Popular Science | What exactly are BTC, BCH, and BSV fighting for?

Hi everyone, I go by the name Mandee. Lover of good things, fun to be with, avid writer and lots more. This is my first article here on read cash. I hope y'all have a good time while reading it.

In 2017, BCH was forked from BTC. In 2018, BCH was split into the Bitmain system (later regained the title of BCH) and the Nchain system (later named BSV).

When the block capacity of BTC gradually approached the upper limit a few years ago, the issue of expansion has been discussed for a long time. The game between miners, developers, and users is relatively chaotic. In the case of disagreement, the fork becomes the only ending.

As a result, BCH was forked from BTC on August 1, 2017, and the block size was increased from 1M to 8M, claiming to be the true embodiment of Satoshi Nakamoto's “peer-to-peer electronic cash system”. On November 15, 2018, due to the divergence in the future development direction of BCH, BCH was split into Bitmain-based BCHABC (the former later regained the title of BCH) and Nchain-based BCHSV (later named BSV).

At this point, Bitcoin has finally formed a trio of nations. BTC electronic gold, BCH electronic cash and BSV global ledger. The next chapter will tell you what they are fighting for and their respective advantages and disadvantages.

1• BTC

The goal of BTC is to allow an ordinary computer to run a full node, making BTC truly "decentralized". In other words, as long as there is still a computer running BTC in the world, BTC cannot be killed.

This method has its advantages of security and "decentralization", but at the same time, because of the "ultra-small blocks" of 1M and the birth of ASIC mining machines, home computers have become a "delusion" for nodes.

In December 2017, the transfer fee for BTC reached a maximum of several tens of US dollars. It is said that there was also a netizen's transfer, which did not arrive until several weeks later. At this point, the road of BTC's "electronic cash" has been temporarily ended, and BTC has become a "good-looking but not easy-to-use" currency, embarking on the road of "electronic gold" stored value.

In 2019, the Lightning Network began to become popular, and at the beginning of the year there was a lot of fire. At that time, the "Torch Relay" of the Lightning Network was almost spread to all major WeChat groups. However, it should be understood that the Lightning Network is currently only a rudimentary form, and there are very few businesses that actually support the Lightning Network. The next 1-2 years, especially before and after the Bitcoin block reward halving next year, will be a critical development period for the Lightning Network. The specific reasons will be seen below.

2• BCH

The underlying philosophy of BCH is to reproduce the meaning embodied in the title of the white paper "Electronic Cash", because the current block capacity of BTC really cannot handle the most important function of cash "payment".

Compared with the underlying logic of BTC locking 1M cell speed and BSV's unlimited expansion, BCH is more "flexible" at the bottom, or it has not found its own real underlying logic. The size of the block is enough and not blocked, and if it is not enough, expand it; the Lightning Network looks good, but it will not be deployed for the time being, but it does not rule out that it will be deployed in the future; the smart contract is good, and it is always right to try it. However, the dissolution of Wormhole and the development team of Copernicus can be said to have declared a temporary failure and an end to the direction of smart contracts.

Judging from the recent development route of BCH, there is another intention to return to pure "electronic cash". This may be a good thing. Finding a route and insisting on achieving it will at least be qualified to participate in this three-nation war for hegemony. Was vacillating, unable to find a mainstay, after all, it was inferior.

3• BSV (BSV is called "Satoshi Nakamoto Vision" for a reason, and I will briefly discuss it here)

The underlying philosophy of BSV is "protocol locking + free game + unlimited expansion".

Because what is to be done is a global ledger, not electronic cash or gold, the development path of BSV is mainly aimed at the To B market. It wants to make a blockchain that can really attract large companies and institutions to use, or in other words, a stable Agreement, a global ledger that cannot be tampered with.

Therefore, the block size must be expanded first. A G is at least, and there will be a TB-level expansion plan in the future.

As for the ambition of this global ledger, it is called Metanet on BSV. The ultimate goal is to use the current Internet as a side chain to form a value network for data transmission and storage without tampering. To put it simply, it is BTC+ETH+IPFS (Filecoin), basically the rhythm of ten thousand chains.

Roots of Disagreement

Below the bottom layer just now, in fact, there is a deeper bottom philosophy, namely: Where does the value of Bitcoin come from?

At this point, the bottom philosophies of BTC and BCH are consistent. The presentation of the value of BTC (BCH) itself is "currency", and becoming currency (payment function + stored value function) is both the initial form and the ultimate form of BTC (BCH). The source of its value is mainly as the first form of the blockchain. A project, a huge consensus and "unkillable" ability accumulated over the past ten years.

BSV does not agree with this. BSV believes that whether it is shells or gold, or all things that have served as currency in history, first have use value, and then after a long time consensus, they become currency attributes. In the past 10 years of Bitcoin, the origin of its use value has been the transfer of funds on the dark web. In other words, the core of the "currency consensus" formed by the "underground illegal currency consensus" cannot be self-certified or self-consistent.

The bottom logic of BSV believes that Bitcoin itself is the wheel, and the global ledger (Metanet) is the car. Bitcoin is the universal currency on this global ledger. Its purpose is to provide fuel for this car and maintain the security of this non-tamperable ledger. And provide economic incentives. After the use value, the "universal currency" or "money" attribute is extended. It's just that when building a car, you need to build the wheels first, and then put the wheels on the frame.

In addition, BSV also does not agree that BTC or BCH is “unfriendly” to regulation. It believes that blockchain technology should help commercial institutions, embrace regulation, follow a compliance route, and expose crime and evidence to the sun. Above the block chain.

Unlike the "Code is Law" that many blockchain geeks believe in, BSV believes that the world is very complicated, "Code is Code, Law is Law".

What are their advantages?

In the next 5 to 9 years, the current situation of the Three Kingdoms contending for hegemony is likely to be broken, and the current situation of three parallel developments is very likely to cease to exist. The reason is simple: everything comes from the sentence in Satoshi Nakamoto’s earliest post. words:

In another ten or twenty years, block rewards will become too small, and transaction fees will become the main compensation for nodes. I'm sure that within 20 years, the transaction volume (on the chain) will be very large or there will be no transaction volume.

The current block reward is 12.5, which is halved to 6.25 in one year, 3.125 in 5 years, and 1.5625 in 9 years. The block reward is almost one-tenth of what it is now, and it can no longer be the main source of income for miners. So, what will be the competition at that time is actually the transaction volume and price on the chain.

All three use the SHA256 algorithm. If quantum computers do not threaten Bitcoin within 9 years, then the battle for computing power and the battle for miners will determine the final victory. If there is no threat of quantum computers, which company is the first to decide to change the algorithm, it is actually a failure.

So, from this point, it is easy to infer what will be the winners and losers of the three in the next few years:

1• BTC

Advantages: Unparalleled huge consensus, the "real Bitcoin" in the eyes of most people has begun to attract institutions and real big funds to enter the market, and it is currently the absolute king.

Winner: If BTC wants to maintain its security and attract enough miners to maintain the network, it must achieve any of the following two points before halving several times. If both points are achieved, the advantage will become very significant. Big: very high price; enough on-chain transaction volume brought about by the large-scale popularization of Lightning Network and merchant support.

2• BCH

Advantages: Backed by the big tree of Bitmain, it has a unique advantage in mining machines. When someone is not optimistic about the use value and congestion of Bitcoin, the first thing he thinks of is probably BCH.

Winners and losers: BCH's winners and losers, strictly speaking, are not in themselves, but in BTC, especially the Lightning Network. Originally, BTC was used as gold and mainly used for storing value, and BCH was used as cash and mainly used for payment. However, the Lightning Network undoubtedly moved the cake of BCH.

Therefore, the winner of BCH lies in its more advantageous experience and lower handling fees than the Lightning Network. Of course, the more important thing is the support of merchants at least close to BTC. After all, if no merchant accepts BCH as a means of payment, it will be useless as a "cash" currency, and the transfer between users alone cannot support enough on-chain transaction volume. After several halvings, miners The handling fee will be very low.

3• BSV

Advantages: Nchain has hundreds of blockchain patents, various application developments in full swing, and the possibility that CSW is Satoshi Nakamoto.

Winner: If you put aside the issue of CSW identity, the winner of BSV is actually competing with the underlying public chains such as ETH, Cosmos, and EOS in terms of development cost, user experience, security, and customer groups, including The competition between UTXO and Account models, the competition between PoW and PoS, DPoS in small world networks, and so on.