The Bitcoin SV (BSV) Story: A Chronicle of Forks, Feuds, and the Quest for Satoshi's Vision

At 00:40 AM Beijing time on November 16, 2018, the cryptocurrency world witnessed a pivotal moment as Bitcoin Cash (BCH) underwent a highly anticipated hard fork, igniting the first hash war in digital currency history. The two sides vying for dominance were nChain, a development team backed by self-proclaimed "Satoshi Nakamoto" Craig Wright and gambling tycoon Calvin Ayre, and Bitcoin ABC, supported by Bitmain founder Jihan Wu and "Bitcoin Jesus" Roger Ver. Their inability to agree on the best way to develop BCH and deploy code updates ultimately led to the hard fork, splitting BCH into BCH ABC and BCH SV camps, with a hash war to determine the victor.

Emerging from a Bitcoin hard fork in August 2017, BCH faced another split just a year later. This time, without replay protection, the battle relied solely on computational power. As the fourth-largest cryptocurrency by market capitalization, the BCH hash war garnered significant attention, impacting Bitcoin and the broader digital currency market while raising profound questions about future community governance models.

The hash war raged for over a week, commencing on November 16th and concluding on November 23rd with SV conceding defeat in the battle for naming rights. This marked the official end of the conflict, with BCH splitting into the original BCH chain and the newly formed BSV chain.

Bitcoin SV, with "SV" standing for "Satoshi Vision," aims to realize the original vision of large-scale on-chain scaling, aspiring to become a globally used peer-to-peer electronic cash and value transfer network. Backed by Craig Wright, BSV claims adherence to the original specifications outlined by Satoshi Nakamoto in the Bitcoin whitepaper. The key technical distinction between BSV and BCHABC lies in block size, with SV opting for a larger 128MB block size.

Positioning itself as a "pure" implementation of Bitcoin Cash, Bitcoin SV sets out to fulfill Satoshi Nakamoto's original vision as outlined in the Bitcoin whitepaper. In contrast to other Bitcoin Cash implementations that deviate from the original protocol, Bitcoin SV's roadmap focuses on restoring Satoshi's vision, maintaining protocol stability, implementing massive scaling, and ultimately enabling large enterprises to confidently build on a robust Bitcoin Cash foundation.

BSV and "Faketoshi": A Story of Controversy and Speculation

As the cryptocurrency world gears up for a series of halving events, the year 2020 appears poised for a "bull market," despite increasing global uncertainty. While Bitcoin's price fluctuations often dictate the market's overall direction, let's shift our focus to the rise of Bitcoin SV (BSV) and explore the intricate power dynamics within the cryptocurrency ecosystem.

Genesis of BSV

As a fork of Bitcoin Cash (BCH), BSV's lineage can be traced back to Bitcoin itself. This begs the question: Why so many forks, and what makes BSV stand out?

One of the most criticized technical limitations of Bitcoin is its small block size. With a 1MB block size limit and a 10-minute block generation time, the Bitcoin network struggles to process a high volume of transactions, falling short of its intended purpose as a global peer-to-peer electronic cash system.

To address scalability issues, numerous forks, including BCH and BTG, emerged, each attempting to improve upon the original Bitcoin protocol. While many faded into obscurity, some, like BCH and BTG, gained recognition and adoption.

The story takes another turn when disagreements within the BCH community regarding its development roadmap led to another contentious hard fork. The resulting hash war pitted Craig Wright and Calvin Ayre-backed nChain against Bitcoin ABC, supported by prominent figures like Jihan Wu and Roger Ver.

This clash of titans captivated the industry, ultimately leading to the birth of BSV as a separate chain. By claiming to embody "Satoshi Vision," BSV positions itself as the true inheritor of Satoshi Nakamoto's original vision for Bitcoin, promising a brighter future with global adoption and widespread commercial use.

However, the story of BSV is inseparable from the controversy surrounding Craig Wright's claim to be Satoshi Nakamoto. This claim, widely disputed within the cryptocurrency community, adds another layer of complexity to the narrative surrounding BSV's future. While BSV proponents view it as the true realization of Satoshi's vision, its association with the controversial "Faketoshi" remains a point of contention and a potential obstacle to its widespread acceptance.

The Man Behind BSV: Is He Really Satoshi Nakamoto?

Now that we've explored the origins of BSV, let's delve into the nChain team, responsible for its creation after losing the hash war.

At the heart of this story lies Calvin Ayre, an Australian gambling tycoon who funded Coingeek, the blockchain company backing BSV during the hash war. Ayre amassed his wealth through online gambling and became closely associated with Craig S. Wright, an Australian computer scientist often referred to as "Faketoshi" by critics.

Their paths first crossed in 2007 when Wright worked as a security consultant for Centrebet, a prominent Australian online casino. At the time, "S" (name abbreviated for privacy), the head of the project's network, later became the CTO of one of Ayre's companies in 2010. Subsequently, Wright joined the same company through S's recommendation.

In an interview with ChainNews, Ayre stated, "... Craig S. Wright, who created Bitcoin, was working for me then, but I didn't know him. A lot of people knew about Bitcoin because of Craig. Then around June or July 2015, I met with Craig, and he explained the principles to me, which connected all the dots for me, and I finally understood what this technology meant. Since then, I've become more actively involved with it."

According to Ayre, Wright, introduced through a colleague, pitched Bitcoin to him, ultimately leading to the creation of BSV. Ayre even claimed in interviews that BCH would amount to nothing and that the attacks against BSV stemmed from fear of Wright's technological prowess surpassing the original BCH.

However, another version of events suggests a more calculated approach. In this narrative, Ayre, recognizing Wright's technical expertise, orchestrated a plan to portray him as Satoshi Nakamoto. This alleged scheme arose as Wright faced financial turmoil with his company nearing bankruptcy and an ATO investigation for tax fraud, leaving him deeply in debt. Ayre reportedly offered a $15 million lifeline in June 2015 to bail Wright out, with two stipulations: transferring all Bitcoin intellectual property rights and publicly claiming to be Satoshi Nakamoto.

This raises the question: How do you manufacture a Satoshi Nakamoto? Especially considering previous failed attempts by individuals from India and Pakistan, met with ridicule from both the media and the cryptocurrency community.

Fabricating Satoshi

Perhaps learning from past failures, Ayre and Wright opted for a different approach, choosing third parties to unveil the "Satoshi" identity. On December 8, 2015, both WIRED and Gizmodo simultaneously published articles claiming that Craig S. Wright, an Australian computer scientist, was likely the real Satoshi Nakamoto.

The articles cited a series of anonymous email tips leading them to believe that they had uncovered the true identity of Bitcoin's creator. A hacker claiming to have accessed Satoshi Nakamoto's corporate account provided Gizmodo with email correspondence seemingly originating from Wright's Outlook account.

The evidence presented by WIRED and Gizmodo included (note: these pieces of evidence cannot be confirmed or denied):

• Minutes from a 2014 meeting: These detailed a discussion between Wright, his lawyers, and the Australian Tax Office regarding Bitcoin regulation. Wright seemingly attempted to persuade the Australian government to treat Bitcoin as currency rather than a taxable asset, fearing repercussions for his business interests. During this meeting, he allegedly stated, "I did my best to try and hide the fact that I've been running bitcoin since 2009," and "By the end of this, I think half the world is going to bloody know." Gizmodo contacted individuals mentioned in the minutes, who confirmed their participation in the meeting.

• Email correspondence: In an email sent from [email protected], Wright contacted an Australian senator inquiring about Bitcoin regulations and pushing for its recognition as currency. This email address was allegedly used by Satoshi Nakamoto to communicate with early Bitcoin users and developers.

• Tulip Trust mention: Another email revealed Wright's alleged entrustment of 1.1 million Bitcoins to Dave Kleiman for the establishment of the Tulip Trust. The email also stated that Kleiman agreed not to disclose Wright's ownership of [email protected], the email address used by Satoshi Nakamoto to publish the Bitcoin whitepaper. (Source: @SilkRoadFlowerLanguage)

The CSW Saga: Unveiling the Self-proclaimed Satoshi Nakamoto

In essence, the attempt to convince the world that Craig Wright (CSW) is Satoshi Nakamoto, the enigmatic creator of Bitcoin, was "engineered" in two parts:

1. The Media Reveal: Two publications published articles proclaiming CSW as Satoshi, based on information provided by a hacker who claimed to have breached CSW's accounts. The "evidence" primarily consisted of a 2014 email where CSW pitched Bitcoin to the Australian government and the alleged use of an email address associated with Satoshi.

2. The Tulip Trust: CSW, through a business partner, claimed to have established the Tulip Trust. This served three purposes:

   • It allowed him to avoid immediately proving ownership of a large sum of Bitcoin by claiming to only control a portion of the trust's private keys (allegedly 7 out of 15, controlling access to 825,000 locked Bitcoin).

   • It provided a convenient way to sidestep the need to demonstrate ownership of over 1.1 million Bitcoin mined in Bitcoin's early days, which would be strong evidence in his favor.

   • The trust's alleged co-founder, Dave Kleiman, was purportedly Satoshi's chosen successor for Bitcoin.

However, CSW's efforts fell flat.

Despite an endorsement from Gavin Andresen, an early Bitcoin developer and Bitcoin Foundation founder, the wider cryptocurrency community remained skeptical of the self-proclaimed Satoshi.

Even the judge presiding over a related lawsuit (Dave Kleiman's brother against CSW) expressed disbelief: "I completely reject Dr. Wright’s testimony about the alleged Tulip Trust, the alleged encrypted files, and his alleged inability to identify his bitcoin holdings. Dr. Wright’s story not only was not credible, but it was contradicted by other evidence in the case…."

Besides the unverifiable emails, CSW tried to bolster his claim by publicly demonstrating a digital signature matching Satoshi's from the early days of Bitcoin development. However, this "evidence" was later debunked as a copy-paste job from one of Satoshi's publicly available old signatures.

For the crypto community, the only acceptable proof would be either a signature from the genesis block (the very first block of the Bitcoin blockchain) or moving some of Satoshi's Bitcoin holdings. CSW initially promised to move Bitcoin from the genesis block and sign it with the corresponding private key, but later backtracked in an open letter, essentially stating he lacked the courage to prove his identity. This only fueled the skepticism surrounding him.

While the events unfolded in 2016, the story didn't end there. In 2018, Ira Kleiman, brother of the deceased Dave Kleiman, sued CSW, claiming he had defrauded his brother of 1.1 million Bitcoins, worth $100 million at the time, and related intellectual property. Thus began the infamous billion-dollar Bitcoin lawsuit (now worth $96 billion).

At the heart of this lawsuit lies the enigmatic Tulip Trust, the cornerstone of CSW's narrative.

The Tulip Trust and the BSV Frenzy

Originally scheduled for January 2020, the unveiling and unlocking of the Tulip Trust have been further delayed. According to court documents from the Southern District of Florida, US District Judge Beth Bloom granted an extension for CSW to unlock and surrender the Bitcoin held within the Tulip Trust, pushing the deadline to February 3rd. The delay is attributed to disputed facts surrounding CSW's alleged interference with Dave Kleiman's estate.

The unlocking of the trust holds significant implications, drawing attention from across the industry:

1. Confirmation of Satoshi: If the trust unlocks, it would lend significant credence to either CSW or Dave Kleiman (who passed away in 2013) being Satoshi Nakamoto.

2. BSV Price Surge: Rumors suggest CSW plans to use his share of the unlocked $96 billion (the other half potentially going to Kleiman's brother) to bolster Bitcoin SV (BSV), a Bitcoin fork he supports. This could lead to an unprecedented price surge for BSV, potentially surpassing Bitcoin Cash (BCH).

Regardless of how he utilizes the funds, the unlocking of the trust and CSW potentially gaining access to $48 billion would likely cause a significant BSV price increase.

However, with the unveiling pushed to February 3rd, whether BSV will experience a 3-4x price surge beforehand remains uncertain.

The Tulip Trust, not a name created for translation, first appeared in leaked documents provided to media outlets in December 2015. Allegedly written by Dave Kleiman, a forensic computer investigator, the document described a trust containing 1,100,111 Bitcoins, combining CSW's mined and purchased Bitcoin from 2009-2011. This trust, managed by at least three and no more than seven individuals, aimed to prevent misuse. The document states that all private keys would be returned to CSW on January 1, 2020.

Based on Bitcoin's price in 2014, the over one million BTC held in the Tulip Trust were worth only hundreds of millions of US dollars. However, as if CSW or Dave Kleiman had foreseen the future, they named the trust "Tulip." In just a few years, the value of those million-plus Bitcoins has skyrocketed to over $9.6 billion. Calling this bubble "Tulip" couldn't be more apt.

However, this apparent foresight raises suspicions. It’s hard not to wonder if the trust, which was leaked to the media by hackers in 2015, was part of a premeditated scheme. The story told in the Tulip Trust lawsuit, while convincing to the judge, seems incredibly far-fetched: The plaintiff claims his brother, Dave Kleiman, was a co-creator of Bitcoin and that Dr. CSW misappropriated 550,000 of his brother’s Bitcoins and associated intellectual property rights. The story goes that his brother was hospitalized in 2010 with deteriorating health and passed away in 2013 without leaving a will to inform his family about the 550,000 Bitcoins, the intellectual property, or any other information related to Bitcoin. After his death, Kleiman’s estate was found to be in significant debt, leading to the foreclosure of his home.

The younger brother, too, believed that his brother had left behind nothing but debt. This changed when Dr. CSW, the supposed business partner, emailed the plaintiff in 2014 to inform him of his brother's involvement in the creation of Bitcoin. Dr. CSW urged the plaintiff to keep his brother's hard drive safe, as it potentially contained hundreds of thousands of Bitcoins. The plaintiff apparently responded by saying he had already formatted the hard drive and asked what he should do.

Dr. CSW reportedly offered the plaintiff $12 million and a 50% stake in the company. For four years, from 2014 onwards, the plaintiff seemingly failed to recognize that his brother's partner had misappropriated 550,000 Bitcoins and valuable intellectual property rights. Then, in 2018, as Bitcoin’s price surged to $20,000, he suddenly filed a $10 billion lawsuit in a Florida court.

The evidence provided by the plaintiff, including the trust documents, is consistent with the previously leaked documents. However, if this trust truly exists, why does the plaintiff lack any original evidence from his brother? The ownership of the 1.1 million Bitcoins, worth $10 billion at the time of the lawsuit, lies at the heart of the case. With no evidence to prove or disprove the claims, and all parties potentially compromised, the case remains a stalemate. Given the potential financial gain, even if the plaintiff knew his brother was never involved in any trust, he’d be unlikely to reveal the truth.

Personally, I find it hard to reconcile Dr. CSW's decision to contact the plaintiff, effectively shooting himself in the foot, with the genius persona expected of the "father of Bitcoin."

His background is far from simple, which may explain why, unlike other self-proclaimed Satoshis who were quickly debunked and disappeared, CSW has managed to drag out the lawsuit and repeatedly make empty promises, all while retaining a large number of followers.

Publicly available information states that CSW holds multiple bachelor's, master's, and doctoral degrees in fields ranging from economics and computer science to statistics, mathematics, and law. In addition to these degrees, he boasts numerous certifications in computer technology, including 24 GIAC security credentials, some of the highest honors in computer science. (CSW's GIAC certifications can be viewed here: https://www.GIAC.org/certified-professional/craig-wright/107335). CSW was also the world’s first GIAC Security Expert (GSE).

Until July 2015, CSW served as CEO of approximately 15 companies.

He has undoubtedly possessed substantial Bitcoin holdings. WIRED magazine reported on December 8, 2015, that a clue to CSW's Bitcoin wealth was found not in the leaked documents but on a corporate consultancy firm's website. This was a liquidation report for Hotwire, one of the companies CSW founded.

Hotwire aimed to establish a Bitcoin-based bank. Data revealed that in June 2013, CSW's Bitcoin holdings generated a $23 million return for the startup. By the end of 2015, this sum had ballooned to over $60 million. At the time of the company's founding, CSW's investment alone accounted for more than 1.5% of the total Bitcoins in existence, a surprisingly large amount for an unknown player in the Bitcoin world. Furthermore, tax records from 2014 revealed that CSW used 450,000 Bitcoins, worth $500 million at the time, to purchase core banking software.

Based on the information presented, CSW possesses multiple degrees, is a GIAC security expert, served as CEO of multiple companies before coming into the spotlight, and has held substantial Bitcoin assets. He hardly fits the profile of someone who would need to impersonate Satoshi Nakamoto for financial gain. If anything, his claim to be Satoshi has resulted in investigations by the Australian Tax Office, the liquidation of his companies, reputational damage, and widespread condemnation from the crypto community he claims to champion. The lack of clear motive and the absence of any tangible benefit derived from his claim make CSW's impersonation of Satoshi Nakamoto seem illogical, leaving the entire saga shrouded in mystery.

Unless CSW can unlock the trust with a private key and gain ownership of the $9.6 billion worth of BTC, BSV will always have a compelling story to tell, regardless of its veracity.

Back in 2013, there was a saying about BTC: "Bitcoin is definitely a scam, but strangely, it only seems to scam the smartest people in the world. Fools haven't figured it out yet."

This statement seems to apply to the current situation with BSV, Craig Wright, and the Tulip Trust. It's arguably a scam, but one that only ensnares the intelligent.

Will BSV skyrocket to $1,000?

Recent market data reveals a near-threefold surge in BSV's price, skyrocketing from $97 to a peak of $459, a staggering 373% increase.

Unlike smaller coins that can easily experience tenfold or even hundredfold gains, this rapid ascent of a major cryptocurrency to the 4th position by market cap is nothing short of remarkable. While the peak of $400 during this rally remains a significant distance from the $1,000 target proclaimed by its proponents, BSV's brute force and sheer audacity have captivated the attention of investors and speculators alike. Any future price surge could trigger a massive influx of capital driven by FOMO.

Beyond the movements of retail investors, it's crucial to examine the state of hashing power. BTC, BCH, and BSV all employ the SHA256 algorithm, meaning that the same mining hardware can be used to mine any of these cryptocurrencies. Guided by the principle of profit maximization, hashing power naturally gravitates toward whichever coin promises the greatest return. BSV’s recent price surge has already resulted in a doubling of its hashrate. It’s essential to remember the very genesis of BSV—a hash war instigated by a gambling tycoon aiming to render BCH worthless through brute computational force. If BTC and BCH mining power begins to migrate to BSV, it’s only a matter of time before BSV's hash rate surpasses that of BCH.

So, will BSV one day become the true Bitcoin? From a technical standpoint, many cryptocurrency enthusiasts remain skeptical not only of Craig Wright's claims but also of both BCH and BSV.

Satoshi Nakamoto envisioned Bitcoin as a global, decentralized peer-to-peer electronic cash system and value transfer network. Its only apparent flaw seems to be scalability, but can simply increasing the block size and transaction capacity truly bring about the "perfect Bitcoin"?

The answer is far from simple. Critics argue that increasing the block size leads to a critical problem—higher transaction fees. Since Bitcoin's fee structure is largely agnostic to transaction size, indiscriminately raising fees for all transactions would disproportionately impact small transactions, potentially resulting in a scenario where transaction fees exceed the value of the transaction itself. Given that the vast majority of transactions are small, this could cripple the network and lead to systemic collapse. While Bitcoin might remain viable as a blockchain ledger used solely for large transactions, both BCH and BSV, with their relatively low user bases and transaction volumes, may struggle to survive under such conditions. This is a core reason why many remain unconvinced of either BCH or BSV's long-term technical viability.

In conclusion, while the veracity of the claims supporting BSV might be debatable, its short-term trajectory hinges on its ability to attract speculative capital through narratives and price momentum. From a long-term perspective, BSV faces fundamental technical challenges that prevent it from fulfilling the true "Satoshi Vision." The notion of it being the true heir to Bitcoin appears to be little more than a marketing gimmick embraced by its proponents.

With the upcoming halving events for BTC, BCH, and BSV in the first half of this year, the "Three Musketeers" of the Bitcoin family might just lead the charge for all halving-related cryptocurrencies. So how should one navigate this landscape? Remember the adage: You can't make money beyond your level of competence. Any gains made through luck will eventually be lost through a lack of skill. Therefore, I urge everyone to dedicate sufficient time to research and understand BCH and BSV thoroughly.
Cast a wide net for information and develop a nuanced understanding of these projects. Only then can you effectively differentiate between market noise and valuable information, enabling you to make informed decisions that can lead to well-deserved profits.

When market prediction becomes impossible, equip yourself with both ammunition and a map. Understand the path forward and know when to take your shot.

References:

Existence is reason, rising is truth -----BSV
https://mp.weixin.qq.com/s/hNWFGKf2qGAfELiln_KuyA

"A Comparative Analysis of Bitcoin Forks"
https://mp.weixin.qq.com/s/yLzhHiaOWWNqBN0JVl2VKQ