BSV’s low transaction fees make it the company’s only blockchain option

A proven commitment to ultra-low transaction fees, even when transaction volume increases massively, makes Bitcoin SV (BSV) the only option for businesses looking for affordable payment channels and governments looking to launch central bank digital currencies (CBDCs). As demand increases and the network scales, transaction fees on the BSV Blockchain actually go down while all other blockchains react the opposite way, their fees increase dramatically if they get any increased transaction volume.

Transaction costs on the BTC blockchain were recently reported to be over 118,000 times more expensive in US dollars than doing the same transaction on the BSV blockchain. In terms of satoshis per byte – a satoshi is the smallest value of a Bitcoin, representing 1/100 millionth of a single token – and a median transaction size of around 190 bytes, it costs around 20.4 satoshis per byte to trade BTC versus just 0.1 satoshis on BSV.

Just a reminder pic.twitter.com/260EIDQXYJ

— Dr Craig S Wright (@Dr_CSWright) 15 February 2023

While the BTC transaction cost in fiat currency was only around 88¢, doing the same transaction on BSV cost only 0.0007¢. Both numbers may seem relatively paltry, and if you multiply that BSV number by 1,000, you get just 70¢. But multiply that BTC number by 1000 and you get $880.

Let’s say you’re a business that performs tens of thousands of transactions per day, most of them on a small scale. Transactions in BTC do not seem to provide much incentive to switch from using Visa (NASDAQ: V ) or Mastercard (NASDAQ: MA ) payments, especially given customers’ established familiarity with these credit cards and their possible lack of faith in this newfangled. blockchain technology.

It’s even worse if you’re a startup with a great idea for a business based on extremely small transactions because the BTC fee schedule effectively torpedoes your project before it leaves drydock. How many great ideas have been left on their boards when their creators crunched the BTC numbers and realized this just wasn’t going to work?

Simply put, BSV is the only blockchain that businesses can realistically rely on for a cost-effective data storage solution and payment rail that will grow with them as their needs expand. This is even more true for Web3 companies, whose entire business model requires transaction fees measured in fractions of a cent (nanopayment), a feature unattainable outside BSV.

Eyes off the prize

It seems utterly hypocritical that BTC maximalists continue to revere Bitcoin creator Satoshi Nakamoto, given that those same maximalists have drifted so far from Satoshi’s original vision. It’s right there in the title of the 2008 white paper: a peer-to-peer electronic cash system and the paper’s introduction bemoans the fiat system’s requirement to “limit the minimum practical transaction size and cut off the possibility of small random transactions.”

And yet the Bitcoin Core group of developers who usurped control of the original Bitcoin’s source code saw more value in imposing artificial limitations on the technology. By ignoring Satoshi’s plan, they limited the number of transactions that could fit into an individual block, resulting in a bidding war model that forces users to constantly increase their fee offers to ensure their transaction enters the next block.

Since the BTC Core camp lacked the capacity to realize Satoshi’s vision of a cost-effective payment system, the BTC Core camp began marketing its token as a ‘store of value’. That slogan was soon replaced by the more enticing ‘digital gold’, along with whispers of untold riches for those willing to speculate how far ‘the number (could) go up’.

But the majority of BTC transactions happen on exchanges, not on the blockchain. This periodically causes consternation in the BTC camp, usually around the “halving” of block rewards paid out to BTC miners. Every four years or so, these rewards are cut in half, and without an ever-increasing fiat value of BTC tokens, the incentives for miners to keep verifying transactions becomes less enticing as Satoshi’s subsidy is reduced.

Satoshi himself said that incentives for miners should ultimately just transition to transaction fees. However, with BTC’s cap on the number of transactions, fees must remain sky high to compensate for the periodic reduction in miners’ block rewards. That model would preclude any possibility of BTC functioning as an actual digital cash system, leaving this “digital gold” forever stuck in its speculative boom-and-bust cycles.

Meanwhile, assuming Moore’s Law holds true for microprocessor growth and hardware storage capacity, BSV envisions no upper limit on block size. BSV already puts more low-cost transactions into a single block than many other chains – including BTC – handle in an entire day. This is a foundation on which companies can reliably build their future.

CBDC what did we do there?

BSV’s limitless capacity will also be of interest to governments looking to launch their own regulatory CBDCs. Contrary to the BTC maximalists’ embrace of stealth and secrecy, BSV has always sought to work within the law, recognizing this path as the only long-term prospect for success.

BSV allows the embedding of additional data into transactions, which CBDC issuers can use to gain greater insight into market activity. More data will also offer more tools to implement precisely targeted fiscal policies that limit the potential for wild price swings that can arise from less focused policy initiatives.

BSV is also unique among blockchains in its eagerness to work within the legal system to ensure that customers who are victims of fraud or theft can retrieve their stolen assets. BSV also offers hope for technical novices who may accidentally wind up in the poorhouse.

BSV’s embrace of simplified payment verification (SPV) means that merchants and individuals can accept payments even in the absence of an internet connection. A lower barrier to entry means greater payment diversity, including the ability for individuals who lack regular financial accounts to transact with ease and confidence.

From all the publicly verifiable evidence, it is clear that BSV respects the vision of a P2P electronic cash system described in Satoshi’s white paper. It is equally clear that BTC is a featureless speculative commodity and appears to be content. The BSV is a freeway with unlimited on-ramps, while the BTC is a dusty path that supposedly leads to an undiscovered gold mine. If you were a business or nation-state considering integrating blockchain technology, which of these paths would you take?

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC Handbook.

See: CBDCs and BSV

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