Bitcoin SV (BSV): A Bitcoin Fork to Realize Satoshi’s Alleged Vision
We delve into the technical details of Bitcoin SV, as well as its role in realizing Satoshi Nakamoto’s vision for Bitcoin.
The blockchain network and its underlying cryptocurrency bitcoin (BTC) have come a long way since Bitcoin’s debut in 2009. Bitcoin was created with the goal of democratizing the global monetary system, and it has since spawned thousands of new and distinctive “altcoins” (cryptocurrencies other than bitcoin). The majority of these alternative blockchain frameworks and tokens have aimed to improve on the Bitcoin protocol’s alleged flaws.
The Bitcoin Cash (BCH) fork, which occurred in 2017, was one significant example of an effort to improve Bitcoin. Bitcoin Cash aimed to boost Bitcoin’s transaction speed and overall transaction throughput in order to enhance blockchain and cryptocurrency industry scalability and general adoption. The Bitcoin SV network and its underlying asset BSV were created in 2018 as a result of a hard fork of Bitcoin Cash. The claimed goal of Bitcoin SV is to become a more technologically advanced version of the original Bitcoin protocol, with an emphasis on enhancing network transaction speeds and scalability. With this in mind, Bitcoin SV stands for “Bitcoin Satoshi Vision,” as the blockchain project and its cryptocurrency were created to carry out the vision of Satoshi Nakamoto, Bitcoin’s pseudonymous originator. Craig Wright, the founder of Bitcoin SV, claims to be Nakamoto himself, which is no coincidence.
- History Leading Up to Bitcoin SV
- Bitcoin SV Ideology
- Bitcoin SV Protocol Technical Structure
- The Controversy of Bitcoin SV (Craig Wright)
History Leading Up to Bitcoin SV
Only the most distinctive, inventive, and genuinely beneficial ventures survive in an industry where blockchain projects and their associated cryptocurrencies fight to deliver the most usefulness to investors, institutions, and everyday consumers alike. Many extant alternative cryptocurrencies were created to expand on the original Bitcoin blockchain’s intended purposes, with the goal of bringing something new and unique to the industry. Frequently, these projects attempt to integrate entirely new use cases, including anonymity, decentralized application development, and decentralized storage.
They can even add enhanced programmability that is customized to the creation of specific smart contract types. Other altcoins, on the other hand, are born from projects that, rather than providing entirely new features, just want to correct what they perceive to be a flaw in an existing system. Bitcoin is frequently the topic of such efforts, as Bitcoin SV is.
The network was more than capable of handling the transaction load of a small niche group, mostly comprised of developers and cryptography aficionados, during Bitcoin’s early phases of development. However, as Bitcoin’s popularity expanded, the network became clogged with a growing volume of transactions, resulting in a significant increase in transaction processing times. Many people became afraid that if nothing was done to remedy the problem, Bitcoin transactions would take days or weeks to clear. Transaction fees could skyrocket if these multi-day delays truly happen. These concerns about time and fees were at the heart of what became known as Bitcoin’s scalability issue.
Bitcoin Cash (BCH) was the first Bitcoin fork that attempted to address the scalability issue. The fundamental motivation for developing Bitcoin Cash via a large network hard split was to enhance the amount of transactions that could take place every second. This worry is mirrored in the structure of BCH, which raised the initial BTC block size substantially. Transactions can be handled more quickly with more data in each block. Bitcoin Cash’s developers also took steps to limit the overall amount of data that needs to be verified in each transaction, speeding up the process even more.
Transaction speed is critical for a cryptocurrency’s scalability, functioning, broad adoption, and long-term profitability. In comparison, the Bitcoin network can now handle seven transactions per second, whereas Bitcoin Cash can handle roughly 116 transactions per second. Despite being the first Bitcoin fork, Bitcoin Cash was not the last.
Bitcoin SV Ideology
Proponents of Bitcoin SV think that the original Bitcoin protocol is fundamentally defective, and as a result, they do not believe it is justified to continue depending on its structural approach. They feel that the deployment of SegWit, the Lightning Network, and other modifications endangers the original Bitcoin protocol’s stability and validity.
The Bitcoin SV community claims that Satoshi’s only planned scalability-oriented change to Bitcoin’s initial protocol was to increase block sizes, which is questionable. As a result, they conclude that all changes to the Bitcoin protocol beyond block size increases constitute departures from the original system. The only allowed approach to boost scalability, according to the Bitcoin SV development team, is to increase block size – all other techniques are rejections of the original Bitcoin protocol.
By this logic, when Bitcoin adopted SegWit to enable a freshly built off-chain processing option, it was rejecting its own original protocol architecture. Furthermore, despite its new ticker symbol, Bitcoin Cash was (at first) a real continuation of the original Bitcoin protocol because it didn’t include any net-new technology, instead only expanding on existing functionalities by raising block size from 1MB to 32MB.
However, Bitcoin Cash continued to make structural changes to their system, resulting in a Bitcoin Cash hard fork that gave birth to Bitcoin SV. Despite the fact that it has a different ticker symbol, its community believes Bitcoin SV is the only legitimate continuation of the original Bitcoin blockchain network.
Bitcoin SV Protocol Technical Structure
The Bitcoin SV blockchain’s native cryptocurrency is BSV. Apart from the considerable increase in block size, this cryptocurrency operates according to the early regulations of BTC from the original Bitcoin whitepaper. Due to two key considerations, Bitcoin SV emerged from the hard fork of Bitcoin Cash that occurred on November 15, 2018.
- The idea that the scalability enhancements offered by Bitcoin Cash were insufficient to suit Bitcoin’s ongoing needs.
- The desire to return to the original Bitcoin concept, as depicted in Bitcoin protocol version 0.1
The Bitcoin SV protocol, which was originally established with a default block size of 128MB, received its Quasar Protocol Upgrade in July 2019, increasing the block size to 2GB (2,000MB, as opposed to Bitcoin’s original 1MB block size). The protocol is designed to allow for a variable block size, which is set by the network’s consensus mechanism. Miners can also pick and choose which block sizes they want to mine. The structure of Bitcoin SV is designed to allow for the processing of more transactions at once, resulting in higher transaction fees – an increase designed to encourage miners to keep mining new blocks long after block rewards have ceased.
Miners gain block rewards for mining new blocks and adding them to the network on numerous blockchains (including Proof-of-Work protocols like Bitcoin and Bitcoin SV). Block rewards serve as a financial incentive for miners to devote their resources and processing power to the mining operation. Block rewards are gradually lowered by 50 percent increments over time (approximately every four years for BTC), in a process known as halving.
Because block rewards are halving, the option for miners to choose whatever size of blocks they want to mine is a potentially appealing feature. Because larger blocks mean more transactions per block, miners will be able to earn more in transaction fees, which will compensate for the decrease in block rewards.
On its mainnet, Bitcoin SV claims to process 300 transactions per second on average, with a peak capacity of 2,800 transactions per second (as of July 2020). Due to its unbounded block size, the team claims that it’s Gigabit Testnet (GBTN) can process up to 5,500 transactions per second. For instance, TAAL, a Bitcoin SV-focused enterprise blockchain service provider, completed a 369MB block on the Bitcoin SV mainnet in May 2020, including 1.3 million BSV transactions. While still well short of Bitcoin SV’s 2GB maximum, this milestone represents transaction speeds considerably exceeding either BTC or BCH’s processing capabilities.
Bitcoin SV aspires to have a set protocol structure in order to give the kind of stability that potential investors and enterprise-scale applications demand. To gain public confidence and eventually worldwide enterprise use, the Bitcoin SV protocol is designed to be highly scalable and regulation-friendly. Despite these admirable objectives, it remains to be seen if the project will be sustainable in the long run.
For one thing, huge blocks are faster, but they forfeit decentralization since the additional memory needs limit the number of complete nodes that can record the entire blockchain history. Small blocks, in other words, are slower but maintain the core benefits of decentralization and security by allowing more nodes to join and maintain the network. Speed and decentralization are essentially on a scale, so the more of the one you have, the less of the other you have.
The Controversy of Bitcoin SV (Craig Wright)
The identity of Bitcoin’s founder has been a source of conjecture and dispute since its beginnings. The pseudonymous author of Bitcoin’s whitepaper, Satoshi Nakamoto, has never been discovered. Despite the fact that several prominent players in the blockchain and crypto sector have been accused of being Satoshi Nakamoto at one time or another, almost all have denied the accusation.
Despite the fact that the majority of people believe Nakamoto’s true identity is still unknown, Craig Wright, the inventor of Bitcoin SV, has publicly claimed to be Satoshi Nakamoto. He has, however, failed to give any actual evidence, and many people are skeptical of his allegations. Wright has been embroiled in a slew of legal battles over these and other Bitcoin-related issues.