- Bitcoin Core is broken and cannot scale to the masses, this means that in the future mining will be unprofitable due to small block sizes.
- “Currently Bitcoin SV’s default block cap is at 128mb – which is pretty large compared to BTC which is 1mb and BCH which is 32. So, come July Bitcoin SV is going to increase to 2GB which is 2,000mb” said Jimmy Nguyen – nChain Chairman – in an exclusive interview with BitStarz News.
- By scaling up the block size to 2gb, Bitcoin SV is ensuring that miners will always remain profitable and be incentivized to keep the network running smoothly.
Bitcoin is facing an existential crisis, where developer groups are pulling it in every direction, with no clear path for its future. If developer groups continue to manipulate Bitcoin Core and pull it away from the original vision, in a handful of years the network will cease to operate smoothly.
In a bid to revive the Bitcoin legacy, nChain – with the help of Jimmy Nguyen and Craig Wright – are seeking to build the original principles of Bitcoin from the founding white paper into Bitcoin SV.
Alex Meears spoke with Jimmy Nguyen – nChain Chairman – to find out exactly how the nChain team plans to build a truly scalable cryptocurrency with the help of Satoshi Nakamoto.
AM: Would you mind telling our readers a little bit about who you are, as well as why and how you got into crypto?
JN: I am the chairman of nChain’s Strategic Advisory Board. nChain is a research development and advisory firm based out of London that has Craig Wright as the chief scientist – obviously Craig is very well known in the Bitcoin world. We’re working on building a very large IP portfolio, it’s got one of the largest patent and patent application portfolios for blockchain technology in the world.
I used to be CEO of nChain, but now I’ve moved to a board advisory role. I am also the founding president of the Bitcoin Association, which is a global organization we created to help grow the business of the bitcoin industry – particularly focusing on Bitcoin SV which we support as the original bitcoin.
I started my journey into this world as an IP and digital technology lawyer, which I did for about 21 years in the United States. I was a partner at a number of major corporate law firms and I represented everybody from big multinational corporates like Amazon and Microsoft down to smaller tech startups. When you are a tech lawyer you have to be constantly be learning about new technology trends and what the new tech is all about.
I started as a lawyer during the Internet boom in the mid 1990s when the Internet was first happening in the dotcom era and since then I’ve been learning all about new technology. I had clients in the fintech space as well as clients that dealt with online games and online gaming around the world. And so, when Bitcoin emerged in 2009 and 2010 I heard about it, but didn’t pay too much attention to it – I did think it was interesting though. Then a few years later I got more and more calls from clients about Bitcoin. They were either integrating or considering integrating Bitcoin – or possibly other virtual currencies – into their platforms.
One of my fintech clients was an electronic money transfer remittance type business and it started looking at virtual currency as a more efficient and cheaper way to move money across borders. As the nChain business was being set up in London – and Craig was moving from Australia to London – the money transfer business turned out to be part of the nChain group of companies. I was involved behind the scenes and helping them from a legal standpoint, but the experience made me think. After 21 years of life in the legal game, I was beginning to think about doing something more on the business side of things. I sat down with the nChain team and we had a conversation. Following that conversation, I decided to leave the law firm partnership life and join the Bitcoin world. Since then I haven’t looked back!
AM: Would you say nChain is fully focused on researching blockchain technology for the betterment of the BSV community?
JN: nChain’s inventions, its patent portfolio and research can be used on any blockchain – we’re blockchain agnostic. Some of the inventions they have aren’t even specific to blockchain. For example, one of the key early patents that Craig has acquired through nChain is a security technique that could be applied to any form of digital asset wallet, access to any digital asset.
That being said, Craig as creator of Bitcoin has always believed that the original Bitcoin blockchain and design should be the one global chain. In our view, there’s far too many blockchains, far too many cryptocurrencies and there should only be one. Just like we operate on a single public Internet, we think we should operate on a single public blockchain as the world’s data ledger. So, while nChain’s work can be applicable and used on any blockchain, we focus on using nChain’s IP portfolio to help spur the growth of Bitcoin in the form of bitcoin SV – because that is our preferred platform.
We think SV is the original Bitcoin and the best, as it will be the only blockchain that could scale to support world usage.
AM: What made you decide to follow the SV path over ABC? How long had you, Wright, and Ayre been planning to break away from BCH?
JN: We need to stop thinking about what names to put on it because there are all these different Bitcoin variant names. It all boils down to a simple question – do you believe in the original Bitcoin design? As I say in some of my speeches, if you believe in Bitcoin – a lot of people got excited when they first read that white paper and first heard about Bitcoin – then you really do believe in Bitcoin SV.
So, it wasn’t that we dislike Bitcoin ABC or Bitcoin Core; personally, it’s more about they deviated from the design of protocol that was laid out at Bitcoin’s creation. We fought to maintain the original design of protocol that lives in Bitcoin SV which led to the hash war.
We were working with the ABC group for well over a year. We supported Bitcoin Cash as restoring the original bitcoin, and we ended up getting into serious disagreements with the developer group at ABC over changes they wanted to make to the original protocol. For example, one of the big issues was they wanted to change the ordering of how transactions were ordered in a block. That’s a technical thing, but it was more a philosophical question of whether or not the protocol developer groups should be continually experimenting and introducing changes to the protocol.
That’s what happened on Bitcoin Core -BTC – for example. They introduced this thing called segregated witness (SegWit) in 2017, then in Bitcoin Cash they introduced this change to the transaction ordering as well as introducing a new operating code that wasn’t in Bitcoin scripting language. Then, going forward – as I understand – possibly introducing a pre-consensus mechanism into their future upgrades.
The fight we had wasn’t just about one individual feature, it was a bigger question of should you continue disturbing the protocol. As Craig explains all the time, if you want a financial system for the world where a transaction you send me today is valid in 10 or 20 years, you cannot allow the developer groups to constantly change the protocol. It needs to be stable because otherwise in six months or a year the protocol developer group could change something and that would undermine a lot of transactions that have come before.
It also makes it hard for businesses. If you’re running let’s say a gaming business, a supply chain management business, if you want to build an application on this blockchain and the protocol changes in 12 months in a way that harms your application, you won’t build on it. The best analogy I can give is just look at the internet. The actual Internet protocol that we all operate on does not change much. It’s been pretty stable over 20 years and that allows companies to comfortably build websites and mobile apps on it.
If you came forward and said “hey, Amazon. Every six months you better check to make sure your website works on the next update to the Internet Protocol” it’s not going to go down well. It’s really tiresome, expensive and cumbersome for companies. So, we believe the original design of bitcoin has everything it needs to grow to massive usage levels and we want to restore the original protocol – that was what really the fight was about. It wasn’t just about one technical feature here it was the philosophical should you keep experimenting with a protocol that’s designed to be a global money system and a technology ledger.
For example, in BTC – the original chain – they introduced SegWit which cuts off the digital signature from the transaction and stores it in a different way. That alone creates all kinds of technical havoc and other things. Now, they’re talking about potentially increasing the supply of Bitcoin – the very same supply that is supposed to fixed at 21 million BTC. Due to the fact that Bitcoin Core kept the block size small, you can’t fit a lot of transactions in and miners can’t remain profitable. Once the block reward cuts in half again next year, miners are going to have problems. It’s almost heresy. It’s not been decided, but there’s been a few of their leaders saying maybe we should consider raising the 21 million supply. It’s the polar opposite of what Bitcoin was supposed to do. It’s the same as saying let’s print more money.
AM: The months that followed the loss of the hash war were difficult, do you agree with the way Wright handled things by attacking the wider crypto community so aggressively?
JN: I’ve said this before, I make no apologies for Craig. He is exactly who he is and he would not have accomplished what he’s done with Bitcoin without being who he is. He is provocative and I know he pushes buttons, but you don’t dramatically change the world unless you’re provocative. Yes, some people think negatively of nChain and they say we’re a scam or Craig’s a scam. I always say well what are scamming people of? We don’t ask for money, we haven’t done an ICO and said by our token and we’ve not pre-mined a bunch of coins for ourselves. We want people to follow what we’re doing and support Bitcoin SV; not because we believe Craig is Satoshi Nakamoto or not. It’s because we believe it’s the superior technology platform. We want to stand on the proof-of-work (PoW) so to speak of what we’re doing.
Here’s why a lot of people say negative things about nChain. There are forces on the outside, like the other blockchain projects that – if we’re successful – we will make projects moot. We believe in a single blockchain, a single digital currency. That’s why there’s a lot of flak surrounding it. Of course, Craig is provocative, I get that. I try not to spend too much time thinking about it, and right now we focus on building our technology.
You’re seeing it where we’re pushing the scaling limits of Bitcoin SV, we’re proving you can scale through bigger blocks. In fact, there’s a whole bunch of companies now approaching us saying we want to build on Bitcoin SV. We just had the CoinGeek conference with a lot of great announcements. So, I view all the haters as noise, and at the end of the day we have to be successful at proving that Bitcoin SV is the superior blockchain. If we are successful then all that won’t matter one day. Right now, I know there’s noise about it, but mostly we don’t worry about it. I think it’s just a whole bunch of pointless noise.
AM: Do you believe that Wright is the real Satoshi Nakamoto? If so, has he ever proven it to you, or is it a case of blind trust?
JN: Coming into nChain, I knew I had to decide on whether I wanted to work with Craig and on what nChain was doing because I believe he is Satoshi Nakamoto or not, or do I believe in the mission he’s trying to achieve. First and foremost, I believe in the mission. Now, to the question of whether he’s Satoshi. I always pose this back as: how would anyone definitively prove that? What the world wants is for him to sign using cryptographic keys from certain early blocks on the blockchain. I know I could have a private cryptographic proof session if I wanted to with Craig. Steve Shadders – nChain CTO – recently wrote a great blog post about this and why he believes Craig is Satoshi.
The result was that he has the same position I am in. Craig offered Shadders a private signing proof session and he said no, I don’t want it because I want to be able to say I believe you’re Satoshi for other reasons. So, the fact that I know that I could get it if I wanted it gives me comfort, but the reason I believe he’s Satoshi Nakamoto isn’t just because he’s told me. It’s because as someone who works with him and our technology research team day in and day out, I see he has an understanding of Bitcoin’s scripting language, its purpose, its design and its potential – what it could be used for – that’s beyond what anyone has ever seen.
Our CTO Steve expressed this recently; he said you know every time Craig says something that doesn’t make sense about Bitcoin, Steve comes back a week later says “ohh my god, he’s right.” This is something that happens on a regular basis. It’s that more than anything else, as well as his consistent desire. He’s the one person in the cryptocurrency world who just wants Bitcoin. He’s put him and his family through a lot of difficulty and targeted attacks. For that, he has more money than he could ever need, but he keeps doing this because he has the singular vision of what he wants to bring to the world in the form of original Bitcoin. So, it’s the combination of all those things as well as things he’s told me.
It’s similar to someone coming forward and saying I’m Jesus. People will always disbelieve and say, ok prove that you’re Jesus. I get that, and that is why he is taking measures to prove that he is Satoshi Nakamoto and Bitcoin’s creator through a legal process as opposed to online and social media. I think he’s come rightly to the conclusion that nothing he ever does will satisfy the online trolls and critics – of which there are many in the crypto world. By using the legal and evidentiary process that legal systems have is a more reliable way to go about proving he is Satoshi Nakamoto.
I do mean it honestly, even though people don’t always believe it, at the end of the day it doesn’t matter to me because I know other people who work with us – including our CTO – believe in the mission of what he’s trying to achieve. Craig is fully focused on making Bitcoin in its original design succeed by scaling it and keeping it stable as a protocol for businesses and people around the world to use it reliably.
We’re seeing developers and businesses around the world catching onto that message. All the great developers from the BCH community are moving over to Bitcoin SV. To me, that’s the most telling thing sign that people see SV as the future. At the end of the day, whether he is or isn’t Satoshi, people will believe or not believe and we are winning people over by just demonstrating we have superior technology. It’s the only one that can scale, Ethereum can’t scale big which is why people are running into problems when creating tokens and other things like that.
AM: How has it been since BSV got delisted from so many exchanges?
JN: It was certainly dramatic at the moment, it created a significant drop in the price for the short term. That being said, in a weird twist of irony it further strengthened our message and it put a lot of attention on us – meaning more people were hearing about BSV. On top of this, over the past few weeks and months we have decoupled from the rest of the coins out there. Right now, most of the market moves with BTC. If BTC goes up, all the other go up and BTC goes down they go down too and that’s artificial. There’s no reason why if BTC goes up Ethereum should go up.
I guess because a lot of exchanges use BTC as a base trading pair and that’s inflated a lot by Tether which we’ve seen in the news. So, the last two days you know there was a sharp rise of the last week of BSV price and two days ago it was the only coin in the top 20 the green going up. Everything else was going down, and in an ironic twist of events we’re actually happy that our price doesn’t rise and fall with the rest of the market.
We’ll stand on our own merits. So, it was dramatic at first, it was not nice, but now due to the building that’s happened on BSV, the price is higher than it was before the delisting as well as trading at values that are separated from the rest of the market.
AM: Could we see any new exchanges launch with a BSV base pairing?
JN: I can’t go into too much detail or tell you who they are, but I’ve got probably two or three investment or business proposals over the last few months. One before the delisting happened and I had a call very recently with a company that wanted to launch a BSV base pair exchange.
AM: What major developments is BSV working on for its next upgrade? Do you think BSV will one day overtake Bitcoin Core and become a market-leading crypto?
JN: The next big thing will come at the end of July. The end of July is our protocol upgrade where we will see the next version of the BSV. The Software is already out so businesses and nodes can already upgrade to it, but the whole network upgrades on July 24th. Currently Bitcoin SV’s default block cap is at 128mb – which is pretty large compared to BTC which is 1mb and BCH which is 32. So, come July Bitcoin SV is going to increase to 2GB which is 2,000mb.
Not all the miners will move to that, but will probably use 500mb at first to test, but it’s part of a massive scaling roadmap. We’ve already received notes and contact from a lot of developers and companies saying they can’t wait to test out the bigger block capacity. We’ve already started running tests on our scaling testnet with the bigger block size and a recent test showed the ability to do 5 blocks above a gigabyte. The biggest one being 1.42gb.
That’s really big and reason is being that it will be used to help make mining remain profitable next year when the block reward cuts in half. Currently, the miners get 12.5 coins, next year that cuts in half around May on all the chains to 6.25 coins. For mining to stay profitable – this is part of the economics of Bitcoin – the miners have to make up that lost value in something else, which is the individual transaction fees they get for every transaction that goes into a block.
This is BTC’s problem and is why they want to change the supply. If you can’t fit that many transactions in a block, or you move it off chain to the lighting network, the miners don’t earn enough in transaction fees. Then, when the block reward keeps cutting in half, they earn less and less. So, we address that problem with Bitcoin’s original plan – make the blocks really big and scale big so you fit lots of little transactions in – meaning the miners get more transaction fees. We ran a series of tests on the scaling testnet, and we saw the first blocks where the miners who got the blocks got more in the transaction fees than they got for the fixed 12.5 coins block – that’s the future of Bitcoin. Once you go to smaller and smaller block rewards, you have to get more and more individual transaction fees. This is exactly why you need bigger blocks.
It’s not that we want to kill the other chains, it’s that their own plans are going to essentially force miners away from their network. This is what people don’t understand; Bitcoin’s true genius isn’t technology genius, it’s the economic incentive model of it. Once you disturb the protocol and the whole design by freezing the block cap at 1mb, over on BTC you’re going to disrupt the entire economic plan of Bitcoin.
AM: If you bump the block size up to 1gb or 2gb, how are you going to deal with new nodes joining the network? Surely nobody has an internet connection good enough to sync the blockchain at that size?
JN: The main thing people have to realize is that not everyone is meant to run a full node – that’s the big mistake. This is the big difference between Bitcoin SV and BTC people who want to preserve the ability of everybody – including people at home – to be running full nodes.
If you’re really original white paper, it’s very clear it contemplates SPV wallets (Simple Payment Verification) where you can participate in the network, be able to see and access the transactions, but not necessarily validate transactions without a full node in the full blockchain. And so that’s going to be the future where miners and some other companies will run full nodes, but the average person does not.
One term we’re using now to make this clearer is there will be listener nodes. These don’t need the full blockchain history, but they can access information from it at a lighter scale and speed. Some of these systems still have to be designed, but in our view that is the future rather than this concept that everyone has to run a full node in order to participate on the network.
AM: Are you worried that this could create centralization and fear in the crypto community?
JN: No, and I think it’s because people misunderstand what centralization is. We think centralization is not just about the number of nodes, but if you have all the power of the developer group to change the protocol, then that is centralization. They can change the protocol and the validity of transactions at any time. Yes, there will be bigger miners and mining groups, and the average person will not be the miners and doing the full validation. that being said, I still think especially as it becomes more profitable with these big data transactions we’re looking at, you’ll have bigger companies and mining groups as the miners. There won’t be tens of thousands of them, but there certainly could be hundreds – if not thousands of them one day.
We think big companies will run nodes one day; Amazon, Google and governments will run nodes one day. So, I don’t worry about that because I think we have a different view of what centralization is and what’s bad. Worse centralization is one developer group; Bitcoin Core or Bitcoin ABC determining exactly what happens on the protocol – that’s bad. This is why we want to freeze the protocol. If you get to a world where there’s several hundred minor mining groups – and even if they’re big – that’s OK.
So, if you want to be a part of the original Bitcoin and a huge part of the future of Bitcoin, you’re going to want to check out Bitcoin SV. Jimmy Nguyen and nChain are helping to make Bitcoin SV truly scalable so that everyone in the world can easily transact using the original cryptocurrency. Stay tuned to BitStarz News for breaking news and interviews with industry leading experts.