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Jul 7, 2020

First Mover: BSV Doubles in 2020 as Bitcoin Offshoot Wins Devotees

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Bitcoin Satoshi’s Vision, the controversial blockchain promoted by Craig Wright, is winning in digital-asset markets this year, with a token that has brought investors triple the returns of its better-known ancestor, bitcoin.

Bitcoin SV, or BSV as the token is known, has risen 96% so far in 2020, versus a 36% gain for bitcoin (as of Monday). It’s also beating the 18% year-to-date return for bitcoin cash (BCH), another offshoot from bitcoin.

The project, which split off from bitcoin following a series of disputes in 2017 and 2018, has faced accusations in the past that its token’s price is prone to manipulation. And Wright, who leads the BSV community through his software company nChain and claims to be bitcoin founder Satoshi Nakamoto, is embroiled in a lawsuit with his late business partner’s estate. He was recently described as a “fraud” in a public message signed with bitcoin addresses he claims to own.

But some investors and developers say Bitcoin SV has technical advantages over bitcoin and other cryptocurrencies that make it a worthy blockchain to build applications on. Those include Twitch, a social media platform based on Bitcoin SV that grabbed headlines last week when its Twitter account was briefly suspended; just hours before, the company had sent a tweet trolling Twitter CEO Jack Dorsey for fact-checking a post by President Donald Trump.

“We think this represents an incredible opportunity for anyone looking to buy in more cheaply to make a long-term investment on the only blockchain trying to scale and have mass adoption as a database,” Zack Resnick, managing partner of the money manager Unbounded Capital, wrote in an email. The firm invests in BSV tokens as well as projects focused on the blockchain.

It’s been just over a year since the giant cryptocurrency exchange Binance delisted BSV, with CEO Changpeng “CZ” Zhao tweeting at the time that Wright was a “fraud” and that “the real Satoshi can digitally sign any message to prove it.” In an interview in October with the publication Coin Rivet, Wright called CZ a “lowlife. Not exactly taking the high road.

The driving force behind BSV’s split from bitcoin during the late 2010s was the idea that a blockchain should be “scalable” – that is, able to smoothly handle a sudden surge in usage, similar to the way the virtual-meeting platform Zoom suddenly on-boarded millions of new customers during the first few weeks of coronavirus-related lockdowns.

Bitcoin SV’s backers say large data-block sizes, compared with those on the Bitcoin blockchain, could improve the network’s scalability. Bitcoin SV pushed to increase block sizes to 132 megabytes, compared with 32 megabytes for BCH and one megabyte for Bitcoin. And in February, BSV implemented a system upgrade that removed the size limits and enabled scaling up to 2 gigabytes per block.

According to the data aggregator Coin. Dance, the Bitcoin SV blockchain’s daily average transaction throughput exceeds levels for both Bitcoin and Bitcoin Cash.

Some Bitcoin SV critics say the data isn’t what it seems.

Moe Adham, CEO of crypto ATM operator Bitaccess, told First Mover in a direct message that he suspects much of the network’s transaction volume is “spam.”

“No exchanges support it, no services support it,” Adham said. “The only activity I know of is people dumping BSV to get out.”

Trading the token carries risks, such as thin liquidity on exchanges. Despite the ejection from Binance, BSV does retain listings on the cryptocurrency exchanges Huobi, OKEx, and Bitfinex. But daily trading volume on legitimate exchanges averages about $30 million, compared with close to $2 billion for bitcoin, according to Messari data.

Such risks don’t seem to deter developers from choosing the platform. Calvin Ayre, an online casino billionaire who has brushed with U.S. law enforcement and whose business interests include BSV mining, says on his holding company’s website that the token is the “only bitcoin.”

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