The following is a written transcript of our five part video series “Short BTC, Long Bitcoin (BSV)”. The video version can be found on our YouTube channel.
Why we are Bullish on BSV
Now that we’ve examined this more expansive view of Bitcoin by taking a look at some of the applications building on BSV, we can explore the primary technical distinction between BSV and BTC which makes these applications possible on BSV and not on BTC.
Block Size
It has to do with a metric called block size. Block size measures the maximum amount of data that miners can include in a new block of transactions to be added to the blockchain. The BSV vision of bitcoin is referred to as “big block” bitcoin because BSV believes that the amount of data should be as large as is necessary. BSV argues that the block size should be an economic decision, a decision made by individual miners making cost/benefit analyses, not a technical decision hard coded by developers. The BTC camp disagrees and thus advocates for “small block” bitcoin. They argue that the amount of data needs to be restricted to about 1 megabyte per block. Accordingly, BTC blockspace is reserved for financial transactions and can’t be used for other data storage. The main reason to have such small blocks is to have a network that can be run by small miners operating outside of the influence of governments. Big blockers embrace the professionalization of mining and subjugation to law in order to achieve all of the additional benefits of Bitcoin beyond the digital gold use case.
The BSV vision of bitcoin is one that enables all types and quantities of data to be stored on the bitcoin database. Because of the uniqueness of this database, the Bitcoin blockchain, Unbounded Capital sees Bitcoin enabling innovation like we saw after the invention of the internet. As investors, we see the market’s preference for the added utility of BSV catalyzing a rapid and powerful shift in price for both BSV and BTC. Currently valued at 50:1 (BTC:BSV) with respective market capitalizations of $150 billion and $3 billion, we anticipate a seismic rebalancing of the cryptocurrency market presenting an attractive opportunity to investors.
Bitcoin’s Original and Stable Design Fosters Entrepreneurship
Unbounded Capital believes BSV is positioned to be one of the most consequential technologies and lucrative investments of the next decade. We believe this because BSV embraces the original design of Bitcoin as a groundbreaking innovation in databases that allows for a much broader scope of applications than digital gold. An explosion of development leveraging BSV’s database has begun. The entrepreneurial community in BSV is growing rapidly along with the number of businesses utilizing the network in creative ways. These businesses are creating new applications and improved user experiences that we believe will prove much more appealing to the typical end user. Ultimately, we think these BSV start-ups will either outcompete legacy businesses or force them to switch to BSV infrastructure. The transparency, efficiency, and network effects enabled by a single public and immutable database create advantages that likely won’t be possible to replicate in other ways.
BSV Has an Intellectual Property Advantage
As of today, the BSV blockchain is unique in a TECHNICAL sense in facilitating this broad vision for Bitcoin. Only BSV can support micropayments and data ownership at scale. But what if another blockchain like BTC tried to pivot and create a similar network, leveraging it’s greater visibility to gain an advantage? To protect the network in a LEGAL sense, BSV has the support of the largest blockchain patent portfolio in the world. Craig Wright, the man Unbounded Capital believes invented Bitcoin, and his company nChain have patented hundreds of the specific elements fundamental to the bitcoin database’s functionality with thousands more patents awaiting review and in the pipeline. From our understanding, all other blockchains, BTC included, are currently in violation of these active patents and will be unable to freely operate once enforced. Not wanting to stifle innovation on BSV, nChain has made it publicly known that they will be licensing the free use of this intellectual property to entrepreneurs leveraging BSV, while those that wish to use other blockchains will have to pay a fee. When faced with the opportunity to use the most legally compliant and scalable blockchain for free as opposed to paying license fees to use a stagnant network, the choice is clear. As investors, we think investing in the protocol with a moat of intellectual property is the only real choice we can make as fiduciaries.