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Bitcoin SV is a notorious cryptocurrency in some ways, but it also has some devoted followers. This guide explains where it came from, what technically sets it apart from other projects, and where it could go.
What is Bitcoin SV?
Bitcoin Satoshi's vision, better known as Bitcoin SV (BSV), is a tough spin-off from Bitcoin Cash. Craig Wright, Bitcoin SV and the nChain website agree that their goal is to restore Bitcoin to its original form.
They argue that the changes that have been made to Bitcoin and Bitcoin Cash over the years are perversions of Satoshi Nakamoto's vision and that Bitcoin should be returned as close as possible to the description first set out in the original Bitcoin white paper .
At the core of the Bitcoin SV ideology is the belief that nefarious developers hijacked Bitcoin in its early days and that their changes must be reversed. The Bitcoin SV team is led by Craig Wright, who has often claimed to be Satoshi Nakamoto.
Bitcoin SV price
- Ticker symbol: BSV
- Use: Digital inventory
- Year of publication: 2018
- Origin: Bitcoin fork
- Maximum supply: 21,000,000
- Consensus algorithm: proof of work
- Notable team members: Craig Wright, Calvin Ayre
- Is BSV degradable? - Yes.
Where did Bitcoin's SV come from?
During the "Bitcoin vs Bitcoin Cash" fork in 2017, BSV supporters chased the Bitcoin Cash side and decided it was getting closer to Satoshi Nakamoto's original vision. But when they felt Bitcoin Cash was deviating from Satoshi's vision, another split developed.
Two main groups of Bitcoin Cash developers were involved in this split:
- Bitcoin ABC - Team Bitcoin Cash: This group is widely considered to be the core development team of Bitcoin Cash.
- nChain - Team Bitcoin SV: A blockchain research and mining company led by Craig Wright who has often claimed to be Satoshi Nakamoto - the original creator of Bitcoin. nChain founded Bitcoin SV.
The split came about when Bitcoin ABC proposed a substantial update to Bitcoin Cash, which nChain disagreed with. nChain then proposed a separate, incompatible update.
The Two Updates - The Bitcoin ABC Proposal
The main part of the Bitcoin ABC update was the addition of two new pieces of code called "OP_CHECKDATASIG" and "OP_CHECKDATASIGVERIFY". These allow the Bitcoin Cash blockchain to read information that is not necessarily part of a cryptocurrency transaction.
It's essentially a foundation for smart contracts on the Bitcoin Cash blockchain so that it can do more sophisticated things than just send and receive transactions. They argue that this code would allow Bitcoin Cash to evolve and be used for a wider range of purposes.
The nChain proposal
nChain disagreed with the addition of a new code, arguing that it further removed Bitcoin Cash from its primary purpose as digital currency and challenged Satoshi Nakamoto's original vision.
In its own update, nChain suggested restoring two very old pieces of code called OP_LSHIFT and OP_RSHIFT. These appeared in the earliest versions of Bitcoin but were removed because they weren't necessary and added potential security risks.
At the same time, nChain proposed quadrupling the Bitcoin Cash block size from 32MB to 128MB, arguing that ever-increasing block sizes were what Satoshi Nakamoto originally intended. Larger block size improved network throughput at the expense of introducing several other disadvantages.
Neither side was willing to compromise with the other, so both published their updates publicly, forcing miners to choose which one to install.
The result was inconclusive as nChain had its own extensive mining operations while crypto-mining giant Bitmain threw its support behind the Bitcoin ABC updates. Today we have Bitcoin Cash and Bitcoin SV as separate cryptocurrencies, while the supporters of the BSV consider them the last remaining "real Bitcoin".
Technical characteristics of Bitcoin SV
nChain's suggestions OP_LSHIFT and OP_RSHIFT have little or no functional impact on how the cryptocurrency works, so their main technical difference is a large block size.
Bitcoin SV has continued to increase its block size since the fork as per its interpretation of Satoshi's vision, with both good and bad implications.
- The main benefit of this is that it gives the Bitcoin SV network extremely high throughput. Its large block size offers space for countless transactions. However, the theoretical capacity of Bitcoin SV now massively exceeds its actual use, so this benefit is purely hypothetical.
- The flip side of the coin is that it makes it more difficult for blocks to propagate through the blockchain network and increases the risk of random branching.
Bitcoin SV (BSV) vs Bitcoin Cash (BCH) vs Bitcoin (BTC)
There are now three different Bitcoin based cryptocurrencies, each with some technical differences, as well as communities that tend to favor different destinations. All of them support a number of different third-party tools and additional features.
- Bitcoin SV (BSV): Aims to use the BSV blockchain as a tool for governments and businesses. The community is largely focused on keeping Bitcoin SV as close as possible to the original version of Bitcoin and spreading the message that Craig Wright is Satoshi Nakamoto.
- Bitcoin Cash (BCH): Aims to use BCH as digital cash. The community is largely focused on promoting the acceptance of BCH and other tokens of value as alternative currencies among merchants and users.
- Bitcoin (BTC): Aims to use the BTC as both digital gold and currency. The community is largely focused on encouraging people to buy and keep bitcoin instead of spending bitcoin.
Bitcoin SV mining
Bitcoin SV uses the same mining algorithm as Bitcoin and Bitcoin Cash, called SHA-256. Like Bitcoin and Bitcoin Cash, it can only be mined effectively using specially designed SHA-256 miners.
Since the same equipment is used to mine all three chains, the process for mining Bitcoin and Bitcoin SV is very similar. This also means that, unless a miner decides to mine only a certain variant of Bitcoin for ideological reasons, they will switch between mining BTC, BCH and BSV, whichever is most profitable at the time.
As a result, it is usually almost equally profitable to mine one of the three main versions of Bitcoin at any point in time. Since it has the highest price, BTC tends to attract the most miners, followed by BCH, followed by BSV.
The Future of Bitcoin SV: Things to Consider
Some Bitcoin SV supporters have argued that Satoshi Nakamoto's vision was perfect and that any cryptocurrency that retains the original features and properties of Satoshi Nakamoto's original Bitcoin is therefore destined to succeed.
And in interviews, Craig Wright has said that Bitcoin was always intended to run a few centralized, professionally operated data centers, and that the censorship-resistant decentralized network of Bitcoin miners was the result of Bitcoin being hijacked for criminal purposes. On its website, nChain describes Bitcoin SV in a similar way as a tool for business use.
Below are some factors to consider when trying to estimate the future probability of Bitcoin SV success:
- Whether corporate customers need a centralized blockchain system.
- Whether corporate customers have a need for a blockchain whose only function is to move BSV tokens.
- Whether or not corporate customers will be sufficiently impressed with Bitcoin SV's adherence to Satoshi's vision that they will choose Bitcoin SV for all of their digital token transfer needs.
- Whether claiming to be Satoshi Nakamoto is a good strategy for attracting corporate users.