MNP, the fifth largest chartered professional accountancy and business consulting firm in Canada, has released a report that investigates the alignment of Bitcoin SV (BSV) and Bitcoin Core (BTC) with the original vision of the Bitcoin protocol described in Satoshi Nakamoto’s 2008 white paper.
The report is titled ‘The Original Bitcoin Protocol: What is it and Why Does it Matter?’ and finds that Bitcoin SV is the blockchain implementation which stays truest to the original vision of Bitcoin.
‘Based on our review Bitcoin was intended to be a transaction network for digital cash to compete as a global payment system,’ the report states.
‘Current implementations (Bitcoin SV and Bitcoin Core) were compared against that original vision. Our findings indicate that Bitcoin SV is most representative of Satoshi Nakamoto’s original intention for Bitcoin.’
The report looks at various aspects of the original Bitcoin protocol based on communications and code written by Satoshi Nakamoto during the time he created and was actively involved in the development of the technology. Creating a framework from this material, it then compares the capabilities, design and performance of Bitcoin SV and Bitcoin Core against it.
The BTC implementation of the Bitcoin protocol has undergone numerous hard forks throughout its tumultuous development, and it has migrated from a system designed to facilitate fast and efficient peer-to-peer transactions with double spend protection to a classification as a ‘store of value’ or ‘digital gold’. Throughout its development, it has disabled several of the original opcode, or scripting, functionalities of the original Bitcoin protocol and has retained an artificial 1MB limit on the size of blocks processed by the network.
Bitcoin SV (Bitcoin Satoshi’s Vision) was created by a community which aims to restore the original functionality of Bitcoin, including its support for smart contracts and fast, cheap, data-heavy transactions. To this end, BSV developers have restored much of the original scripting functionality of the Bitcoin protocol and have removed the artificial limit on block sizes, allowing the network to scale with adoption and gain substantial transaction throughput while keeping transaction fees low.
The MNP report defines several criteria based on the original protocol’s design and examines how both BTC and BSV fulfil these requirements by examining each blockchain’s protocol implementation as of March 31, 2021. The speculative valuation of each blockchain’s token, its reputation and other forks were excluded from the scope of the study due to their irrelevance when considering each protocol’s alignment with the original Bitcoin design.
The key differences
The report’s assessment encompasses a range of categories, ranging from each protocol implementation’s adherence to the security design of the original Bitcoin to their success in meeting the scaling and functional requirements posited by vision behind the original protocol.
Many of the most significant differences between Bitcoin SV and BTC when comparing them against Satoshi’s Vision arise from Bitcoin SV’s theoretically unbounded block size and BTC’s antithetical artificial block size limit – as BTC is limited to a maximum block size of 1MB, this significantly impedes its ability to scale and to offer the high transaction throughput needed to realise many aspects of Satoshi’s vision for the Bitcoin protocol.
A few of the key criteria in the report where differences were found to be most apparent are as follows:
- ‘The network and block size should scale dependent on network utilization’ – BTC’s artificial block size limit of 1MB imposes a maximum number of transactions that can be processed by the network daily – making it impossible to support higher transaction volumes as adoption increases. Conversely, Bitcoin SV has no default block size limit and can easily scale as transaction volume increases by increasing block sizes in relation to network market forces.
- ‘The network should always be available and process all valid transactions including free ones as there is still Bitcoin to be mined’ – On BTC, free transactions can be ignored by miners and may remain starved in the mempool, never being processed. On Bitcoin SV, free transactions can and do occur within blocks due to its superior scalability. There is no downtime recorded for either network.
- ‘The overall energy requirements will vary depending on the scale of the network’ – BTC’s overall energy consumption per transaction will increase with difficulty as the size of blocks is limited to 1MB on the network. On the Bitcoin SV network, the required amount of energy per transaction will decline significantly as block sizes increase and more transactions can be processed per block.
- ‘The scripting language and opcodes allow developers to create contracts’ – BTC has disabled many opcodes throughout its development, which has greatly inhibited or prevented developers from creating detailed and complex smart contracts. Bitcoin SV has re-enabled historic opcodes which enable complex scripting and the creation of stateful smart contracts.
- ‘The network should be able to scale meet any demand in transactions and how users adopt the network’ – BTC is unable to scale with adoption of the network due to its limited block size, which restricts usage of the network – especially as adoption increases. Bitcoin SV offers a theoretical unbounded number of transactions per block, restricted only by hardware and software limitations that are reduced as technology improves. This allows for mass adoption of payment processing and for the facilitation of micropayments on the network.
The points above, which outline Satoshi’s original ideas and the adherence of each protocol to them, are among the most salient differences between the Bitcoin Core and Bitcoin SV protocols, but there are many other areas in which they differ. It is important to note that under all the categories examined in the report, there is never an instance of Bitcoin SV failing to meet a criterion to at least the same extent that BTC does. However, there are many instances where BTC fails to meet an assessment criterion while Bitcoin SV succeeds.
Bitcoin SV best represents the original Bitcoin
The MNP report notes that Bitcoin SV stays far truer to the original design of the Bitcoin protocol than BTC, as shown by its ability to scale and process transactions on the level of modern digital payment networks, as well as its support for complex scripting functionality.
‘After examining Bitcoin Core and Bitcoin Satoshi’s Vision compared to the original vision set forth in the whitepaper, forum posts, emails, and other writings by Satoshi, it is our opinion that Bitcoin Satoshi’s Vision is the implementation that currently best represents what Satoshi originally intended,’ the report states.
‘BSV has a theoretically unbound block size – this allows for payments to scale to the size of a Visa-like network without requiring an increase in fees to meet the economic requirements of the node operators. BSV also provides more functionality in terms of what developers can do to utilize the network for building their own transaction systems on top of the Bitcoin protocol.’
The report goes on to highlight the countless ways in which blockchain technology can have a positive impact on the future, and a blockchain that aligns with Satoshi’s original vision can enable unprecedented new industries and services, from micropayments and autonomous contracting to distributed data storage and identity management.
The infographic below shows how Bitcoin SV and Bitcoin Core each comply with MNP’s criteria based on the original vision of the Bitcoin protocol as described by Satoshi Nakamoto.