Bitcoin: A Tail of Blockchain BTC/BCH/BSV
It’s 1st March 2020. The Bitcoin network has split into x3 separate Blockchains. So, how did it happen and what is the fundamental difference between each of them?
Bitcoin was launched by Satoshi Nakamoto who sent the first-ever Bitcoin transaction to Hal Finney on 12th January 2009. Hal received 10 Bitcoins. At that time there was only one Bitcoin chain that was given the ticker symbol BTC.
Satoshi Nakamoto titled his creation “Bitcoin: A Peer-to-Peer Electronic Cash System”. As time went by and Satoshi Nakamoto’s true identity remained a mystery, disputes arose about what Satoshi Nakamoto intended Bitcoin to be & how it should scale. This was all despite the instructions that Satoshi Nakamoto had left outlined in his Bitcoin White Paper.
A group of developers formed a company called Blockstream who decided that they would change the protocol that was currently running Bitcoin & not scale in the way that Satoshi Nakamoto had instructed. They did away with a chain of signatures that were used to identify & validate transactions on the network and segregated them.
It’s the chain of signatures within Bitcoin that hold all the miners on the Bitcoin network to account & keep them “honest” because the signatures validate one another. This is why when Blockstream segregated the signatures and broke the Bitcoin chain by introducing Segregated Witness known as “Seg-wit”, it fundamentally changed how the network validated itself. Effectively it meant it couldn’t. From that point on BTC was no longer Bitcoin. They also decided that they would not scale the blockchain by increasing the size of the blocks as Satoshi Nakamoto described, but instead build an alternative network entirely separate to the Blockchain called the Lightning Network.
To understand more about SegWit you can read my article titled “Bitcoin: How SegWit Broke It” linked here -https://medium.com/@sirtoshitv/bitcoin-how-segwit-broke-it-4b4288081066
The Lightning Network does not use Blockchain technology to make data immutable. Instead, it sends numbers as electronic mail in channels that are specifically created directly between two different addresses. Bitcoin will only be sent through the Blockchain if a channel is closed. This creates a legal dilemma in that data sent as electronic mail carries no value, which means should a dispute arise between trading parties using the channel there would be no legal recourse to claim against until the channel is closed. It also means that data sent within a channel cannot be used within other separate channels.
Besides the legal dilemma, there was also the issue of economically sustaining the Blockchain. Bitcoin is created as a reward for recording transactions on the Blockchain. If the Blockchain is not being used, Bitcoin is not created & will eventually leave nothing to support the miners as the Bitcoin block reward continues to get cut in half every four years. This was the major catalyst for action to be taken.
Blockstream also started changing the narrative of what Satoshi Nakamoto intended for Bitcoin as “A Peer-to-Peer Electronic Cash System” to what they described as a “store of value” and “censorship-resistant money”. Both of these narratives excuse not scaling & using the Blockchain in the way that Satoshi Nakamoto described in the Bitcoin White Paper.
Animosity grew between Blockstream and other Bitcoin developers because, despite all their intended changes to Satoshi Nakamoto’s design & the issue of economically sustaining the Bitcoin Blockchain, Blockstream refused to use a different name for their project or change the ticker symbol of BTC. Changing the name of their project along with a new ticker symbol would have given holders of BTC a clue about what was going on & may lead to legal challenges in the future relating to Passing off… https://en.wikipedia.org/wiki/Passing_off
Bitcoin Cash (BCH)
This resulted in a group of Bitcoin developers following the same instructions that Satoshi Nakamoto left in the white paper & yet having to use an alternative name & ticker. The new name given to Satoshi Nakamoto’s Bitcoin was Bitcoin Cash & it had the ticker symbol of BCH, which came into effect on 1st August 2017.
Amongst the developers working on what was now called Bitcoin Cash (BCH) were yet another group of developers who saw Bitcoin as a way to conduct criminal activities such as drug dealing, gun-running, human trafficking and a whole host of abhorrent, morally reprehensible, unethical activities that criminals like to engage in. This lead to a hypocritical group of developers wanting to change Satoshi Nakamoto’s Bitcoin design yet again to suit their own criminal agenda. Their proposed changes were efforts towards making anonymous payments.
The issue with anonymous payments is that when two parties are involved in a trade deal, should a dispute arise and one part wants either their money back or the good/service they expected, they must be able to prove to a court that they have “reasonable expectation”. This is done by proving that they have fulfilled their side of the agreement & sent over the Medium of Exchange. If the payment was made anonymously it cannot be proved that it was either sent or received by the party involved. Legal recourse in trade is fundamental to the utility of a Medium of Exchange & so anonymity creates a closed market because commercial/global trade would simply never use such a method of payment. Also, being digital means that the single entity who added the anonymity is no longer accountable to anyone & therefore has complete control of the system making it 100% centralised & therefore utterly worthless. This is why Roger Ver et al were discussing implementing a miners TAX in the BCH network.
To understand more about the law relating to anonymous payments you can read my Medium Article titled “Bitcoin: Reasonable Expectation within Trade” lined here — https://medium.com/@sirtoshitv/bitcoin-reasonable-expectation-within-trade-f5a099ae6f6a
Bitcoin Satoshi Vision / Bitcoinˢᵛ (BSV)
As there was no chance of agreement over the fundamental ideologies of anonymity the same situation occurred with those wanting to change the protocol refusing to change the name and ticker symbol. This lead to Bitcoin continuing under yet another different name & ticker. The new name given to Satoshi Nakamoto’s Bitcoin was “Bitcoin Satoshi Vision” & it had the ticker symbol of BSV, which came into effect on 15th November 2018.
These are the fundamental differences between BTC, BCH & BSV: BTC does not want to scale the Blockchain, which will eventually lead to its demise. BCH wants to use Bitcoin for criminal activity. BSV wants to use Bitcoin as a peer-to-peer electronic cash system.
If you wonder why Blockstream wants to see the demise of BTC all you need to do is look into where their funding came from. BCH want to go for the dark markets, which is estimated to be worth $1.8Tr. However, global e-commerce, which is just one of the markets BSV is going for is worth $29Tr & Satoshi Nakamoto has said that market alone is “too small”. I know where I’d put my money.
“Bitcoin: A Peer-to-Peer Electronic Cash System” created by Satoshi Nakamoto now has a protocol named Bitcoin Satoshi Vision, known as Bitcoinˢᵛ with a ticker symbol (BSV).
Satoshi Nakamoto had a vision. That vision was Bitcoin. Bitcoin is Satoshi’s Vision. Bitcoin is BSV.
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