Bitcoin (BTC) is the oldest cryptocurrency in existence. It is also the largest cryptocurrency in terms of market capitalisation. However, over the years, there have been several offshoots of the Bitcoin blockchain. One of them is Bitcoin Satoshi Vision (BSV). This article will explore the similarities and differences between BTC and BSV, and provide an overview of each currency's history, development, and current status. Let’s begin by first understanding Bitcoin and the problems led to the creation of Bitcoin SV.
Bitcoin (BTC): What is it?
Launched in 2009, Bitcoin was the first decentralised digital currency come into existence. It was created by an individual or group of individuals using the pseudonym Satoshi Nakamoto. In a nutshell, Bitcoin is a peer-to-peer network that allows for the transfer of funds without the need for a central authority.
Bitcoin's primary goal is to be used as a global digital currency, and its design is focused on providing a decentralized and secure method of storing and transferring value. The currency has a maximum supply 21 million coins, of which more than 19.25 million coins are currently in circulation at the time of writing.
Bitcoin’s Scalability Problem
Scalability is Bitcoin’s Achilles' heel. The network suffers from extremely slow transaction processing speeds. Moreover, if there is a surge in network traffic, transactions begin to pile up and processing fees tend to skyrocket. Currently, Bitcoin is able to process only seven transactions per second. This is no match for other payment networks such as Visa, which can handle up to 24,000 transactions per second.
Various solutions were proposed to address this problem, including increasing the block size, implementing off-chain scaling solutions, etc. However, to implement these changes, blockchains need to go through a process known as a ‘fork’. This is when the network splits into two; the new version carries the updated protocol whereas the older network is either abandoned or continues to operate using the old protocol.
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Bitcoin Forks
The Bitcoin network has undergone multiple forks over the years. This is because users have put forth several improvement proposals to optimise the blockchain and keep it at par with external developments. Some of the notable Bitcoin forks include Bitcoin Cash (August 1, 2017), Bitcoin Gold (October 24, 2017), and Bitcoin SV (November 15, 2018).
Bitcoin Cash was created to implement a larger block size and improve the blockchain’s scalability. Bitcoin Gold was created to make mining more decentralized after large firms began monopolising the mining process.
Bitcoin SV (BSV): What is it?
The proponents of BSV believe that Satoshi Nakamoto’s only intended scalability-oriented solution was increased block sizes. This is why they were originally onboard with the Bitcoin Cash hard fork. BCH introduced a larger block size of 8MB which was then bumped up to 32MB. This resulted in higher processing speeds of 116 transactions per second.
However, as time went by, the developers behind Bitcoin Cash continued to implement structural changes to their protocol. BSV proponents shunned these changes, resulting in a hard fork that created BSV.
Therefore, Bitcoin SV (BSV) is a fork of Bitcoin Cash (BCH) which in turn was a fork of Bitcoin (BTC). BSV was created in November 2018 by a group of individuals led by Craig Wright, who claims to be Satoshi Nakamoto, the original creator of Bitcoin. The main goal for BSV proponents was to restore the original Bitcoin protocol. They believe that the original Bitcoin white paper had a much more ambitious vision for the technology than what is currently being pursued by Bitcoin or any of its hard forks.
This is why they shunned BCH to create a blockchain that’s more in line with Satoshi’s original vision. Moreover, they do not support the current Bitcoin blockchain as it has undergone several network updates which are not in line with Satoshi’s original whitepaper.
However, since BSV is an offshoot of the original network, it bears several similarities with Bitcoin we know today. For instance, both blockchains use the proof-of-work consensus mechanism, they both have a circulation hard-cap of 21 million coins, and they also follow 4-year halving cycle. However, there are plenty of features that set the two blockchains apart as well.
Let’s look at some of these differences
Scalability: One of the main differences between BTC and BSV is their approach to scalability. Bitcoin has a block size limit of 1 megabyte, which limits the number of transactions that can be processed per block. BSV, on the other hand, started with a much larger block size of 128MB. Over time, this has been increased to a massive 4GB.
Transaction per second: As mentioned earlier, BTC can process only 7 transactions per second. However, BSV, with its 4GB block size, can process up to 50,000 TPS.
Fees: BTC usually has higher fees than BSV because of the smaller block size limit and a larger number of unconfirmed transactions.
Smart contract support: The original Bitcoin network does not support smart contracts and NFTs. However, Bitcoin Satoshi Vision does and this could hold it in good stead in the future.
Although Bitcoin went through a terrible crypto winter last year, the prices have gone up since the beginning of the new year, and at the time of writing, BTC was trading for $18,133.35, recording a value appreciation of 4.06 percent over the previous day. BSV on the other hand was trading at $41.41.
Conclusion
BTC and BSV are both digital currencies based on blockchain technology, but there are some key differences between the two. BTC is focused on being a decentralized digital currency for storing and transferring value, while BSV is focused on becoming an enterprise-grade blockchain for business applications.
However, the community support for BSV is very minimal. It's one of the reasons why mainstream crypto exchanges like Binance, Robinhood and Bitfinex are delisting BSV from their platforms. So, while BSV does have the potential to grow, its future looks far from certain.
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