Will Genesis upgrade signal the beginning of the Bitcoin financial powerhouse? – ZDNet

The Bitcoin SV network is preparing for a hard fork protocol upgrade on Feb. 4, 2020, which is code-named the Genesis upgrade.

This significant upgrade is planned to include a set of protocol restoration changes that represent an almost complete return to the original Bitcoin protocol documented in the white paper in August 2009

This upgrade will restore the original Bitcoin protocol, keep it stable, and allow it to massively scale by removing the limits that can be set in a block. And its going to completely change the way that Bitcoin is used on the blockchain. The Bitcoin Association believes that Bitcoin SV is Bitcoin.

By removing the limits on a block and enabling scaling up to 2GB per block, Bitcoin SV blockchain will be able to support significantly higher transaction volumes and more transaction fees for miners.

Fees for transactions across the blockchain will change too. For two parties without trust, the fee rate should remain at 1 satoshi/byte until after the Genesis hard fork of the Bitcoin SV network.

After Feb. 4, 2020, blockchain service provider TAAL predicts that there will be a change to the default fee rate to 0.5 satoshis/byte and a change of relay fee to 0.25 satoshis/byte. A satoshi is the smallest divisible unit of a Bitcoin charged per byte of data.

These tiny, insignificant transaction fees are predicted to entice enterprises to utilize the technology. It is far cheaper and more efficient to store data and transactions on the ledger than it is to store it in a data center -- or the cloud.

Due to this upgrade Bitcoin usage is predicted to explode in late February as most network-wide limits are removed from the scripting language and network propagation rules.

There has been a push for several years to remove the limits due to the block subsidy "halving" event that happens in May.

Then, the reward that miners receive will be cut from 12.5 Bitcoin BTC to 6.25. Miners are in this to profit, and without the subsidy, mining BTC is not profitable and could reduce the chances of Bitcoin BTC success.

However, all are not happy with Bitcoin SV Genesis upgrade plans. Miners of other Bitcoin protocols, such as Bitcoin BTC, seem to feel threatened by Craig Wright, who I think is indeed Satoshi Nakamoto, the creator of Bitcoin.

Bitcoin BTC has completely changed, mainly due to the software soft fork Segwit (Segregated Witness), implemented on Bitcoin BTC in August 2017.

Anonymous tweeter and supporter of Bitcoin SV @Street5Wall reckons that these changes have fundamentally changed BTC -- so much that it is no longer considered Bitcoin anymore.

Many other changes were made to the original Bitcoin protocol that essentially made BTC unusable except as a "collectible," which is totally not what its creator Satoshi had in mind.

The Genesis upgrade to Bitcoin BSV completely restores the Bitcoin protocol to its original version on Feb. 4, 2020, and removes all block size caps (currently at 2GB on BSV compared to 1MB on BTC).

BTC is only capable of seven transactions per second compared to 140,000 transactions/sec on BSV. Genesis will increase that number dramatically. BSV can already handle more transactions/sec than credit card company Visa.

Bitcoin BTC transaction fees are already high. In 2017 there was a "bubble" where some transactions were costing upwards of $50. Because of the small block limit -- 1MB -- for transactions, the queue became longer and made transactions significantly longer to confirm.

Bitcoin BTC could probably suffer as a result of the Genesis upgrade -- perhaps as early as May 2020, as the block reward for mining reduces from 12.5 to 6.25 BTC per block.

Being able to scale is really important. The BTC limitation of 1MB blocks was always designed to be a temporary limit.

If the lost revenue can not be recovered with transaction fees, then miners will go away and BTC will suffer. By removing the limits, as Satoshi intended,

Bitcoin can be used freely by businesses and people. More transaction capacity equals more fees, even if those fees are only 1/3 of a cent.

As mentioned in the original white paper, Bitcoin was intended to be scalable from day one without side chains forming such as the 'Lightning Network' and others.

The upcoming Genesis upgrade on Bitcoin SV will remove these limits as originally intended by the designer of the original blockchain protocol and return Bitcoin to its original scalable state.

The problem with the Lightning Network is that it removes the economic incentive for miners to transact across the network as miners feel that revenue will go to the second layer -- not the miners themselves.

The Lightning Network does not seem to work successfully as it is an anonymous network with no public ledger of transaction recording.

The challenge is that people cannot send Bitcoin BTC. It is too expensive to use.

Perhaps large organizations will begin to announce Bitcoin integration into their business models once the Genesis upgrade has proved itself capable of scale.

Some enterprises could have been waiting for a long time to utilize the technology but have possibly been discouraged due to the high transaction fees and ever-changing protocol.

Enterprises want a locked, stable protocol and fee structure before they commit time and resources to build applications on top of it, instead of then having to constantly change their development process whenever the base protocol changes.

The Blockchain conference taking place in London on Feb. 20 has two well-known -- outside the crypto world -- speakers, which seems to validate Bitcoin SV's credibility and could encourage mainstream investors to stand up and take notice: This could be the beginning for real large scale enterprise adoption taking Bitcoin BSV into uncharted enterprise territory.

The Genesis upgrade could signal a massive change in the way that people use Bitcoin. There could be very exciting times ahead for both Bitcoin miners and users.

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Will Genesis upgrade signal the beginning of the Bitcoin financial powerhouse? - ZDNet

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