Tim Enneking, managing director of Crypto Asset Management, asserted that this goal may very well fail to materialize.

“Miners control too much of the space to allow Bitcoin Gold to be successful – at least in the near term,” he said.

Jacob Eliosoff also threw cold water on Bitcoin Gold’s prospects. “It sounds pointless,” he stated.

“To be fair, I didn’t think Bitcoin Cash had much of a future either, but at least it had a clear raison d’etre and a few serious devs – Séchet has done a great job,” stated Eliosoff, referring to Amaury Séchet, a former Facebook engineer and vocal advocate of Bitcoin Cash.

“As best I can tell, BCG has neither and I predict it will go nowhere,” he said.

Enneking stated that if the crypto space operated as a “true democracy,” Bitcoin Gold’s value proposition of democratizing mining might be enough to drive demand for the digital currency.

Previous Challenges

Market observers have good reason to be concerned, as Bitcoin Gold has already encountered several snags.

Shortly after the hard fork took place, the digital currency’s website became the target of a distributed denial-of-service attack, which prevented it from functioning, according to Motherboard.

Bitcoin Gold also suffered difficulties when the software became available, CoinDesk reported. Shortly after developers published this software, some users claimed they received emails containing links to fake email clients. Other users reported having a hard time connecting their computers to other nodes on the network.

Unless Bitcoin’s latest fork can succeed in overcoming these difficulties and offering a compelling value proposition, it may have a difficult time drawing the interest of investors.