1/ Bitcoin BSV solves a really interesting problem: ‘how do you pay for, and get paid for computation?’ By putting digital money inside distributed computing instructions and creating an open market where miners could compete for the fees inside the instructions,
2/ Satoshi created an incentive driven system to create an entirely new form of distributed computing. Bitcoin is a super computer, where miners are incentivised to build stronger, faster cheaper computers to process instructions, not merel pass money between Alice and Bob.
3/ 2014 saw the emergence of ‘smart contracts’ which allow for conditional payments to be made on receipt of confirmation that other work has been done, but smart contracting must operate in a massively parallel environment where competing nodes can race to do the computations.
4/ When constructed properly the kind of computational work that can be done by miners in this manner is virtually unlimited. A paid-for instruction could for example be fetching a piece of data for a user when executing a google search, or even rendering some graphics.
5/ So this leads us into an entirely new economy, an economy that is ‘data-driven’ because it is a truly competitive global financial system which can represent any kind of financial instrument and calculate that instruments’ relationship to the world in close to real time.
6/ It’s competitive because it makes microtransactions possible and affordable, and because the quantity and speed of possible contracts that can be executed is dictated by how much profit miners can make. So the better they are, the faster the ‘bitcoin computer’ is.
7/ The more successful the bitcoin BSV system is, the more it will tend to account for other less secure and less able systems in the fractured and often unaccountable global economy.
8/ This is because at a fundamental level any fiat currency is a contract, a ‘promise to pay’, an IOU, which can be written as a contract in Bitcoin (SV), and it’s profitable to write fiat amounts into smart contracts on chain, which inevitably leads to the bitcoinization of fiat
9/ It doesn’t, however, destroy fiat. Governments can still control their own monetary policy by issuing their own currencies and control their fiscal policy, and banks will be able to make loans to customers in fiat on the blockchain.
10 / What governments gain from issuing fiat on the chain is security, auditability and cost savings. It’s cheaper for them to issue fiat on a distributed network that is secured by the free market and the savings can be passed onto the tax payer.
11/ And the benefits that accrue to mutually cooperating businesses in different countries that have all issued their fiat on-chain would multiply very fast because they would be conducting trade inside a common, fast, cheap, secure network environment.
12 / It does, however, destroy BTC and other networks using SHA256 as it approaches scale. This is because miners well switch back to the network as it grows in value and returns more to hardware investors than BTC can. BSV is therefore an existential threat to BTC.
13/ However BTC is not ‘Bit’ ‘Coin’ because it cannot store data on chain, or do computations on chain, or facilitate a free market for calculations in the block, or create a global microtransaction economy with a 100% legal immutable ledger on chain.
14/ Bitcoin SV also destroys the viability of Ethereum since it’s massively parallel by design so computations do not need to run on every node sequentially, and because it incentivises faster and faster computations it will outrun Ethereum and make it obsolete.
@EatSleepCrypto
@EatSleepCrypto
15/ At scale, there’s no use for more than one secure blockchain network protocol because an ‘internet of money’ is a giant piece of global security infrastructure. It only works properly when there’s one architecture securing everyone’s businesses together in the same framework.
16/ And ironically, since we can now do op_bignum cryptographic calculations inside transactions in script in BSV, we can make Ethereum a side-chain by paying for their Etherhash PoW to be performed and the results of the work submitted for audit on the SV chain. (Patented)
17/ The aim of BSV’s openBSV licence and of nChain’s patent portfolio generally is to incentivise developers to develop applications on BitcoinSV freely but penalise then if they want to develop on other chains. This is an deliberate strategy to create a single global protocol.
18/ People may complain about ‘miner centralisation’ in BSV but if 50,000 banks globally each ran mining nodes in competition with one another the Bitcoin BSV network would be thousands of times more decentralised than any competing system is today, most notably BTC.
