To think just a couple of years ago, people were debating whether the Bitcoin blockchain could handle transaction blocks of 2MB or more. On January 25, the BSV Scaling Testnet proved it’s capable of something far greater—mining a block of just over 1GB. Block #14893 contained 5,449,866 transactions, the most number of individual transactions in a block.
The massive block proves the Bitcoin technologies being developed by nChain and the Bitcoin SV Node team can serve all tiers of the global economy. This includes everything from large-scale enterprise applications to small transactions between individuals.
So Genesis is live on the STN. We showed you #bitcoin scales. So how about some creative transactions?? #bitcoinsv. Test those future use cases (only a couple weeks away)? Not sure people realise the new industry arms race that starts Feb 4th..
— Brad (@brad1121) January 26, 2020
Block size and fees will play a major role in the future
Additionally, the block produced 10.73654716 (testnet) BSV in transaction fees, which would translate to US$2,882 in real BSV at current prices. To put that in perspective, the current block reward by itself is 12.5 coins. That will halve to 6.25 coins around the middle of 2020.
As the block reward diminishes, miners will increasingly need to collect transaction fees to remain profitable. That will come from (a) a proportionate rise in coin value, (b) an increase in fees per transaction, or (c) more transactions.
With blocks limited to 1-4MB, only options (a) and (b) are feasible on the BTC chain. The BCH mainnet allows 32MB blocks but is currently grappling with issues over how to fund protocol and infrastructure development. BSV, meanwhile, has large-scale enterprise and government uses cases firmly in its sights—and with today’s record block, has proven it has the technology required to actually scale to the levels necessary.
Satoshi’s Vision is for something even larger than 1GB per block. nChain’s Teranode project, currently in development, is a future version of the Bitcoin protocol aimed at enterprise and designed to handle blocks in the terabyte-sized realm.
It’s this world-scale vision and thinking that has attracted future-oriented imaginations and talent to Bitcoin SV. While other blockchain projects focus on financial transactions, smart contracts and second-layer fixes, BSV looks at applications and rich media on the Metanet, an on-chain version of today’s internet. The Metanet could not only supersede the internet, but provide it with auditability and immutability—a place where changes can still take place, but those changes will be recorded.
Part of BSV’s ethos is having an eye on future needs, and planning methods to meet them. One of the things that has limited Bitcoin and blockchain growth over the past decade is a simple lack of vision. It was hard for most to imagine today’s use of the internet while observing its capabilities in 1996, and the same was true for blockchain in the 2010s.
Tech entrepreneur and investor Calvin Ayre noted on Twitter that nChain holds patents over a number of the technologies used to push a blockchain to such a scale:
— Calvin Ayre (@CalvinAyre) January 26, 2020
Licenses to use the technology these patents cover will benefit developers working on the BSV blockchain. Should they be enforced and upheld in the future (which looks likely) developers on other blockchains would need to pay a licensing fee.
Block #14893’s record size also took over an hour to confirm. However, it’s important to note that the Bitcoin 1.0.0 (or “Genesis”) upgrade, which takes place on February 4, 2020, allows both transactions and blocks to confirm in parallel, preventing other users from getting “stuck” in large-block scenarios while still recording them on the blockchain in the correct sequence.
Future BSV mining scenarios see increasing professionalism and specialization in the sector, with larger mining operations designed specifically to handle such volumes, while “smaller” scale operations take care of everything else. Already, large-volume applications on BSV like WeatherSV have negotiated their own fee deals with miners. Advances in technology, both on the hardware and software side, will make that future far more possible than current commentators realize.
Editor’s note: An earlier version of this article stated that Block #14893 was a record-sized block for any existing chain so far, and contained 5,449,866 transactions. The 1GB size of the recent block was not the record, but the number of individual transactions in the block. There were many 2GB blocks mined on the Scaling Test Network.
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