For the most part, the attention of bitcoin developers and investors is trained on next month’s hard fork. But a fork, which occurred today, has resulted in a price decline for the cryptocurrency. As of 16:11 UTC, the cryptocurrency is trading at $5,715.32, down 3.02 percent. (See also: Bitcoin Gold Will Fork The Cryptocurrency Again.)
The bitcoin gold fork is aimed at decentralizing mining operations, which is currently concentrated with companies able to afford expensive processing chips required for the activity’s intensive computations. Bitcoin gold aims to achieve this objective by using a different algorithm which uses cheaper graphics processing units (GPUs). The new algorithm will enable lay users to participate in bitcoin mining operations. (See also: The 6 Most Important Cryptocurrencies Other Than Bitcoin.)
Bitcoin gold has not had an auspicious beginning. Its website was down, after a DDOS attack, immediately after launch. Then its price declined. According to CoinMarketCap, bitcoin gold began trading at 20:00 UTC at $479.82. At 16:11 UTC, its price was $274.44.
The main reason for a decline in bitcoin gold’s price is lack of support from the bitcoin community. For example, Coinbase, the largest online wallet for cryptocurrencies, does not support bitcoin gold. In a statement yesterday, the San Francisco startup said the fork constituted “a major security risk.” “At this time, Coinbase cannot support Bitcoin Gold because its developers have not made the code available to the public for review,” the company wrote on its blog.
Another prominent voice, Marek Palatinus, CEO of Satoshi Labs, has questioned the cryptocurrency’s raison d'être. In a tweet, he pointedly questioned whether decentralization is achievable with bitcoin gold's algorithm, given that there are a limited number of companies that produce competitive GPU chips.
But others are not worried about such an impact of a fork. In an interview with Business Insider, Bob Summerwill, chief blockchain developer at Sweetbridge, said splits happen periodically in all open-source communities. "Having everyone collaborating in a single project is ideal, but sometimes there are genuine differences of opinion, and network effects are not enough to keep everybody together, so a group secedes," he said.