There has been much confusion over which Bitcoin to support after two great schisms in 2017 and 2018 divided Bitcoin into three variants: Bitcoin Core (BTC), Bitcoin Cash (BCH) and Bitcoin SV (BSV).
Miners, particularly, need to know which side to take because their livelihood is at stake. Here is an explanation as to why Bitcoin SV is the choice of miners wanting, not only stability, but prosperity in the coming years.
BTC, BCH and Block Reward Miners
Block reward miners are different from actual Bitcoin miners. How so? Miners are required to use up an immense amount of computational power in order to earn the right to add blocks to the blockchain, and they are incentivized for every block added in block reward fees and fees for every Bitcoin transaction processed. Block reward miners focus on using a lot of hashing power to earn the block reward diminishing subsidy and do not focus on the transaction fees because they can only process a small number of transactions on their blockchains such as BTC and BCH.
The problem with this is that block rewards are halved every four years and eventually will disappear altogether. The block reward diminishing subsidy started with 50 Bitcoin and is now down to only 6.25. Because of the halving, it is not practical to invest in highly expensive mining gear and facility just to earn the block rewards. A very good example of this is Hut 8 Mining Corp, a Canada-based block reward mining company, who reported a 67% decline in their 2020 second-quarter revenue from last year. And this is due to the halving that happened in May 2020 and the BTC price remaining depressed during that same time period.
This is why miners need to focus more on earning transaction fees, and let block rewards be just that—a reward. But BTC and BCH miners cannot help but become block reward miners. Why? Currently, BTC can process up to seven transactions per second with its tiny 1MB block size, while BCH can complete up to 60 transactions per second with its slightly larger 32MB lock size. In short, choosing to mine BTC and BCH can only lead to unprofitability.
Image source: Bitcoinsv.com
Bitcoin SV, with its commitment to massive scaling, initially increased its block sizes from 128MB to 2GB with the Quasar Upgrade in July 2019, just less than a year since it officially separated from BCH in November 2018. Bitcoin SV released the Genesis Upgrade in early 2020, which permanently uncapped its block sizes, meaning the sky is the limit.
Today, Bitcoin SV can process thousands of transactions per second, with a goal of increasing it to 50,000 in 2021. This is very good news for miners as these huge blocks pave the way for cheaper microtransactions, which only serve to boost transaction volume as well as increase consumer adoption and, in effect, raise miner revenues. And this is why Bitcoin SV miners will not only survive each halving, but also increase its profitability in the coming decades.