BSV Targets Adoption With “Big Block” Strategy, Could be More Profitable to Mine – Fundstrat

Tom Lee’s Fundstrat Global Advisors has released a special report on Bitcoin Satoshi Vision (or BSV) with its close to 60% share of on-chain transactions on the Bitcoin network – and 1.4% hash rate as against Bitcoin’s (BTC) 96% – as at this writing.

The report lays out why the Craig Wright-led network could be considered as a possible winning implementation going by its contribution “to the necessary experimentation to test which protocol design is most likely to achieve broad adoption”. BSV believes its protocol more closely reflects the original Bitcoin design than does BTC or Bitcoin Cash (BCH), the market strategy sector research firm states. It adds:  

“Specifically, BSV believes BCH was wrong to add opcodes and make other changes not in the original protocol, and will soon be removing its block size limit; BTC and BCH limit block sizes to ~2MB and 32MB, respectively (though BTC now technically uses a “block weight” limit). The challenge for BSV will be to prove that its protocol is not only the original Bitcoin design, but the best design for wide consumer and business adoption, it says about the split of Bitcoin Cash (BCH).”

The report, commissioned and paid for by the Bitcoin Association, also notes that BSV is targeting market adoption with its “big block” strategy as it “believes corporates will require network throughput capacity much higher than what is currently needed before they are comfortable using the network. Daily transaction value on the network averages ~$25mm with blocks 0.43% full vs. BTC daily value ~$2.6B and its blocks typically ~50% full.”

This explains why they think BSV could be more profitable to mine due to the higher risk associated with a smaller project as “profitability suggests miners perceive BSV risk as comparable to its larger BCH competitor”. However, mining revenues are currently very small at ~$0.30mm per day compared to BTC $17mm and BCH $0.50mm and BTC is currently more profitable to mine than BSV (1.2x vs. 1.1x price-to-break even). They also doubt that an estimated increased BSV transactions per second (tps) to 1500 could mean larger transaction sizes (ex. document storage) and bandwidth needs but 600 tps more practical.

Coming as BSV Node reportedly won the Blockchain Technology Breakthrough of the Year award at the T-EDGE awards gala in Beijing, China after its conference of global innovators between Dec. 6 and 8, Fundstrat’s assessment comes barely a month after the network marked its first year anniversary in which it cites its protocol’s ability to have more applications built on it than Bitcoin has had in ten years.

On BSV’s future focus, one of its advocates and the president of the Bitcoin Association, Jimmy Nguyen says:

“Scaling is a key advantage for BSV. BSV is already showing consistently bigger blocks and consistently more transactions than the BTC network, and is solving the scaling difficulties that Ethereum is facing.”

He also touched on the return of the ‘set-in-stone protocol’ to the original Bitcoin protocol which is expected to be completed by February 2020. He says:

“Our goal with BSV has always been to restore the original Bitcoin protocol as closely as possible to what was released in the Satoshi client version 0.1. This includes completely removing any default hard cap for block size, and leave it entirely to the miners to determine the network’s block size based upon their consensus and market forces. In addition, numerous other technical features will be restored and other limits lifted.  The BSV Node team has described in more detail what is planned (roadmap).

“Once the Satoshi protocol is restored, we intend to keep the protocol stable, and let developers build on top of the protocol.   As with any software, there may occasionally be software improvements, but the basic protocol will remain the same. A stable foundation is important so enterprises and application developers know they can reliably build upon BSV, just like a stable Internet protocol has enabled a massive Internet business ecosystem to grow.”

It has also been announced that the fifth BSV-friendly CoinGeek conference is headed to London for February 2020.

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