Bitcoin Gold (BTG) hard forked the Bitcoin blockchain at block #491407 to create an alternate chain, where miners can use GPUs instead of single-purpose ASICs for mining. BTG also introduced some improvements like bigger blocksize and shorter time between blocks for higher transaction bandwidth.
While the whole motivation behind BTG seems to be profit, especially for the developers, who have been widely and loudly criticized for that, I personally don’t think this was necessarily a bad move. In the end every holder of Bitcoin got the same amount of BTG. So, theoretically, a lot of value can be created here.
However, through the lens of security, the picture is very different.
For those not familiar with the matter lats recap what hard fork means:
- every transaction up to block #491497 is copied, meaning:
- every Bitcoin address at that point is also BTG address
- every private key is the same
- every address has the same value (numerically)
This means, that if you want to spend your BTG you can use the same password, or private key, that you use to spend Bitcoins.
You probably know what’s coming:
It means that if someone would program a very comfortable wallet that phished your private key, he could instantly access your Bitcoins as well, since both private keys are necessarily the same. (Hard fork). That’s a huge security risk!
what can you do:
- Wait! Wait till a trusted BTG wallet emerges, then use it.
- If you cannot wait, but want to get into the possible fire sale of BTG now, transfer your Bitcoins to a new address with a new private key before accessing your BTG
I know that transfering your Bitcoin might be hard. They might be on a paper wallet, or on a wallet encrypted somewhere.
I’m also not saying that BTG’s wallet is a huge phishing scam. Actually I believe they did all they could to make that secure.
Still there is an inherent security risk here. And, at that, one that affects every single Bitcoin address out there.