Bitcoin: History and Differences of BTC, BCH and BSV
Bitcoin, Bitcoin Cash, Bitcoin SV. Who’s supposed to be in control? Reason enough to see how the projects came about and how they differ.
Almost ten years after the birth of Bitcoin, the electronic peer-to-peer money system, there are several technologies that claim to be „the true Bitcoin“. The most popular candidates at the time of writing are all in the top 10 crypto currencies in terms of market capitalization.
Once upon a time, Bitcoin profit
It all started with the Bitcoin profit debate. It began in early times, well before the escalation of the Bitcoin profit conflict. In 2013, the block size limit implemented by Satoshi Nakamoto was discussed on the then central ideas marketplace, BitcoinTalk. Fortunately, these discussions can still be followed today. For anyone who doesn’t have the time to get through:
One faction, including Satoshi Nakamoto, who had already gone into hiding at the time, said that there was no need for a fixed block size. The hardware would improve over time and support larger blocks.
The other side argued that as the block size increased, it would become increasingly difficult to operate a full node (a full node is a node in the Bitcoin network that has stored the complete transaction history, the block chain, and can thus verify each individual transaction itself without having to rely on a third party). This would mean that only professional companies with money for hardware and an excellent Internet connection would be able to verify the blockchain. This would provide an attack vector for authoritarian governments who want to censor the network.
Satoshi Nakamoto himself had the upper limit for the block size built in as a quick fix. Abolishing it would mean a fundamental change in the rules, a hard fork. The Bitcoin protocol did not change at the time, but the seeds of conflict were sown.
The Scaling Debate about Bitcoin profit
In 2017, the conflict continued to escalate. Bitcoin profit enjoyed increasing popularity. This increased the number of Bitcoin profit transactions. However, due to the limited block size, the transactions were backed up. Anyone who wanted to get a transaction into a block promptly therefore had to pay a higher transaction fee. Users began to compete for space in the blockchain and transaction costs rose. Bitcoin’s usefulness as a money system for payments declined as a result. A solution was already in the works, SegWit (Segregated Witness).
With SegWit (Bitcoin Improvement Proposal 148), the digital signatures of Bitcoin transactions would no longer be stored in the blockchain. Therefore, there would also be more space in the blockchain for transactions – without increasing the block size. SegWit would be a fix for transactionalleability. Transaction Malleability describes the change of unconfirmed transactions without the transaction becoming invalid.
At the same time, a rumour made the rounds: the ASICBoost. The Bitcoin mining hardware manufacturer Bitmain should have managed to optimize its ASICs hidden in order to use less energy than the competition. This trick, it was said, would happen hidden and of course Bitmain denied all accusations. But Bitmain was an opponent of SegWit. SegWit would make the suspected ASIC boost impossible, so the economic incentives spoke for themselves.
Two camps were formed: Bitcoin SegWit and Bitcoin Unlimited. Bitcoin Unlimited was the idea to abolish any limitation of the block size and to leave the size of the blocks to the miners. For the Bitcoin Unlimited warehouse, it was primarily Roger Ver, the Bitcoin.com CEO, who came onto the scene, but also Bitmain co-founder Jihan Wu. Bitcoin SegWit was represented by several Bitcoin core developers, Blockstream and others.