As October 2017 progressed, the Bitcoin mining ecosystem found itself at a crossroads. With BTC hovering around $4,831 and the network hashrate climbing steadily, miners were bracing for not one but multiple chain splits. The most immediate was Bitcoin Gold (BTG), a proposed hard fork led by Jack Liao that aimed to upend the mining establishment by replacing Bitcoin’s SHA-256 algorithm with Equihash — an ASIC-resistant proof-of-work algorithm designed to level the playing field for everyday miners using consumer graphics cards.
TL;DR
- Bitcoin Gold hard fork was being prepared for snapshot at block 491,407 (approximately October 24, 2017)
- BTG aimed to replace SHA-256 with Equihash to make mining ASIC-resistant
- Bitcoin Cash hashrate briefly exceeded BTC’s around mid-October 2017
- BTC traded at approximately $4,831, BCH at $312 on October 11
- Multiple forks on the horizon created uncertainty in mining economics
- SegWit activation in August 2017 had already shifted network dynamics
The Bitcoin Gold Vision
Jack Liao, the head of the Bitcoin Gold project, outlined his aspirations in interviews with Chinese crypto media outlet 8BTC during October 2017. The core thesis was simple but controversial: Bitcoin mining had become too centralized. Industrial-scale mining operations running custom ASIC hardware manufactured predominantly by Bitmain had effectively priced out individual miners, concentrating hashpower in the hands of a few large players and the pools they operated.
Bitcoin Gold proposed to change that by adopting Equihash, the same algorithm used by Zcash. Because Equihash was memory-intensive rather than computation-intensive, it was far more amenable to GPU mining. The vision was a return to Bitcoin’s original ethos — one CPU, one vote — where anyone with a gaming PC could participate in securing the network and earn mining rewards without needing specialized hardware costing thousands of dollars.
The fork was scheduled to occur at block height 491,407, which was projected to be reached around October 24, 2017. Any holder of BTC at the time of the snapshot would receive an equivalent amount of BTG at a 1:1 ratio, mirroring the distribution model that had been used for Bitcoin Cash in August.
Hashrate Wars: Bitcoin Cash Briefly Overtakes BTC
One of the most remarkable phenomena of mid-October 2017 was the dramatic fluctuation in mining power between Bitcoin and Bitcoin Cash. According to research by Binance, there was a period around mid-October when the hashrate of Bitcoin Cash actually exceeded that of the original Bitcoin chain. This was possible because both networks shared the same SHA-256 mining algorithm, meaning miners could point their hardware at either chain depending on which was more profitable to mine at any given moment.
The profitability calculus was straightforward: miners would mine whichever chain offered the best return after accounting for block rewards, transaction fees, and the market price of the coin. When BCH’s price spiked relative to its difficulty, it became temporarily more profitable than BTC, triggering a flood of hashrate to the Bitcoin Cash network. This created visible effects on the Bitcoin blockchain, where block times temporarily increased as hashrate departed.
On October 11, Bitcoin Cash was trading at approximately $312, according to Kraken’s daily report, down 1.39% on the day. Despite the lower price compared to BTC at $4,831, the profitability dynamics were influenced by BCH’s difficulty adjustment algorithm, which had been modified from Bitcoin’s original design to adjust more rapidly to hashrate changes.
The SegWit Aftermath and Network Dynamics
The mining landscape of October 2017 was still absorbing the effects of Segregated Witness (SegWit), which had activated on the Bitcoin network in late August 2017. SegWit’s activation resolved a years-long scaling debate but did not satisfy everyone. The community had split into multiple camps: those who supported SegWit and the planned SegWit2x hard fork, those who had created Bitcoin Cash in opposition, and now those pushing for Bitcoin Gold.
The activation of SegWit introduced a new transaction format that effectively increased block capacity and laid the groundwork for Layer 2 solutions like the Lightning Network. However, adoption was still in its early stages in October 2017, with only a small percentage of transactions using the new format. For miners, the key concern was how these protocol changes would affect fee revenue and the long-term economics of mining.
Mining Economics in a Multi-Fork World
The proliferation of Bitcoin forks created a strange new economic reality for miners. Each fork that occurred effectively created a new SHA-256 chain competing for the same mining hardware. Miners now had to consider not just the immediate profitability of mining BTC versus BCH, but also the potential future value of any new coins created by upcoming forks like Bitcoin Gold and SegWit2x.
The situation was further complicated by the fact that Bitcoin’s difficulty adjustment algorithm was designed for a more stable hashrate environment. Large swings in hashpower between chains could lead to extended periods of slow block times on one chain followed by rapid difficulty adjustments, creating a volatile experience for users and miners alike.
Why This Matters
The events of October 2017 laid bare the fundamental tension at the heart of Bitcoin’s proof-of-work system: the same decentralization that made the network resilient also made it vulnerable to governance conflicts played out through mining power. The Bitcoin Gold experiment, while ultimately modest in its impact, raised questions about mining centralization that remain relevant today. The hashrate wars between BTC and BCH demonstrated that mining is a market-driven activity where profit motives can override ideological commitments. As the cryptocurrency ecosystem has matured, these lessons have informed the design of newer consensus mechanisms and mining algorithms, but the core insight endures: in proof-of-work systems, economic incentives and technical parameters are inseparable.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Cryptocurrency investments carry significant risk.
jack liao trying to kill asic mining with equihash. noble idea but BTG ended up getting 51% attacked multiple times anyway
BCH hashrate briefly exceeding BTC was wild. miners were literally voting with their hardware on which chain to support
multiple forks at once was chaos for holders. had to keep track of BTG, BCH, and the upcoming segwit2x all at the same time
the “one CPU one vote” narrative sounds great until you realize botnets would dominate any ASIC resistant chain