Understanding the Key Differences Between Bitcoin (BTC) and BSV (Bitcoin Satoshi Vision)
The divergence between Bitcoin (BTC) and Bitcoin Satoshi Vision (BSV) is primarily rooted in their approach to block sizes, which significantly impacts their scalability, transaction capacity, and economic philosophies.
The Choice of Block Size
The most prominent difference between BTC and BSV lies in their block size choices. BTC, following the Bitcoin Core protocol, insists on small blocks, specifically capped at one megabyte per block. This limitation is driven by a deliberate decision to prioritize decentralization over scalability.
In contrast, BSV has opted for larger blocks and ultimately, an unlimited block size. This strategic choice is aimed at maximizing the transaction capacity of the blockchain, enabling higher throughput and processing more transactions per second (TPS).
Economic and Philosophical Differences
Underlying these technical choices is a fundamental philosophical and economic difference.
For BTC, the decision to limit block sizes to one megabyte is not due to any technical constraints but is a deliberate choice to maximize decentralization. The belief is that decentralization is enhanced when the blocks are distributed widely among many people, reducing reliance on human trust. This decentralized approach is essential for BTC's design, as it ensures that the entire blockchain history can be stored on personal computers, maintaining a level of decentralization.
On the other hand, BSV is driven by a different philosophy. BSV aims to professionalize nodes based on optimized incentives to achieve the necessary level of decentralization and network robustness without limiting block size. BSV believes that the economic interests of nodes should be aligned with maximizing transaction processing and optimizing for efficiency rather than preserving a decentralized model that can become burdensome.
Current Market Understanding and Future Prospects
The current market, however, often misunderstands the fundamental economic and philosophical drivers behind these choices. This misconception leads to a misrepresentation of Bitcoin's decentralization as a nominal characteristic rather than a real benefit. Consequently, celebrities and high-profile figures like Elon Musk and Michael Saylor may be deceived by their visionary imaginations, failing to grasp the underlying principles.
Transaction Capacity and Smart Contracts
Another significant difference between BTC and BSV is their transaction capacity and support for smart contracts. BSV has already achieved an on-chain transaction capacity of up to 9000 TPS (transactions per second) and beyond. This rivaling of BTC's current 5-7 TPS is made possible by BSV's focus on professionalizing nodes and maximizing transaction throughput.
BTC, on the other hand, is limited in both transaction capacity and its ability to support Turing-complete computations and smart contracts. This design choice fundamentally restricts BTC's utility in a broader range of blockchain applications.
Conclusion
While the choice between BTC and BSV is still somewhat philosophical, the realities of their implementations will eventually play out. Each protocol represents a different approach to achieving decentralization and scalability, and their future trajectories will likely diverge based on these foundational differences.
I am convinced that BSV is the right choice because it aligns with the original intent of Bitcoin as implemented in BSV. While I initially held skepticism towards Bitcoin's antigovernment stance, studying the philosophy and economics of BSV revealed that my earlier doubts were unfounded based on the original design principles.