How to claim Bitcoin Gold

How to claim Bitcoin Gold

You might have seen articles online about ‘claiming’ Bitcoin Gold and wondered what this means. Are there free Bitcoin Gold coins available? If so, who can get them and how? The short answer is yes, there are free Bitcoin Gold coins available but only to people who held Bitcoin when Bitcoin Gold was created in November 2017.

Bitcoin Gold was created as a fork of the main Bitcoin blockchain. This effectively created two versions of the same blockchain, so anyone who had Bitcoin at the time of the fork automatically had the same amount of Bitcoin Gold. After that point, the two blockchains proceeded entirely separately. Only those who had Bitcoin at the time of the fork – specifically block 491,407 – are entitled to Bitcoin Gold.

Bitcoin Gold and the hard fork
One of the key components of cryptocurrencies is the underlying blockchain technology. Each block that is added is secured with a cryptographic hash that makes it immediately clear if anyone subsequently tries to tamper with a past transaction. Once this process is underway, changing the rules of how it is done requires a change to the underlying code, which effectively creates a ‘fork’ in the chain.

In a ‘soft’ fork, the new network will continue to recognise transactions on the old one, making it backwards compatible. However, the old network will not recognise transactions on the new one. This means the new network almost entirely replaces the old one, leaving the old one with little future.

A ‘hard’ fork creates two entirely separate networks – neither one will interact with the other after the fork has taken place. This is usually what happens when people on the network disagree about the direction the blockchain should take. One group makes the changes they want and splits from the other.

This is what happened in the case of Bitcoin Cash. Those in favour of Bitcoin Gold felt that mining had become concentrated in too few hands. As the difficulty of mining increased, it became impossible for ordinary users with graphics processing units (GPUs) or graphics cards to have any success as miners. Instead, well-funded miners were using expensive, dedicated devices, known as application-specific integrated circuits (ASICs).

The people behind Bitcoin Gold felt that ordinary miners were being priced-out of the system and there was a risk that a small number of miners – or groups of miners – would effectively control the network. They opted for a hard fork to implement their vision.

Bitcoin Gold uses a different proof of work algorithm – known as ‘equihash’ – to verify transactions. This is intended to make it more GPU-friendly. Otherwise, Bitcoin Gold works in the same way as Bitcoin.

The Bitcoin Gold coin giveaway
At the point when the fork happened – block 491,407 – anyone with Bitcoin automatically received an equal amount of Bitcoin Gold. If you had five Bitcoin at that time, then you would also have five Bitcoin Gold – your Bitcoin holding would be unaffected. How valuable this windfall is, of course, depends on how Bitcoin Gold’s value does over time.

The fork happened in November 2017 but don’t worry if you have not yet claimed your Bitcoin Gold coins. They are still there. Indeed, depending on your wallet, you might have access to them already.

Different wallets handled the fork in different ways. Some exchanges automatically added Bitcoin Gold tokens to their users’ accounts. These are not the same as actual coins so they will need to be converted to coins. Some wallets would prompt users to claim their Bitcoin Gold. Most, however, will have done nothing so it would be up to the user to claim their coins.

Assuming your coins have not automatically been added to your account, then you have plenty of options. The most important thing is that you control the private keys to your wallet or wallets – something that is not the case if your coins are left in an exchange. Security is the prime concern, as it always should be with any cryptocurrency transactions.

Options for anyone with unclaimed Bitcoin Gold
When the fork happened, many experts advised users to do nothing and wait. There were a few reasons for that. First, as mentioned above, your Bitcoin Gold coins aren’t going anywhere. You can always claim them later, so there’s no rush.

Second, it was likely that Bitcoin Gold would take time to settle down and for its value to emerge, so there was no point doing anything until the landscape was a little clearer.

Third, the fork could be a target for fraudsters, particularly those using something called a ‘replay attack’. When a fork happens and users have coins in both blockchains, those coins have the same private keys. This opens the possibility of an attacker getting hold of your details in a transaction and ‘replaying’ that transaction on the other blockchain. The transaction is valid on both blockchains because the ledgers are so similar at the point of the fork. The good thing about this risk is that it diminishes significantly over time. Bitcoin Gold claimed to have replay protection but the best way to avoid the risk is simply to do nothing. Fortunately, the fork is far enough in the past that it’s no longer a major risk.

Let’s assume that you held Bitcoin at the time of the fork and that you now want to claim them. How do you go about it?

The first thing to do is move your Bitcoins to a new wallet. The process of claiming your Bitcoin Gold will expose the private key and seed phrase of this wallet, meaning that the wallet will be exposed.

What happens next depends on the wallet you use. We don’t endorse specific wallets, so we recommend checking with your provider for specific instructions. Beware scam wallets and websites set up around the Bitcoin Gold fork to trick users into handing over their seed keys. A little research into the reliability and pedigree of a wallet is an essential step before you add any secure information to it.

Also, if you don’t understand what you are doing then always stop and seek advice. Making a mistake on a process like this one can result in losing your coins and you won’t be able to get them back. With those warnings in mind, here are the basic steps that you need to take.

Claiming Bitcoin Gold, step-by-step
First, if your wallet uses two-factor authentication then you can log in as normal. However, if your wallet uses seed phrases then you need to get those. This is a phrase of up to 24 words that you will have been prompted to select and store when you set the wallet up. Many wallets will display the phrase for you, too. Do not share this phrase because anyone who has it will be able to access your wallet and therefore your coins. The seed phrase will prove that you owned Bitcoins at the time of the fork.

Once again, it is highly recommended that you move your Bitcoins before starting this process. You should also make a backup of your wallet. With that done, you should install a wallet that is compatible with Bitcoin Gold. Import your keys into that wallet, using the option that will be called something like ‘Restore a Wallet’, then enter your seed phrase. You should then find the option for adding Bitcoin Gold.

If you are importing your private key from a paper wallet then you won’t have a seed phrase to use. Instead you will need to use a wallet that has the option to ‘sweep paper wallet’ as part of its settings.

If you had Bitcoin in several wallets at the time of the fork, then you will need to repeat the above process for every wallet, otherwise you won’t be able to claim all the Bitcoin Gold to which you are entitled.

It’s worth repeating that the exact process will vary depending on which wallet you use, and if you get stuck at any point then you should stop and seek advice.

What you do next is up to you. You can sell your Bitcoin Gold coins at an exchange that supports them, use them in transactions or simply keep them safe for later.

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This post is provided for informational purposes only. None of the information presented here should be considered investment advice. Everyone should always do their own research and due diligence before sending funds to any third party.