ideas:// bitcoin cash and bitcoin sv
If you're in the crypto world and looked into bitcoin you've probably heard of these weird copies like BCH, BSV, and many others.
It's essential to know a little about bitcoin works to understand these other forks out there (and why they're worth anything at all).
When I pay you, I add an entry into the blockchain that says "David pays Alice 2 bitcoin," and I sign it. That transaction must be added to a block that the miners validated before it's finally valid to the world. My transaction isn't the only one that's getting mined, though. There's also John paying Mike, Gabriel paying Bob, etc. These transactions get collected into a block, and the block is mined.
These blocks can take a long time to validate as more people start using the system. As more people start using it, you have to derive ideas to enable the system to scale. This issue is the root of the bitcoin forks we've seen over the past couple of years.
Note: OG bitcoin limits blocks to 1MB
My goals are to keep this email short, and unfortunately, there's a lot of different people with A LOT to say on this subject. So I'll mention two high-level ideas that are worth being aware of.
SegWit
"Segregated witness" is a suggested improvement to the protocol that makes the blocks smaller by removing signatures and other data from the blocks. This signature data represents around 50% of the block size.
There is a lot of arguments around whether this is actually a good idea.
block size
This one really is as simple as the literal size of the blocks, the groups of transactions.
It's worth mentioning that the average block size has stayed around MB anyway.
Even though bitcoin cash has increased it's block size to 32 MB, it hasn't actually helped that much as block sizes have stayed far under that.
adoption
It's worth noting that there actually is some serious adoption of some of these coins and not others. Bitcoin cash is around $500 / coin right now, but I think that there is a shortage of liquidity that's worth being aware of if you're thinking about investing in (relatively) small market cap coins like BCH.
TL;DR :
- Bitcoin Cash has higher block size, is faster, but less widely used and potentially less secure.
- Bitcoin SV is a fork of bitcoin cash that keeps the original vision of satoshi nakamoto by not changing aspects of the protocol like segwit and blocksize. (hence, "Bitcoin Satoshi's Vision")
You may enjoy taking a look at this map of the bitcoin forks that are out there as unfortunately it gets complicated fast.
Some important links that you should check out to go a little further :
- _unwriter's post on the bitcoin cash experiment
- bitcoin whitepaper
- a good post from bitcoin core explaining segwit
- Bitcoin SV's page on satoshi's vision
P.S. Sushiswap has become available on coinbase and this may be an event worth investing in. (Sushiswap is similar to Uniswap which I wrote about last week)