What is Bitcoin SV and How It's Different: Some Essentials You Need To Know
- By Kimmy Maclang
Cryptocurrencies gained traction in recent years due to the enormous potential it carries, particularly with the use of blockchain technology. Introduced as a concept in 1991 and first actualized through Bitcoin's creation in 2009, blockchain relies on a decentralized peer-to-peer network to store data and prevent it from being tampered.
Bitcoin and the Rise of Cryptocurrencies
In the case of Bitcoin, blockchain refers to a ledger based on data sets that are linked to each other. Each data set is connected to the one before it through cryptography. With this technology, nearly anyone with internet access can buy and trade cryptocurrencies securely and anonymously.
With the success of Bitcoin, other 'altcoins' and tokens were developed and launched. Altcoins are other types of cryptocurrencies that function and are traded for various applications and purposes. Some cryptos like Litecoin use Bitcoin's original framework to implement changes and improvements. Other altcoins—Ripple, Stellar, and Waves, to name a few—have developed their own self-supporting systems.
Tokens, on the other hand, are not meant to be used as money, as they are used to describe a function. While they can be used to represent value, the tokens themselves are not worth anything. For example, Ethereum, a platform that focuses on decentralizing mobile applications, uses Ether as a token within its system.
The Forks on the Bitcoin Road
Bitcoin SV—known in full as "Bitcoin (Satoshi's Vision)"—is a derivative of Bitcoin Cash, which is also an offshoot from the original Bitcoin. The origins of both cryptocurrencies can be traced back to the 2008 Bitcoin Whitepaper, written by Bitcoin's founder under the pseudonym Satoshi Nakomoto.
The initial fork between Bitcoin and Bitcoin Cash occurred in 2017, as a group of miners and developers believed that they had the solution to enhancing Bitcoin's capacity to address the growing demand. By increasing the size of the block to 8MB from the base 1MB, Bitcoin Cash was able to increase the number of daily transactions dramatically.
Proponents of Bitcoin Cash believed that this alteration was necessary to bring Bitcoin closer to Satoshi's desire to make the currency more accessible to everyday use.
In 2018, blockchain research and mining company nChain clashed with Bitcoin Cash backers over the implementation of certain features and the resistance to further increase the blockchain's block size. The resulting disagreement led to the creation of Bitcoin SV, which aims to comply strictly with the ideas proposed in the Bitcoin Whitepaper.
Bitcoin SV: Far from Perfect
Currently, Bitcoin SV's block size sits at a whopping 128MB, allowing for an even larger amount of transactions per day with increased processing time. Along with Bitcoin SV's other changes, its current form allows for new developments to further increase stability and scalability. Bitcoin SV's developers also intend to prioritize security and fast transaction processing times with its future updates.
Part of the claims the currency has to offer includes "[the ability to] replace every payment system in the world with better user experience, a cheaper merchant cost, and a safer level of security." With current data, transacting on Bitcoin SV will cost nearly 11,000 times less than with Bitcoin, making it a promising option for those looking to reduce costs.
While there is an emphasis on Bitcoin SV as peer-to-peer electronic cash, its blockchain is seeing use for non-currency purposes. Weather app WeatherSV uses the currency's blockchain to record large amounts of weather and climate data. Meanwhile, online platforms Memo and Twetch (not to be confused with the streaming platform) function as blockchain-based social networks and content platforms.
However, like any cryptocurrency, Bitcoin SV has its corresponding disadvantages. The currency has seen more limited adoption in the market, partly due to the controversy surrounding its founder Craig Wright. Wright has come under fire in the crypto community for his repeated claims of being Satoshi Nakomoto, Bitcoin's pseudonymous inventor.
The slow adoption of Bitcoin SV has made the currency's theoretical capacity greatly overtake its actual usage. This means that the advantage of its massive block size offers is yet to be tested.
Additionally, this block size ends up creating difficulties for propagating blocks through the blockchain network. Because of this, the risk of creating accidental forks increases. However, this risk is mitigated by its centralized mining system, making it easier to reorganize the network following the forks.
Staying True to the 'Vision'
All in all, Bitcoin SV is a cryptocurrency working towards greater accessibility for both institutions and individuals alike by offering a larger block size. However, it is far from perfect in its current state—controversies surrounding its founding, combined with the consequences of its block size, mar its popularity.
Only time and keeping up with the latest Bitcoin SV news can tell where this currency will go and how close it will get to enacting the vision that Satoshi Nakomoto had over a decade ago.