First Came Bitcoin, Then Came Bitcoin Cash and Bitcoin SV

Beginner’s Guide / 10.03.2020

Understanding the difference between Bitcoin, Bitcoin Cash, and Bitcoin SV first requires looking into what hard forks are. They explain how the two latter networks or cryptocurrencies were created from Bitcoin.

Blockchain developers forked Bitcoin to create Bitcoin Cash (BCH) the same way they forked Bitcoin Cash to create Bitcoin SV (Satoshi Vision, BSV). So in a way, it is right to say that BCH and BSV are tweaked versions of BTC.

Hard forks are irreversible or permanent changes that are implemented on a blockchain network. The process makes all previous blocks and transactions invalid or all previous invalid blocks and transactions valid. 

The new upgrades require people to migrate to the new network or remain in the old network, but either way, it creates a permanent divergence that results in two sets of networks.

Bitcoin’s Network Needed Scalability, Affordability, and Transaction Speed

Bitcoin is the first decentralized, open-source, secure digital currency and payment system with limited supply and low transaction fees. According to its whitepaper, Bitcoin was a necessary and revolutionary technology that would solve the many existing liabilities of traditional fiat currencies and transaction methods:

“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”

Its popularity grew very fast into a worldwide wonder. As more people got on board to mine and transacted with it, developers started to look for new ways to enhance its scalability problem.

Many hard forks have led to significant alterations, and BCH and BSV are not even among the first ten hard forks but are nonetheless among the best-performing ones.

Is Bitcoin Cash the Future of Crypto Cash?

Bitcoin network has undergone multiple hard forks over the years, with developers trying to modify features that would increase transaction speeds and support various expansions on blockchain ecosystems.

Bitcoin Cash is a peer-to-peer Bitcoin hard fork designed to increase the number of transactions per second (TPS) to be processed on its network and become a global decentralized payment system.

On August 1st, 2017, the hard fork took place and features some minor modifications of Bitcoin’s source code. Bitcoin Developers wanted to add some features they were not getting with Bitcoin: a high-volume payment system and lower or affordable transaction fees.

They both have the same hashing rate of SHA256, Proof-of-Work consensus protocol, a maximum supply of 21 million coins, and P2PKH and P2SH addresses.

Bitcoin Cash Rejected Segregated Witness Implements

One of the most significant hard forks was carried out to separate the network from Segregated Witness (SegWit), a soft fork proposed in 2015. SegWit was an implementation on the Bitcoin network aimed at increasing scalability.

The two key features that differentiate Bitcoin Cash from Bitcoin are block size and SegWit. Bitcoin Cash started with a block size of 8mb (which has since been increased to 32MB) while Bitcoin’s block size is 2mb SegWit blocks or 1 Mb legacy blocks.

The increased block size enables miners on their network to process transactions faster and cheaper than they would on Bitcoin. It is alleged that nChain’s CEO Craig Wright, Bitcoin investor Roger Ver, and Bitman’s co-founder Jihan Wu were among the lead developers to push for the Bitcoin Cash hard fork. Moreover, Roger Ver and other BCH supporters are also claiming that Bitcoin Cash is “the real Bitcoin.” 

BCH currently has a market cap of $4.1 billion, a maximum supply of 21 million just like bitcoin, selling at $270.01, and a total circulating supply of 18.3 million BCH.

Minor Upgrades on Bitcoin Cash Fueled the Hardfork That Created Bitcoin SV

Since its launch, a yearlong debate ensued as Bitcoin Cash stakeholders wanted to improve block size parameters. The network implemented a few upgrades, including smart contracts for atomic swaps and interoperable coins. 

The Bitcoin Cash community seemed to resist the changes, and this led to the split, led by nChain’s CEO Craig wright, as a hard fork from BCH on November 15th, 2018. Bitcoin SV pushed its block size to 128MB while bringing back features more similar to Bitcoin, which BCH modified too much with their software upgrade.

Shortly after the split, the hash wars began, with BSV claiming they would sabotage BCH by taking all its hash power since all three versions can use the same mining hardware. The hash wars stopped when BSV split completely, allowing BCH to implement protection on the chain. Today, Bitcoin SV has nearly five times the hash power on BCH.

Bitcoin SV Has More Centralized Features and Corporate Control

The lead developer of BSV, who was also involved with BCH until its split, is self-proclaimed Satoshi Nakamoto, Craig Wright, an Australian computer scientist and entrepreneur. He has proclaimed to be Bitcoin’s sole creator, saying that he owns full rights to its registry.

He added that as much as developers could fork his software and make alternative versions, they still have no right to change the original database’s protocol.

Bitcoin SV (Satoshi Vision) charges 2-3 percent per transaction. This was among the reasons for the hard fork as the developers wanted to minimize transaction costs and provide fast and affordable large scale transactions.

Additionally, BSV’s Paymail protocol enables users to send an email address instead of a BTC wallet address, which is long and cumbersome to write every time.

BSV is #6 on CoinMarketCap market rank, at the price of $197.69, a 24-hour volume of $1.9 billion, a total supply of 21 Million BSV, and a current circulating supply of 18 million BSV. The coin started the year on a high note after achieving its all-time high of $441.20 in January 2020.

Bottomline

Conclusively, both BCH and BSV have, in the past, been in controversial positions with their developers being accused of pump and dump schemes to influence market prices. Most of what goes on cryptocurrency exchanges are outright illegal on the traditional stock market.

Since the crypto space is highly unregulated, and most transactions are anonymous, it gets hard to prove and prosecute criminal and market manipulation activities.

Despite their success, both versions are still far away from gaining massive support as the original Bitcoin. However, since they can be mined using the same gear, miners on the network participate interchangeably depending on which coin is having a good day, for better rewards.

Read also our guide to understanding The Real Bitcoin – BTC.

avatar
Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.