Home CryptocurrencyBitcoin Is Bitcoin Gold a Scam?

Is Bitcoin Gold a Scam?

by Matthew Harris
, Is Bitcoin Gold a Scam?

The question has been asked a lot over the past year and a half — is Bitcoin Gold a scam? With millions lost in the infamous BTG Wallet scam that Bitcoin Gold actually promoted on their website, albeit without knowing it was a scam according to company responses to the incident, the legitimacy of this altcoin has been questioned almost from the start.

Formed in October of 2017 after a hard fork of the original open source cryptocurrency Bitcoin, the initial purpose of Bitcoin Gold was to sort of “retool” the mining process. Bitcoin Gold developers believed that the Bitcoin mining process favored, and was being taken over by, major mining operations instead of individual miners.

Individuals attempting to mine Bitcoin quickly found that if they didn’t invest a huge amount of time and money into building their own powerful mining rigs, their computers simply couldn’t compete with professional rig systems and they were consistently getting passed by in the process. BTG’s founders thought that by adopting a new algorithm for the mining process known as a proof-of-work algorithm called Equihash, the new branch of Bitcoin would not disproportionally favor those professional operations.

At the time of the hard fork there were numerous ICO scams hitting the wallets of crypto-enthusiasts around the world, likely contributing to some of the trepidation around Bitcoin Gold. It also didn’t help that the project experienced a major security breach immediately upon launch, when a DDoS attack hit them with 10 million requests per minute and blocked legitimate traffic, sparking immediate tweet storms and backlash.

Barely a month later, the BTG Wallet scam happened and more than $3.3 million was stolen from unsuspecting users. The scam was implemented by the operators of a website at the time called mybtgwallet.com and the scheme, which was rather simplistic and really should never have worked, prompted unsuspecting users to submit their private keys or recovery info. In return, the hapless victims would be rewarded with the generation of their very own, brand spanking new Bitcoin Gold Wallets. However, shortly after entering their all-important keys, any hard earned cryptocurrencies in their wallets were siphoned off and sent to different addresses.

Somehow, the legitimate(?) owners of Bitcoin Gold even fell for the scam, tweeting links to the site and even placing one on their own site before discovering the ruse and removing them. But the damage had been done to user’s wallets, costing them at least $3 million in Bitcoin, $107,000 in Bitcoin Gold, $72,000 in Litecoin, $30,000 in Ether, and a huge ding to BTG’s reputation.

Then, in May of last year, Bitcoin Gold was hit with a 51% attack where assailants used superior computing power to falsify the currency’s ledger, resulting in online exchanges taking a loss of at least $18 million. Unfortunately, many of the popular altcoins are vulnerable to an attack like this and the possibility of another one on BTG has left investors nervous.

However, fast forward a year and with its tenacious longevity as well as a 40.9% price rise in just the last 30 days alone (sitting at $24.31 as of this writing, which I should note is a 56.4% decline from where it was sitting a year ago), are investors still leery about this altcoin?

In a word — yes.

Should you be?

I don’t know… I just work here.

Kidding aside, unlike so many ICOs and altcoins, Bitcoin Gold does not appear to be an outright scam. While concerns of the past are indeed legitimate and should be heeded, I find nothing to indicate that the founders are on a path of deception or illegal activity. But of course, as I always do, I implore you not to ever take my word as gospel for anything related to investing in cryptocurrency.

You have to do your own homework! Research potential investments fully before dropping a single dime with them. Search for user comments, complaints, and discussions on various boards and social media platforms. However, even then you have to remember that things can quickly turn south in this industry. Exchanges go under, wallets get hacked, DDoS and 51% attacks happen, and people make mistakes.

Do your due diligence.

Disclaimer
Content provided by CryptoTraderNews is for informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. All information is of a general nature. As always, there is risk with any investment. In exchange for using our products and services, you agree not to hold CryptoTraderNews Pro, its affiliates, or any third party service provider liable for any possible claim for damages arising from decisions you make based on information made available to you through our services.

Related Posts

>