Bitcoin SV’s Horrible April, by the Numbers
The biggest story in the Bitcoin world over the past couple of weeks has been the increased rejection of Bitcoin SV (BSV) by prominent members of the Bitcoin community.
BSV was created as a spinoff coin of Bitcoin Cash (BCH) last November. BSV differs from BCH in that it has a larger block size limit and a lack of some specific smart contract functionality.
Many Bitcoin users never took BSV seriously due to the fact that it is highly centralized behind CoinGeek Founder Calvin Ayre and nChain Chief Scientist Craig Wright, who has made numerous highly dubious claims about his credentials over the years (as pointed out by Wikileaks, longtime Bitcoin Core contributor Greg Maxwell, Charles Sturt University, Ethereum creator Vitalik Buterin, and others). But the indifference toward BSV turned to outrage when some in the crypto community: including Blockstream CEO Adam Back, “What Bitcoin Did” host Peter McCormack and the pseudonymous Twitter user Hodlonaut; started to receive legal threats regarding their references to Wright as a fraud.
Multiple exchanges, most notably Binance, are now delisting BSV, which appears to be having a largely negative impact on the price. Having said that, BSV’s price was already heading in a downward direction before these recent developments.
According to OpenMarketCap, BSV fell from $90.39 on April 3rd to $70.11 on April 14th — a drop of 22.4%. By April 16th (the day after Binance announced it will be delisting BSV), the price had fallen another 22.2% to $54.55. In total, this is a nearly 40% drop in less than two weeks.
The More Serious Issue
Of course, the falling BSV price also creates a separate, more serious issue in terms of security. We recently covered the security issues that could face BCH after it experiences its first halving next year, but the security picture looks much worse for BSV.
According to data from Blockchair, BSV miners earned $157,187.40 on January 1st, but they only earned $98,124.61 on April 16th. This represents a decline of 37.5% in daily BSV miner revenue.
This decline in miner revenue has affected the BSV hashrate. According to BitInfoCharts, the BSV hashrate has declined from 976.5964 petahashes per second on April 1st to 699.5656 petahashes per second on April 16th — a decline of 28.4% in just over two weeks.
By comparison, Bitcoin’s estimated hashrate for April 16th was 47.3767 exahashes per second. This means it would take around 1.5% of Bitcoin’s network hashrate to perform a sustained 51% attack on BSV (as of April 16th).
Much like BCH, BSV will also experience a halving before Bitcoin next year, which could further worsen BSV’s issues with hashrate as compared to Bitcoin.
The end result of all this is the BSV chain is extremely unsecure as compared to Bitcoin, and the problem is now getting worse. Key members of the BSV community seem to have kicked the hornet’s nest with the legal threats to various Bitcoin users. Exchanges and wallet providers have already denounced Wright and Ayre’s activities, and their problems could get much worse if miners decide to join the retaliation.