Bitcoin Gold, the newest currency to split from the Bitcoin blockchain, has found a solution to ensure safer transactions. Its developers have added two-way “replay protection”, to prevent loss of funds when the same transaction is accidentally (or deliberately) broadcast to two different networks.
Bitcoin Gold (BTG), like Bitcoin Cash before it and any other fork away from the main chain, uses almost-identical address formats and network protocols to original Bitcoin. Without protection, sending a transaction on one network could easily see it broadcast to the other.
The Bitcoin Gold project aims to bring mining back to its roots — it wishes to make Bitcoin decentralized again by resisting mining by ASIC machines and returning it to GPU mining rigs. However, companies that own large-scale ASIC farms also have large reserves of GPUs, which are common graphics cards used by gamers.
How Bitcoin Gold’s Replay Protection Works
Developers have created a solution that prevents loss of funds while sending money to one fork. It is called SIGHASH_FORK_ID replay protection. This new feature does not validate new Bitcoin transactions on the Bitcoin Gold blockchain, and vice-versa. Hence, a Bitcoin Gold transaction will also be invalid on the Bitcoin blockchain.
The new feature applies a new algorithm that calculates the hash of a transaction to identify which chain it belongs to.
Github user Shelven Zhou committed the following changes three days ago.
- Add SIGHASH_FORKID, a 2-way replay protection
- Add fork id to legacy tests and add replay attacks
- Add fork id to regtests
Today, user h4x3rotab approved the changes and rolled out the Replay Protection Implementation update.
How Does Replay Protection Stop Transaction Replays?
A replay occurs during a fork where a transaction is legitimate on both halves of the fork. Therefore, the transaction is reported and valid on both blockchains. So while sending coins to a single chain, it unintentionally it sends it to the other.
When Ethereum Classic split from Ethereum in 2016, some took advantage of this confusion to attack exchange wallets, draining the ETC tokens. That’s called a “replay attack“.
Replay protection stops transaction replay and users do not lose any funds. There are many ways to attain the replay protection, such as altering transaction format or changing the signature scheme. Manually blacklisting certain addresses is another way to achieve it, though not very practical.
Bitcoin Gold Features
Elements that already have been successfully added to the Bitcoin Gold blockchain are: Equihash PoW change, a difficulty adjustment algorithm, network and pool integration, SIGHASH_FORK_ID replay protection, unique address format and local testnet.
The following are planned BTG features yet to be implemented: Launch public testnet, adjust network parameters, prepare for mainnet launch, deploy mainnet, electrum fork, 3rd party wallet and exchanges integration. Once that’s all done, the decentralized mining begins.
Bitcoin Gold proponents say it gives smaller operators around the globe the chance to participate in the mining operation. In theory, this decentralized mining infrastructure is closer to the original vision of Satoshi Nakamoto, where everyone can mine without the need for expensive pieces of equipment.
Whether or not it would work in reality — especially if BTG becomes truly valuable — remains uncertain. Whatever the tech tools used to mine, large operations will still have more financial and logistical resources than the average punter.
Does this make you more or less likely to use, buy or sell Bitcoin Gold? Tell us about it.
Images via Pirulitta.com, Pixabay