Bitcoin SV

What is Bitcoin SV (BSV)?

Bitcoin SV is an attempt to stay true to the design of Bitcoin as laid out by its founder, Satoshi Nakamoto.

Since publishing Bitcoin’s whitepaper and changing the world with his revolutionary peer-to-peer payment protocol, Nakamoto seemed to vanish off the face of the world. His creation was left in the custody of its community.

However, with the passing of time and the rapid evolution of technology, Bitcoin has also changed. Several innovations and protocol-level amendments have been made in order to keep Bitcoin applicable as faster, more scalable, and more dynamic blockchain projects continue to emerge.

The SV in Bitcoin SV stands for Satoshi’s Vision. As such, Bitcoin SV is a philosophical throwback to what Bitcoin originally was. In an attempt to stay true to Nakamoto’s writings, it rejects many changes made by developers.

That isn’t to say that Bitcoin SV is slow or useless. In fact, by removing block size limits and re-enabling technical features like Script commands that had been restricted by BTC developers, BSV manages significant transaction throughput.

Its ultimate aim is to provide a relevant, scalable, and stable peer-to-peer electronic cash system that nonetheless stays true to Bitcoin’s original values.

When Was Bitcoin SV Launched?

Bitcoin itself came into being in 2009, following the sub-prime crisis that prompted Satoshi Nakamoto, a noted critic of fractional reserve banking, to release its whitepaper.

Following a divide in the Bitcoin community over aspects regarding Bitcoin’s scalability, the Bitcoin chain carried out a hard fork. One remained as Bitcoin, and the other was known as Bitcoin Cash. The group following Bitcoin Cash was against the implementation of a soft fork to Bitcoin known as SegWit2x.

One year later, in 2018, Bitcoin Cash itself underwent a hard fork. This led to the divergence between BCH and what would become Bitcoin SV.

One of the reasons Bitcoin SV was able to claim that it stays true to Bitcoin’s origins is that, through both of these major hard forks, it was first BTC and then BCH that forked away.

What is a Hard Fork?

A hard fork is a change in the protocol of a blockchain network that causes the chain to split into two. This is usually done to upgrade the network, but sometimes happens as a result of a community divide.

A soft fork, meanwhile, is a change to a protocol that doesn’t result in the launch of a new cryptocurrency as it is backward compatible.

Who Are the Founders of Bitcoin SV?

If Bitcoin SV is aiming to stay true to Bitcoin’s original description, then the founder of Bitcoin itself, Satoshi Nakamoto, must be credited as its creator.

After all, the developers who forked it away from Bitcoin and then BCH constantly cited Satoshi’s whitepaper, writings, and code from the original Bitcoin client. However, this development team has led to some of the biggest controversy in cryptocurrency history.

Blockchain company nChain is behind BSV. It develops its node software, delivers protocol updates, and powers the Bitcoin SV Infrastructure Team, which works on the BSV network. Craig Wright is nChain’s Chief Scientist.

Who is Craig Wright?

Craig Wright is a polarizing figure in the cryptocurrency industry, to say the very least. An experienced computer scientist and businessman, he has publicly claimed to be the identity behind the pseudonym Satoshi Nakamoto.

These claims originated in 2015, when Wired and Gizmodo suggested that Wright may have been Satoshi. However, just three days after publishing his original article, Wired’s Andy Greenberg published a follow-up, suggesting the evidence was a hoax engineered by Wright.

Wright also registered US copyright on the Bitcoin whitepaper and the code for Bitcoin 0.1 in April 2019. A spokesman for Wright then claimed that this was “the first government agency recognition of Craig Wright as Satoshi.”

This claim was dashed swiftly by the US Copyright Office, which issued a release clarifying that this was not the case and that it did not investigate links between the claimant and the pseudonymous author.

Wright has also been involved in many legal disputes. In 2019, he was sued by the estate of ex-business partner Dave Kleiman for half the Bitcoin holdings that the pair had mined between 2009 and 2013. Eventually, Kleiman’s estate was awarded $100 million in damages.

Wright has used English libel law to sue people who accused him of lying about inventing Bitcoin and those who called him a fraud. Among these have been podcaster Peter McCormack, Bitcoin advocate Roger Ver, and Ethereum founder Vitalik Buterin.

How Does Bitcoin SV Work?

Like Bitcoin, Bitcoin SV uses cryptography to verify transactions and record them on a public distributed ledger called a blockchain.

These blockchains are made up of blocks that are essentially a set of transactions batched together. On top of that, each block has a SHA-256 cryptographic hash of the previous block, going all the way back to the genesis.

Because each block has a record of the previous block, blockchains are immutable, or cannot be changed. This is because changing one of the previous blocks would make its cryptographic hash different.

What Makes Bitcoin SV Unique?

Bitcoin SV utilizes an unlimited block size. Block size has been central to many debates in Bitcoin’s history, and was a major cause of its hard forks.

BTC limits its block size and is therefore limited by how many transactions it can handle. On the flip side, that keeps the blockchain manageable in terms of actual storage.

BSV lifts these limits, and in fact, mined the world’s first gigabyte-sized blocks in 2021. In August 2021, BSV was up to a block size of 2 gigabytes, dwarfing the 1 megabyte block size of BTC.

In addition to allowing massive block sizes, Bitcoin SV has incorporated more features to distinguish itself from Bitcoin. One significant example is the smart contract functionality.

Smart contracts are pieces of code that execute when certain conditions are met. This allows the two parties on opposite sides of a deal to eliminate the need for an (often costly) trusted third party.

BSV is an attractive option for developers to migrate their smart contracts over because the lack of a block size cap promises low transaction fees. However, this ever-increasing block size also makes the blockchain difficult to store.

As a result, BSV is more attractive to enterprise and government users because of the hardware required to store the blockchain—an ironic twist given Satoshi’s vision of creating a peer-to-peer cash system for ordinary people.

How is the Bitcoin SV Network Secured?

Bitcoin SV is secured very similarly to Bitcoin in that it uses proof-of-work consensus to validate transactions.

Proof-of-work means that the computers on the network, or miners, leverage their computing power towards solving cryptographic puzzles to arrive at a solution. This solution has a certain level of difficulty. Although it is time-consuming to reach, it is very easy to verify.

The miner that successfully solves a puzzle first is given the privilege of creating the next block on the blockchain. Moreover, they receive a certain amount of BSV as a block reward.

Just like with Bitcoin, blocks on the Bitcoin SV blockchain are confirmed every ten minutes and have a halving schedule that impacts the block reward. Unlike Bitcoin, however, these blocks are much larger and require hardware with immense storage capacity.

What is Halving?

Halving refers to the reduction of block rewards paid to miners upon the successful creation of a new block.

These halvings bring an element of perfect transparency to the supply of Bitcoin and Bitcoin SV, allowing metrics to be predicted far into the future.

Currently, BSV has a block reward of 6.25 BSV, which will halve to 3.125 BSV in 2024.

What is the Use of Bitcoin SV?

Bitcoin’s vision, as laid out by Satoshi Nakamoto, was to create peer-to-peer electronic cash that could operate outside of the established banking industry and ignore national borders.

However, Bitcoin now functions primarily as a store of value and is considered a prime investment asset by many. While it is still far faster at settlement than traditional payment systems, the blockchain industry features other cryptocurrencies that are faster, cheaper, and more scalable than Bitcoin to transact with.

Bitcoin SV, however, allows that same sort of upgraded scalability that the best alternatives offer. BSV can theoretically handle over 100,000 transactions per second, and that figure is expected to grow.

Who Controls Bitcoin SV?

Following the hard fork that caused Bitcoin Cash and Bitcoin SV to split, a non-profit industry association called the Bitcoin Association was formed.

The Switzerland-based Bitcoin Association supports the growth and adoption of BSV and commissions the deployment of the Bitcoin SV Infrastructure Team at nChain.

How Do Bitcoin SV and Bitcoin Differ?

Bitcoin SV and Bitcoin share the same codebase and are both proof-of-work cryptocurrencies with the same maximum supply cap.

However, there are several significant differences between them:

• Block size. This is a fundamental difference and point of contention. BSV doesn’t have a block size cap, allowing it huge scalability but making blocks difficult to store. Bitcoin retains its 1 MB block size cap.
• Layer 2. Bitcoin enabled Layer 2 functionality to allow Lightning Network integration, whereas BSV requires no scaling solution.
• Transaction fees. Without using the Lightning Network, Bitcoin’s transaction fees are higher than those of BSV.
• Security. Given the sheer quantity and decentralization of miners, Bitcoin is far more resistant to any form of attack than BSV. It is theoretically far easier and cheaper to carry out a 51% attack on BSV since far fewer miners secure its blockchain.

How Much BSV Is In Circulation?

Bitcoin SV has over 19.1 million BSV in circulation out of a total maximum supply of 21 million BSV, with the difference being mined at a reducing rate as per the BSV halving schedule.

The maximum figure and the halving schedule via diminishing block rewards are defined in the Bitcoin SV protocol.

How Do You Buy BSV?

Bitcoin SV is a cryptocurrency with significant utility and a decent following. It is therefore available on several exchanges, as well as in peer-to-peer trading.

Trading against other cryptocurrencies, such as Bitcoin and Ethereum, may also be available depending on the platform. That said, compared to BCH, BSV trading is limited.

Is It Possible to Buy BSV Instantly?

Instant purchase of BSV isn’t possible because of the time it takes to mine blocks. BSV focuses on scalability, but transactions can still take up to ten minutes. Transactions are batched into blocks and mined before verification begins.

Still, having to wait a matter of minutes for a transaction to be made, confirmed, and settled in an immutable manner is far in advance of the traditional financial system.

How Do You Store BSV?

Like most cryptocurrencies—including its cousins, Bitcoin and Bitcoin Cash—BSV is stored using cryptocurrency wallets.

Like the others, Bitcoin SV uses public-key cryptography, meaning that a wallet consists of a private and a public key.

Public keys identify wallets on the blockchain and are shared with other parties to receive BSV. Private keys enable you to access and send BSV from the wallet.

These wallets come in three main forms:

• Cold wallets. Referring to "cold storage", these wallets keep private keys offline and thus safely out of the reach of hackers.
• Hot wallets. Unlike cold wallets, these are connected to the internet. They can come in the form of full clients that download a copy of the blockchain, light clients that interact with full nodes, or online/web wallets.
• Exchange wallets. These are forms of online or web wallets, but may differ slightly in that your exchange account isn’t necessarily a wallet in and of itself. Rather, it’s a representation of the trades you make. This means that all funds, including your deposits and purchases, are in the custody of the platform.

Bitcoin SV Energy Consumption

Bitcoin SV uses the same SHA-256 cryptography-based proof-of-work consensus as Bitcoin, and its energy consumption is comparable to that of other PoW chains.

A 2020 study on PoW cryptocurrencies showed that the BSV network consumes less than Bitcoin. However, it is also clear that the actual efficiency of the network remains the same since there’s no major change in the underlying technology.

So, if Bitcoin SV were to reach the levels of widespread mining that Bitcoin has, it would also reach significant energy consumption levels.

Still, BSV’s energy consumption remains favorable, as recent research shows that the consumption of the banking system alone far exceeds that of Bitcoin.

Is Bitcoin SV a Good Investment?

Bitcoin SV is a blockchain network with all of the fundamentals in place, which suggests it could be a hit. It’s not the fastest on the market, but it’s scalable and programmable, offering plenty to would-be dApp developers.

However, Bitcoin SV also seems to want to wrest the mantle of “OG Bitcoin” from BTC. Given the level of adoption that BTC has, that is no mean task. Furthermore, the controversy courted by Craig Wright remains a risk to the BSV ecosystem.