CRYPTO SPECIAL REPORT: Bitcoin SV — The “big block” Bitcoin targeting enterprise adoption

CRYPTO SPECIAL REPORT: Bitcoin SV — The “big block” Bitcoin targeting enterprise adoption

Bitcoin SV believes its protocol best represents the original vision for Bitcoin. Specifically, this means that Bitcoin SV does not limit its block size and believes that developers have too much power relative to miners. Today, the network is primarily used for storing metadata. BSV’s goal over the long-term is to provide usage both as a payments network and commodity data ledger (metadata storage). With its ambitious goals, Bitcoin SV is contributing to the necessary protocol design experimentation in crypto. No cryptocurrency has achieved global adoption, thus the space needs projects to continue tinkering with protocol designs to find the optimal one that can accommodate global adoption.

  • Bitcoin SV believes its protocol more closely reflects the original Bitcoin design than does Bitcoin Core or Bitcoin Cash. Specifically, BSV believes BCH was wrong to add opcodes and make other changes not in the original protocol, and will soon be removing its block size limit; BTC and BCH limit block sizes to ~2MB and 32MB, respectively (though BTC now technically uses a “block weight” limit) (Slide 14). The challenge for BSV will be to prove that its protocol is not only the original Bitcoin design, but the best design for wide consumer and business adoption (Slide 9).

  • Protocol design requires tradeoffs between scalability, security, and decentralization. Bitcoin SV can achieve ~700 TPS at 256MB miner-chosen block limit (slide 14), but mining is concentrated with two pools >40% of total network hash power.Vitalik Buterin famously coined this idea of the “blockchain trilemma.” For example, BSV’s hash power concentration and cost to run a full node are such that its network security is ensured through a small group of ecosystem supporters. The differences between BSV, BTC, and BCH can be similarly broken out between use case, balance of power, and scalability (Slide 10).

  • BSV is the biggest block Bitcoin. BSV believes corporates will require network throughput capacity much higher than what is currently needed before they are comfortable using the network. Daily transaction value on the network averages ~$25mm with blocks 0.43% full vs. BTC daily value ~$2.6B and its blocks typically ~50% full (Slide 14).

  • Today, the network is primarily used for storing metadata. Over the long-term BSV wants to be a commodity data ledger for the internet. For example, the two most active apps on BSV are WeatherSV and Preev. The former records weather data on-chain, while the latter is a crypto exchange rate calculator. These transactions are low value but high volume; these microtransactions are supported by BSV’s low fees as a percentage of on-chain volume (Slide 21).

  • BSV could be more profitable to mine due to the higher risk associated with a smaller project. Though,  mining revenues are currently very small at ~$0.30mm per day compared to BTC $17mm and BCH $0.50mm (Slide 28). But, currently BTC is slightly more profitable to mine than BSV (1.2x vs. 1.1x price-to-breakeven).

Bottom line: It’s still very early days for cryptocurrency technology and there is little certainty around what the winning implementation could be. BSV is contributing to the necessary experimentation to test which protocol design is most likely to achieve broad adoption. The data shows that the network lags BTC and BCH transacted value, but it’s go-to-market strategy has advantages that could give it an edge in the enterprise market over the long-term.

Overview of Bitcoin SV  (slide 7)…

CRYPTO SPECIAL REPORT: Bitcoin SV — The “big block” Bitcoin targeting enterprise adoption

ORIGINS: Irreconcilable protocol disputes caused hard forks (slide 8)…

BSV is targeting market adoption with its “big block” strategy (Slide 14)…

BSV mining profitability slightly lower than BTC, BCH (Slide 28)…

Disclosures (show)

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