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The Bitcoin Wars - Is BTC or BSV the 'Real' Bitcoin?

Perhaps you might have already heard - Bitcoin (BTC) now has two ”offsprings” on the market: Bitcoin Cash (BCH) and Bitcoin Satoshi Vision (BSV). Each of these cryptocurrencies has their own features, rate and market cap. Let’s take a closer look, and see what differentiates these currencies that seem so similar by name, writes Oliver Taylor.

When Bitcoin (BTC) was first launched back in January 2009, it was introduced as a revolutionary, two-way digital payment system that promised to upend the banking and financial system. However, as Bitcoin’s user base steadily expanded, the network was soon inundated with an ever-increasing number of transactions. This caused Bitcoin to be seen as a slow and costly option for regular day-to-day transactions, leading to less frequent use of the cryptocurrency for everyday purchases.

Upgrades to its code thus became necessary in order for it to become more widely accepted and meet the increasing market demand. And yet, there was not a unified consensus on what these changes should entail.

In 2017, a conflict within the Bitcoin development community divided the community into two distinct factions. One side wanted to keep Bitcoin as it was, while the other sought to further increase its scalability. This led to a hardfork of Bitcoin resulting in the creation of Bitcoin Cash (BCH), which increased its block size from 1 MB to 32 MB in order to make the network more scalable. The project gained traction and began growing steadily until 2018, when another controversy arose due to several developers arguing that Bitcoin Cash’s scalability was still not sufficient enough for it to become a globally accepted network.

As a result of this debate, further measures had to be taken in order to improve the scalability of Bitcoin Cash and make it more accessible on a global level. A new camp, led by Australian computer scientist Craig Wright, decided to hard-fork Bitcoin Cash and once again split the network. The result of this fork became Bitcoin SV (BSV), whose block size is much larger than that of Bitcoin or Bitcoin Cash.

Understanding the Hard Fork Chain Split of Bitcoin Cash

Supporters of Bitcoin SV firmly believe that it is the best embodiment of the original vision of Satoshi Nakamoto, the anonymous creator of Bitcoin. Curiously enough, Craig Wright has claimed that he is, in fact, the real Satoshi Nakamoto.

Bitcoin SV varies from its predecessor, Bitcoin, in various ways. Most notably, it increases the default block size from 1 MB to a whopping 128 MB; achieving what some call almost unlimited transactions per second and a low transaction fee of 0.000013 BSV per transaction (roughly equivalent to $0.0019). Already these changes have allowed Bitcoin SV to process 9,000 transactions per second with remarkable efficiency.

Alas, the deep divide between Bitcoin Cash and Bitcoin SV was akin to a civil war, pitting supporters of Bitcoin ABC (short for Adjustable Blocksize Cap) - with its block size of 32 MB - against those in favour of Bitcoin SV’s increased 128 MB limit. The split ushered in dramatic changes, sending the price of Bitcoin Cash plummeting from $425.01 on 14th November to $289 on 15th November, while BSV traded at around $96.50. In the meantime, the new blockchain allowed both sides to pursue their own visions for the currency’s future, distinct from each other in terms of rules and protocols for processing transactions.

This hard fork has sparked an unprecedented rift in the cryptocurrency world, with two opposing factions. On one side stands Roger Ver and Jihan Wu, champions of Bitcoin Cash that they believe is truer to Satoshi Nakamoto’s vision of a peer-to-peer electronic transaction system. On the other side are Craig Steven Wright and billionaire Calvin Ayre, who are spearheading the Bitcoin SV movement and touting its greater scalability and capacity for more transactions per second - making it a better fit for mainstream usage.

The disagreement between the two camps, Bitcoin Cash and Bitcoin SV, focused on the scalability of Bitcoin Cash. While the Bitcoin ABC faction argued that a block size of 32 MB would be adequate for their current network requirements, their counterparts in the Bitcoin SV camp felt that increasing the block size to 128 MB would facilitate more transactions per second and effectively make this cryptocurrency more accessible to mainstream consumers. This disagreement sparked a fierce debate as each side tried to defend its stance on how best to optimise this digital asset for widespread use. Meanwhile, BSV developers swear that the cryptocurrency fully complies with all the provisions of Satoshi Nakamoto’s White Paper, published back in October 2008.

The Bitcoin Wars have caused a great deal of controversy and tumult within the cryptocurrency world, prompting many to ask questions about the true value and future opportunities for each coin.

Comparing Bitcoin Core and Bitcoin Satoshi Vision

Bitcoin Core, the original version of cryptocurrency created in 2009 and also commonly known simply as Bitcoin, operates on a decentralised network that allows for peer-to-peer transactions without any central governing institution. This decentralised network has proven to be an effective way to securely and quickly transfer funds between two parties. However, it has a limited block size of 1 MB, meaning it can only handle a maximum of 7 transactions every second. On the upside, the decentralisation of the Bitcoin Core network provides users with an extra layer of security as there is no single point of failure, making it one of the most reliable forms of financial exchange available today.

Bitcoin Satoshi Vision (BSV), in turn, provides increased scalability with its much larger block size limit of 128 megabytes, enabling a substantially higher volume of transactions to be processed per second. Moreover, BSV has added micropayment capabilities and is committed to restoring the original vision of Bitcoin set out in Satoshi Nakamoto’s white paper – a digital cash system that empowers individuals to make financial transactions without going through third-party intermediaries. As such, BSV offers an alternative to traditional banking systems that can facilitate more efficient financial transactions at reduced costs.

Despite their differing approaches, both Bitcoin Core and BSV are built on the same foundation of a decentralised digital currency, running on distributed ledger technology. Where they differ is in the scalability and block size limit they prioritise; Bitcoin Core opts for greater security and decentralisation, emphasising its decentralised nature, while BSV puts more emphasis on scalability and focuses on mainstream adoption. This difference in focus has caused a major point of contention between the two camps, with each side arguing that their approach is best for long term success.

Craig Wright’s and BSV’s Impact on the Cryptocurrency Sector and Legacy Banking

Craig Wright, one of the key individuals behind the development of Bitcoin SV, has been a much-debated figure in the cryptocurrency space. While sometimes being regarded with suspicion and doubt, he has adamantly persisted in his claims that he is Satoshi Nakamoto, the mysterious creator of Bitcoin. Yet despite this skepticism, Wright’s supremacy in the Bitcoin SV community remains undeniable; his influence on BSV’s evolution has paid off greatly, as his actions have had a profound and lasting impact on its growth and advancement.

The Bitcoin SV cryptocurrency itself has also been the subject of significant pushback from the crypto and financial community at large. Numerous exchanges and brokerages have delisted the coin, with some even erroneously labelling it a ”scam coin”. Unfortunately, this has overshadowed the fact that BSV also has a passionate base of supporters and entrepreneurs who view it as an answer to scaling and mainstream adoption of digital currencies. These people see BSV as offering tangible solutions for mass-market access to this technology, firmly believing these features make it a more viable option than other existing cryptocurrencies, enabling efficient usage on a much larger scale.

The traditional banking industry is right to feel threatened by the potential of Bitcoin SV, as the latter’s large block size limit gives it an advantage over other cryptocurrencies in terms of scalability and mainstream adoption. With the capability to process high volumes of transactions, BSV could make existing payment systems obsolete, due to its ability to support micropayments. It’s much more cost-effective for businesses to use this technology, which makes it a compelling alternative to traditional banking solutions.

As BSV continues to evolve and develop, banks are already starting to pay attention and considering how this technology can disrupt their existing models. While still relatively niche, the impact of BSV on the banking sector is something that cannot be ignored and its potential should not be underestimated. With its remarkable capacity for scalability and efficiency, it stands to revolutionise the way we process global cryptocurrency payments.   EG

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