Bitcoin SV Hard Fork

Anisa Batabyal
| 30 April, 2020 | 2 min

Bitcoin SV (Satoshi Vision) was created out of a hash war between Craig Wright and Roger Ver on November 18, 2018. The New year seems to be working like a miracle for the Satoshi Vision hard fork, as over the last 30 days, it surged by over 212%, which is a commendable performance. Not only that, a few weeks back, it went up the ranking ladder to grab the third spot as per market capitalization, before it again fell to number 5. BSV is one of the fastest-growing blockchains to have seen the explosion of application development globally, utilizing its data, scalability, and micropayment capacity. Bitcoin SV (BSV) is the only project that adheres to Satoshi Nakamoto’s original vision and protocol.

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What is Bitcoin SV Genesis Hard Fork?

The BSV node team had already released the 1.0.0 version of the BSV node implementation on January 15, 2020, when the BSV value surged to over 75%. This version states the necessary updates that is going to take place on February 4th, 2020- the day of Bitcoin SV’s hard fork known as Genesis. (Bitcoin SV Hard fork date) Genesis was even the name of the first block mined 11 years before on January 3, 2009.

The main vision of BSV’s Genesis hard fork is to restore the actual Satoshi protocol, other technical upgrades, and unlock the massive on-chain scalability. This on-chain scalability might introduce a uniform, public blockchain like the world operates on a single internet. There won't be a creation of new coins but only technical upgrades like BSV node software.

Jimmy Nguyen, the founding President of the Bitcoin Association, has been vocal about the upcoming Bitcoin SV hard fork, as he believes this is a historic moment for BSV to become the world’s largest peer-to-peer electronic cash system.

Jimmy Nguyen even shared the BSV Genesis hard fork roadmap back in December 2019:

Main Goals of Genesis Hard Fork

As per the Bitcoin SV Node Project developers- Daniel Connolly (Lead Developer) and Steve Shadders (Technical Director)- the Genesis hard fork is coming up with these major changes:

#1 Solution to Bitcoin’s Scalability Problem

The ever-nagging problem for Bitcoin’s hard limit on the block would be solved by optimizing Bitcoin’s inherent capacity for scalability. Over the years, Bitcoin has been dismayed by the disputes with the larger block size for higher transaction volumes. The BTC network kept its block cap ceiling at 1 MB, enabling only 4-7 transactions per second. BCH has a ceiling of 32 MB, which is not great to support enterprise use.

After the implementation of Genesis hard fork, Bitcoin wouldn’t have to deal with default hard cap anymore, after which there is no limit and the transaction capacity would be infinite. Hence, the miners can manage the consensus of the transaction capacity and block size on the BSV network, depending on the market forces, like Satoshi’s vision was stated in the original Whitepaper.

Before the onset of the Genesis block, BSV can process 1000 transactions per second, but if its 2 GB Block size hard cap is completely utilized, it can process up to 9000 transactions per second. Once the block cap is removed with scalability taking a higher edge, BSV’s transaction processing capacity would have infinite potential to grow. This would help the enterprise-level large scale applications to build on the blockchain.

The miners would definitely be at an advantage, as they can earn more transaction fees to compensate for the revenue they lose from the Bitcoin halving process every four years, where the block reward gets halved. ( The upcoming Bitcoin Halving is scheduled to take place in May 2020, where the BTC reward decreases from 12.5 BTC to 6.25 BTC).

#2 Restoring the Originality of Bitcoin Protocol

Bitcoin has been hanging around since 2009, and the developers have made many technical changes over this long time period. So this Genesis hard fork’s main aim is to restore the original version of the Bitcoin protocol. The technical changes can be sub-categorized into three groups, which are as under:

  • Restoring the OP_RETURN Functionality

This enables the Script developers to terminate the script easily and early with the possibility of executing the valid script.

  • Increasing The Script Numeric Type To Big Numbers

This change will increase the Bitcoin script language mathematically. As 32- bit numbers are limited in size, which makes it inefficient and complicated to perform complex mathematical calculations like signature verification. This change will get back its original design and enable it to perform complex calculations and scripts with all minds of advanced functionality.

  • Rescind P2HS For New Transactions

Pay to Hash Script (P2HS) is a mechanism introduced for enabling hiding output scripts at the time of creation. This is against the original Bitcoin protocol, which supports an honest record of events. P2HS has encouraged wide usage of poor privacy practices, and divergence from such practices is best for Bitcoin to get back to its original protocol. The existing P2HS wallets will remain unaffected, and this change will prevail for any new outputs being made. 

  • Restoring nLockTime and nSequence

These data fields are integral to the mechanism of payment channels that have been described by Satoshi as a fundamental mechanism for allowing high-speed micropayments. The old opcodes shall be removed, and the original usage of nLockTime and nSequence would be restored.

#3 P2P Relay of Transactions with Complex Scripts

This change will stabilize the protocol and enable the use of complex transactions by the participants in the network. Before Genesis hard fork, if a participant wanted to use complex transactions, they would have had to find a miner, who would help in confirming transactions in a block. After Genesis, the transactions, which were of standard type, will be relayed across the peer-to-peer network, enabling all of the participants to use complex transaction types.

As Internet evolution took place over the last 30 years, the public blockchain is also targeting something like that for the future. Even after the Genesis fork, the BSV might go through some technical upgrades later, including BSV Node software. But any software applications wouldn’t materially affect the base protocol rules and shouldn’t affect applications built on top of BSV after this Genesis upgrade.

Impact On Price

This Genesis hard fork upgrade might trigger the value of BSV up, and it can again go up the ranking ladder to become the third popular cryptocurrency in the world. But there are whispers from across the crypto space about the controversy of Craig Wright and Tulip Funds, which might take BSV down along with himself. The court hearing is pending, which might clarify the doubts.

What Users Should Do

The California-based crypto management institution, BitGo has already announced that its BSV users won't be able to receive BSV transactions after the upgrade due to compatibility issues. Any transactions sent to BitGo BSV wallets would be marked invalid. BitGo advises its users to either convert their BSV coins to BTC or transfer their funds to the external wallet before February 4th, 2020. This step is being taken by BitGo because of the sunsetting of the P2HS, as covered in the second point.

Exchanges Supporting

#1 Bitfinex

Bitfinex has announced that it will be supporting the BSV Genesis hard fork, which will take place when the block size reaches 620,538. Bitfinex has asked the users to rest assured as they will take care of the technical formalities. The deposits ad withdrawals would be suspended a day before the hard fork takes place.

#2 Huobi Global

Huobi Global has announced that it will not be supporting the old P2SH addresses after this BSV hard fork, which is taking place on Feb 4, 2020. The trading services or balances on this exchange would remain unaffected, as that will be taken care of by Huobi.

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