BTC and BSV, what is the real difference?
On the surface, the most prominent difference between BTC (Bitcoin Core) and BSV (Bitcoin Satoshi Vision) is the choice of block size. While BTC insists on small blocks (one megabytes per block), BSV has opted for big blocks, ultimately with unlimited block sizes.
What is behind this, however, is the fundamental difference in economics and philosophy.
BTC’s choice is not due to any technical limitation, but deliberate in order to maximize decentralization, believing that only when the blocks are in many people’s hands can the level of decentralization necessary to reduce reliance on human trust be possible.
BSV’s choice is to maximize the system’s transaction capacity, believing that professionalization of nodes based on optimized incentives is the best way to achieve the necessary level of decentralization.
BTC’s choice is shortsighted.
Bitcoin network is sustained by nodes. In the beginning, nodes make money by mining bitcoins allocated to each block. It is designed as a subsidy. The subsidy mechanism in mining is a bootstrapping strategy that has an inherent time limit. The system must achieve utility-based external success by the time limit, or it will collapse. How far (or how generous) the time limit can go is determined by the investor psychology, but is without doubt not unlimited.
The current market does not understand this most fundamental point about bitcoin, and as a result individuals with the ranks of Elon Musk and Michael Saylor are deceived by their own grand imaginations..
(1) BSV — a small world network of professional nodes with their economic interests tied to maximized transaction processing and optimized to live and thrive, not commit suicide, competitively scrutinized and checked by each other, working under instant monitoring by millions of merchants, who in turn are monitored by billions of users at any given second; having already reached on-chain transaction capacity of 9,000 transactions per second (TPS) as a result, and theoretically unlimited TPS (all transactions on-chain, by which I mean the Bitcoin Blockchain, not any other cheaply built chains pretending to be blockchain);
(2) BTC — a similar small number of professional nodes but with their economic interests gutted and restricted to only a temporary bootstrapping mining interest by design, unable to ultimately free themselves because the Core requires the system to allow millions of amateurs to pretend to be equal “nodes” as well, in order to form a society with an illusionary kind of decentralization with no need of any human trust; perpetually limited to 5–7 on-chain transactions per second.
Those are the choices.
At this point of time, it is still quite philosophical, as we all agree that eventually the reality will play out to force itself upon our debating minds. At least on a theoretical basis, anything is possible from this point. One can be right, the other wrong, or both can be right in its own limited sphere, but both can be wrong too.
I am convinced that BSV is the right choice. I started with BTC, loved every aspect of it from a technological point of view, but was deeply skeptical of its antigovernment philosophy (or independence from government, not antigovernment, as many BTC supporters like to emphasize). I did not believe Craig Wright was Satoshi. In fact I had a negative impression of him, a very superficial impression I should admit because I did not listen to what he was saying. I did not want to. But once I came to study the philosophy and the economics of BSV, I quickly realized that all my earlier skepticism of Bitcoin should not have existed according to the original bitcoin design.
BTC’s small blockers’ fundamental objection to BSV’s design is based on their belief that a Small World Network (SWN) of professional nodes cannot be trusted.
But they will soon find that the reality will be the opposite. Putting nodes in many amateurs’ hands to achieve decentralization is an illusion. The fact: not only has BTC network already ended up being concentrated on just a small number of professionalized miners anyway, but also that the miners have a highly problematic type of concentration in that they are geographically concentrated on areas where the electricity is either cheap or can be stolen. Presently, that location is China.
Such geographic concentration is unavoidable on BTC because there’s only one factor that measures the success of a miner: the cost of block hashing. It is a single gravity.
The situation is different with BSV, and is becoming more more different. BSV is designed to have increasingly greater portions of nodes’ computational power focused on transaction processing, and smaller and smaller portions of that may remain for block hashing. Unlike block hashing, the transaction processing has to be geographically optimized. For example, businesses in North America are likely to prefer their business transactions to be first processed by a node located in that region (and of course eventually communicated to and accepted by the other nodes), both because of legal/regulatory reasons, but also because of high-speed transaction competition requirements.
As a result, it is expected that BSV will end up having a network of professional nodes that are properly distributed over the world on different continents and different economies according to the global economic reality. That is far better picture than the current BTC distribution in which nodes are not only professionalized in reality anyway but also geographically concentrated.
Still can’t trust the nodes? The human reality is that you should not trust others to act on your interest, but can and must rely upon the notion that they will act on their own interest. Without that is total insanity. Human society cannot continue to survive on total insanity. Imagining a technology that could somehow manage such an imaginary insane society is delusional.
Misaligned economic incentives, not something intrinsically evil as imagined by its opponents, is why socialism fails.
And that’s also why BTC is a wrong choice made based on a wrong philosophy and wrong economics.
In contrast, BSV is a technology-enabled economic system that INTRINSICALLY promotes collaboration/competition, but EXTRINSICALLY gravitates to domination, and will be proven to be the greatest marvel of human economic/technological achievement.
BSV has been proven to work, you just don’t know about it now
“The best time to invest into a technology is when you know it works but 99% of the people don’t,” according to Michael Saylor.
But the statement is true to a much greater extent with BSV than BTC. If it is 99% in the case of BTC, it is 99.999% in the case of BSV.
And BSV has been proven to work, you just don’t know about it now.
While BTC continues to try to prove it to be the only thing it wants to be, namely a “store of value”, BSV is quickly becoming the true infrastructure that channels the “monetary energy” (borrowing Saylor’s phraseology). Just think about it, which one is more like an “monetary energy”, an effective engine that can power the Internet of Value (IoV) with extremely low transaction cost, or “a store of value” that competes with gold?
As an engine of “monetary energy”, BSV wins without competition, as BTC does not even purport to function like one. Even as “a store of value”, it is too early to call the winner. We might have one in about 3 to 5 years.
Following another great Saylor analogy, gold is like a rock (as a weapon), BTC a machine gun. But one day the world may see a precision-guided smart weapon system, and that will not be BTC (and cannot be, as BTC has already autocastrated itself not to be).
But BSV is far more than monetary energy. The BSV engine also powers the next generation Internet.
Altogether, BSV is powering four great transformations simultaneously:
(1) decentralization of money;
(2) decentralization of assets through tokenization;
(3) decentralization of data; and
(4) decentralization of computation (different from distributed computation).
All these great transformations are enabled by Bitcoin Satoshi Vision (BSV) based on the bitcoin whitepaper and rapidly growing further developments in the BSV ecosystem.
Meanwhile, BTC has gone astray and become a niche antigovernment money. Some BTC believers like to protest that BTC is not antigovernment but “government independent”. People fell in love with the “government independent” narrative, but did not know it was a carefully schemed lure.
The psychology behind different bitcoins
Semantics aside, one should study the history of bitcoin featuring a division between “anticorruption” (of Satoshi) and “illicit freedom” (of the Core developers). The result is deep ongoing hatred of Satoshi by the Core, who still controls the narrative. The media and the mass have been fooled because they don’t understand what bitcoin really is (yet everyone pretends to without understanding even the TITLE of the bitcoin white paper).
With the exception of just a few true insiders in the Bitcoin Core who had much more corrupt motivations due to real economic and reputational self-interests, most people, including the widely recognized Bitcoin experts, have simply fallen into a psychological trap. They imagined a personality of Satoshi Nakamoto, all based on the Core narrative and their own imagination, making it almost impossible to accept the real Satoshi on an amicable basis.
It is especially hard when the real Satoshi has a personality that doesn’t go easy with others (he is actually an Asperger’s patient), PLUS a strong conservative and capitalism worldview that invokes objection, even detestation, among the leftists and socialism-leaning people in the Bitcoin Core and its sphere.
Then there are some people who are somewhere in between. Vitalik Buterin is an example. These individuals do have a strong economic incentive to reject the real Satoshi, but at the same time, they are also acting on their ideology, making them at least half-sincere (although totally wrong).
Bitcoin & Blockchain
Truth about bitcoin and blockchain technology