What is Bitcoin SV (BSV)? A Bitcoin Cash Hard-Fork Focused On Original Bitcoin Principles
Bitcoin Satoshi Vision (SV) is one of the two projects that emerged out of the well-documented Bitcoin Cash hardfork on November 15, 2018.
Prior to the contentious hard fork, Bitcoin Cash developers and miners became heavily divided over the future of Bitcoin Cash; including the size of its blocks, the introduction of new features and its alignment with principles from the original Bitcoin whitepaper.
On one side there was the Bitcoin SV Client founded on August 16, 2018 and comprised of Coingeek CEO Calvin Ayre and nChain Chief Scientist Craig Wright (self-proclaimed Satoshi Nakamoto, inventor of Bitcoin).
Both of these key Bitcoin Cash proponents lobbied to increase the BCH block size from 32mb to 128mb - a 4x increase in size - but repudiated using secondary layer wormhole for smart contracts. Instead, they proposed restoring the original Satoshi opcodes for more extensive smart contracts and tokenization on-chain, to realign the project with Bitcoin’s primary objective to serve as a P2P electronic cash system.
On the other side was the Bitcoin ABC client, consisting of rival mining giant Bitmain led by CEO Jihan Wu, avid crypto proponent Roger Ver and the Bitcoin ABC developers. This faction wanted to move Bitcoin Cash in the completely opposite direction and push forward with Canonical Transaction Ordering (CTOR) as an on-chain scaling solution, implement secondary layer scaling solutions such as the Lightning Network, include smart contract functionality, and perhaps most significantly, leave block sizes as they are - at least until these aforementioned implementations are completed.
By November 15, neither side could agree on an acceptable compromise and once the hard-fork was underway, miners from both factions began contributing huge amounts of their resources to compete to create the longest chain and establish themselves as the new Bitcoin Cash. Eventually, after days of fighting and both Bitcoin ABC and Bitcoin SV racking up daily losses ranging between $200,000 and $400,000, a number of major exchanges stepped in and assigned the BCH ticker to Bitcoin ABC - thus bringing the hashing war to an end.
Why is Satoshi’s Original Vision and Block Size so Important?
It all comes down to a preference of philosophy or practicality.
Bitcoin SV wishes to follow Satoshi Nakamoto’s original protocol and establish itself as ‘the true Bitcoin’, while Bitcoin ABC is looking to deviate from Bitcoin’s initial blueprint to make Bitcoin Cash more functional and scalable in the long-term.
Block size refers to the amount of transaction data each block can hold. By increasing the block size, a miner can process more transactions per block, thus greatly increasing overall transaction speed and reducing transaction fees. However, it also means that blocks take longer to individually process, running a full node becomes more expensive and requires increasingly more data resources, and ultimately the system comes under threat of being dominated by a select number of giant mining companies.
This is why Bitcoin ABC voted in favor of secondary scaling solutions such as Lightning Network or on-chain solutions such as CTOR as alternative methods of increasing transaction speeds by optimizing data on the existing 32mb blocks.
Bitcoin SV’s future goals are very ambitious. Craig Wright has publicly announced that in two years’ time, Bitcoin SV will be able to handle two million transactions per second (TPS) at peak performance, and 500,000 TPS at its normal operating rate. He also has plans to increase block sizes from 64mb to 512mb in the next six months, then 2gb sometime afterwards. He has also spoken about a ‘Terranode’ project which aims to create one terabyte blocks in the future. For now he has given no comment on how this will be achieved, nor how they will balance mining decentralization with increased block sizes but remains confident that his technology will be a global sensation.
“In 10 years, there will no be a country who does not use my technology. And, billions will daily.”