Hours after their official launch, the team admits they are still mining for themselves, essentially alienating the interested mining community that could spell life or death for the project.
SegWit Gold (SWG) officially announced that they went “live” yesterday. But hours after their official launch, miners are seen complaining on their channels—some could not get in, while those that were able to mine did not get any rewards in return. It turned out that the team is still syncing with pools and mining for themselves.
Shortly after the launch, the team said that they suffered “an attack.” When asked whether it was an attack that was going on, or if the team was pre-mining again, their response was “both.”
Indeed, it is a shaky start for Gold—which some say should not even keep the “Bitcoin” in its name since it has morphed into an altcoin that revolved around dethroning manufacturers of the ASIC mining hardware. Apart from this, SWG aims to be a “better gold than Bitcoin,” but its transactional capability has yet to be addressed—a functionality given more priority by the earlier hard fork of the Bitcoin blockchain, Bitcoin Cash (BCH).
One big problem with SegWit Gold is that they have been announcing their deadlines but have been unable to meet them. They set their fork schedule at block 491,407 but then found out that they couldn’t proceed as planned by that time, so they had to “freeze” syncing until their client was ready. The launch was then rescheduled to November 1, and again to November 12. But their faulty launch yesterday implies they may still not be ready.
Last month, they started their pre-mine—which they said will not exceed 1% of the SWG cap or around 100,000 SWG—a move that was drenched in controversy. It was one of the developers that casually admitted through a Slack conversation that the pre-mine had already started—before any official announcement was made. Ultimately, this was seen as a dishonest and questionable move that cast a big shadow over the entire project. By default, a cryptocurrency with a pre-mine reeks of a pump-and-dump waiting to happen. And with no publicly known developers (all are anonymous and go by user names), investors and exchanges alike are uneasy.
In their Facebook page, they insist that the reason behind the pre-mine is to cover expenses, since they do not have “wealthy backers” to support the project.
Users rejected this, saying they should have informed the public of this before the launch, assuming this was a different set of pre-mining than what they have already been doing since October. It was in the community’s understanding that the public/official launch yesterday would be for the public community, not the developers.
Apart from delivering what they have already promised, SWG has yet to disprove security doubts about their system. While “decentralizing” mining by enabling common people to mine using ubiquitous, low-cost graphics cards seems like a noble advocacy, this accessibility is a double-edged sword: attacking the system will also be cheap.
Overlooked SegWit Gold (Bitcoin Gold) fact.
There are over 250 + banks that could flip 51% of this network using idle GPU time even were the SWG system to obtain 25,000 separate nodes.
This is why ASIC based PoW works.
And flipping PoW would make no difference.
— Dr Craig S Wright (@ProfFaustus) October 24, 2017
Doubts in the reliability of SWG have exchanges treading lightly. Bittrex announced that although they will be crediting BTC holders with a corresponding balance in SWG, they will not be opening a SWG trading market, saying it “does not satisfy our criteria for safety for our users.”
SWG’s code has just been released and has yet to undergo review from the open community. As it is still early, all we can do is wait things out and see if the team can turn things around despite their rocky start.