We are “pound-the-table” Bitcoin bulls for all the reasons stated in this ebook. We are extremely optimistic about BSV because we think it is the version of Bitcoin that is by far the most likely to capture the full potential of Bitcoin. Currently, it is the only blockchain trying. In contrast, the crypto consensus widely views BSV as a scam, or at least sees it as something highly unlikely to succeed. In our view, there are two main reasons for this. First, BSV has a very different type of goal than the rest of crypto, massive scale without concern for trustlessness or censorship resistance. This goal is very hard to understand for a mainstream which believes that Bitcoin is only valuable because of these qualities. Chris Burniske of Placeholder Capital puts the consensus view of BSV well as he was quoted in a recent Coinslate piece noting, “we’ve never seen a compelling reason for it.” The second reason BSV is dismissed is its heavy association with Dr. Craig Wright. Dr. Wright claims to be Satoshi Nakamoto, the creator of Bitcoin. The firm nChain, where Dr. Wright is Chief Science Officer, is playing a major role in the development of BSV. The crypto consensus almost universally thinks that Dr. Wright is lying and is not Satoshi Nakamoto. This makes the likelihood that BSV will have value extremely low in their minds.
Our belief is that regardless of whether Dr. Wright created Bitcoin, he is absolutely correct in his convictions around Bitcoin. We strongly agree with his view that Bitcoin is capable of massive scale and that it was not created to operate outside of the law. nChain has poured massive resources into this vision to great success. We think that pursuing this vision through the restoration and professionalization of the original Bitcoin protocol is the most valuable direction for Bitcoin and all blockchains. We have such conviction in this vision that we have made BSV the exclusive focus of our fund. Many others share our convictions. Hundreds of entrepreneurs have flocked to BSV to build on the original Bitcoin, in many cases abandoning other protocols. What is happening in BSV is truly exciting, and in our view it won’t be long before the consensus view in crypto is that Bitcoin is the future and BSV is the version worth building on and investing in.
DEVELOPMENT OF BSV
BSV became independent in November 2O18 when it split from Bitcoin Cash (BCH[. In spite of being the black sheep of the crypto world, BSV has seen tremendous progress since that time. The primary goal in BSV’s development was two-fold; return to the original Bitcoin rules while professionalizing the code. Since Bitcoin’s launch in 2OO9, the code for the mining software has been maintained by passionate volunteers. This has resulted in an extremely messy codebase that has proven time-consuming to restore without breaking. Fortunately, nChain employs dozens of developers who have been diligently working towards restoring Bitcoin’s functionality. This restoration made a huge leap with the recent Genesis upgrade. In February 2O2O, the Genesis upgrade made two major restorations to Bitcoin - the removal of any block size limits and the restoration of the original scripting language. Miners are now free to scale to meet demand on BSV, something not possible on any other PoW chain.
WHY WE BELIEVE IN BSV
Our conviction that BSV will be a transformational network and that the native currency on BSV will have immense value is rooted in our belief in Bitcoin’s potential. We think the efficiencies Bitcoin offers via the centralization of information will transform the internet into something better. BSV is the only network pursuing that goal. We think that the network being formed by the individuals and businesses working towards that goal on BSV will be difficult to overcome for potential competitors. A tremendous amount of infrastructure has already been built on BSV. The incentive for other developers is to shift to building on Bitcoin. Why reinvent the wheel when you can use the wheel? The incentive for investors is to shift their investment in chains like BTC and Ethereum to BSV. Why own something relatively expensive which does not work and is pursuing a less valuable vision when you can own something relatively cheap that works and is pursuing a more valuable vision?
Further, BSV has a distinct advantage in IP via nChain and other businesses building on BSV. nChain has a patent portfolio approaching 1OOO unique patents related to Bitcoin. Because their understanding of Bitcoin is superior to their competitors, this patent portfolio has outsized value due to both its size and relevancy. It is unclear to what degree they will be able to enforce these patents, but it is known that use of these patents will either be open or far more favorable to applications being built on BSV. This is a powerful incentive for start-ups and medium-sized businesses to build on BSV rather than risk legal action or pay increased licensing fees, particularly since BSV is the most functional blockchain anyways.
WHAT IS BEING DONE ON BSV TODAY
BSV has already achieved scale and efficiency not thought possible for a PoW blockchain, and this is only after a year of independent operation with limited adoption. To date, the largest blocks on any blockchain have been mined on BSV. The largest block on the BTC network to date is 2.26MB. This is about 1OOx smaller than the record on BSV, 21OMB. BSV fees today (5/2/2O2O[ are over 16,OOO times less than on BTC. BSV has significantly higher daily transaction volume than BTC. This is all with a price that is over 4O times lower.
This increased scale from BTC is just the beginning. Much larger scale is required, and this will not come until the blockchain is in greater demand from either increased enterprise adoption or BSV start-ups gaining more traction. What excites us is the development in the surrounding infrastructure that makes real businesses use cases possible. Since Bitcoin has been limited for so long, the types of supplemental infrastructure needed to use Bitcoin as a database had not been developed. That infrastructure has developed rapidly on BSV.
Some of the more noteworthy BSV infrastructure advances have come on the wallet level. Handcash, Money Button, and RelayX have made sending and receiving Bitcoin far easier. Paymail, a technology built on BSV, allows these wallets to use handles formatted as an email address to send and receive payments. This is much more usable than the hexadecimal characters strings which have become standard in the industry. These wallets have also built single-sign-on technology which has allowed for a proliferation of BSV apps. One can sign into an app through their wallet and make BSV payments within the app and have a profile tied to their on-chain identity. This is all done in non-custodial fashion. Money Button also offers an integratable button that can be used to make peer-to-peer payments including micropayments. This has facilitated the creation of applications which can charge amounts as little as a few hundredths of a cent for things like uploading data to Bitcoin.
Unbounded Capital portfolio companies like Planaria, Run, and Xoken Labs are creating technologies which make it possible to build apps with Bitcoin as a backend. Planaria in particular has led a revolution in using the blockchain as a data layer. These tools make it possible to store application data and logic on the Bitcoin blockchain. This is an essential step to allowing users to own their data in a modern context.
Taking advantage of Bitcoin’s utility as a database are companies like WeatherSV, Preev, and Air Quality Index. These companies are using the unique trustworthiness of data stored on Bitcoin to create databases for future research. Projects like A.N.N.E. are building entirely new database formats to take advantage of the unique qualities of Bitcoin.
New media and social media companies have launched which take advantage of cheap payments on Bitcoin. Twetch is a standout in adoption, both in BSV and in the wider crypto sphere. Twetch takes on frustrations with traditional social media by offering a Twitter alternative where all actions have a financial component. Writing a twetch, liking a twetch, following another twetcher all cost somewhere between 2 and 1O cents. Most of those payments go to other users who are responsible for the content being liked or followed. This gives users an opportunity to earn money from the platform and keeps the quality of content high. It’s an experiment in a new kind of online community, and it is also a platform that lets users retain control of their own data. All twetches live in Bitcoin’s database. If Twetch dies, the twetches survive, and if a competitor emerges, users can take their twetches with them to a different platform. Ultimately, we believe that this type of model will become ubiquitous. The specifics of Twetch may not work, but we think applications providing different views and methods of engaging with the same set of content, the Bitcoin database, will proliferate. User lock-in will no longer be a competitive option.
Some of the larger businesses building on BSV include UNISOT, a supply-chain management solution. Their recently launched Seafood Chain is being used to track the shipment of Norwegian salmon across the world. EHR Data is an enterprise in the electronic health- care space partnering with nChain to build a tool which helps doctors, patients, and pharmacies coordinate on the proper prescription of opioids. These sorts of enterprise initiatives are what we believe will create the necessary incentive for Bitcoin to continue scaling to its potential. Bitcoin miners like Coingeek, TAAL, Mempool, and Matterpool are preparing for this future already, expanding their operations through new features like the Miner API and Miner ID and making investments to facilitate real scale.
The pace of BSV’s development is extremely exciting, and we expect it will only increase. Since it became independent, BSV has seen an astonishing number of new and exist- ing businesses begin utilizing Bitcoin’s database. The Genesis upgrade was only about three months ago. Having a functional Bitcoin is an extremely new phenomenon. Many of these projects and companies won’t amount to anything, but we believe that some have the potential to develop into billion dollar companies. Further, we have strong conviction that this space will generate many new billion dollar companies and that Bitcoin will accelerate the growth of existing companies who can adopt it successfully.
In our view, the flawed assumptions of the crypto consensus and the confusion they have generated have likely resulted in the waste of millions of man-hours and hundreds of billions of dollars. Because of the cryptocurrency consensus’ misunderstanding of the value of decentralization, the role of law, and the technical capabilities of Bitcoin, they have routinely made decisions that accept enormously high costs for no apparent benefit. At Unbounded Capital, we are investing in a future of Bitcoin at scale, a better internet, a more efficient and accessible financial system, an internet where users maintain greater privacy and control, a better future. We hope that other investors in the crypto community can get behind this vision and start working towards Bitcoin at scale, not just digital gold and trustless, censorship resistant platforms. We look forward to building a future on Bitcoin, and we hope that some of you will join us in helping to achieve that goal.