Letter #32: Bitcoin Satoshi Vision and the Endless Stream of 51% Attacks
Dear Readers,
Blockchain is well-known for a variety of reasons. However, one of its most sought after features is the security inherent in its design. Blockchains are decentralized ledgers that are often shared among tens of thousands of computers and individuals, meaning that they don’t have a single point of failure for bad actors to attack. Blockchains are also typically public, meaning that network participants are able to identify attacks in progress much more quickly than closed and opaque systems operated by corporations and governments. That said, security is not perfect for any blockchain and they are susceptible to certain types of attacks and hacks, just like any other technology. Participants in the cryptocurrency sphere received a stark reminder of that weakness last week thanks to a 51% attack on the blockchain for Bitcoin Satoshi Vision (BSV).
A Return to Satoshi’s Nakamoto’s Original Design?
Bitcoin was created in late 2008 by a pseudonymous individual or group named “Satoshi Nakamoto”. While we don’t know much about Satoshi, we do know quite a bit about the protocol (i.e., the Bitcoin blockchain) she/he/they created. After all, the underlying software code has been publicly available since before the blockchain’s genesis block was mined and Satoshi remained in the community to answer questions and help troubleshoot the network for the first two years. Satoshi’s original definition of Bitcoin was as follows:
“A purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution.”
A number of Bitcoin’s critics, including some from within cryptocurrency circles, believe that the flagship cryptocurrency has lost its way because it is not currently used heavily for transactions. During periods of high demand to use its blockchain, network fees can rise substantially, making it impractical to transmit low-value transactions over the blockchain’s base layer. Additionally, as many readers will know, Bitcoin has been compared more frequently to digital gold than to digital cash over the course of the current bull run.
These developments have resulted in claims that Bitcoin and its proponents have lost sight of Satoshi Nakamoto’s original goal of creating a digital form of cash that, perhaps, could replace forms of money our societies have used up to this time. As a result, a number of Bitcoin supporters created a fork of its blockchain that greatly increased the block size of the blockchain in order to reduce network fees for even the smallest of transactions. Out of this fork, Bitcoin Satoshi Vision was born.