Perhaps one of the biggest stories to come out of crypto in the first half of 2019 was the mass delisting of bitcoin SV (BSV) following harsh criticism of fraudulent claims by Craig Wright. The delisting was rather swift and was supported by many powerful exchanges across the crypto industry and led to a severe plunge in the value of BSV as a result. Rather than merely a story of a coin being delisted, it is a testament to the community behind cryptocurrency, the sacredness attached to the identity of Satoshi Nakamoto and also how a globally used token was brought down by the actions of a single individual.
To fully understand bitcoin SV and its current predicament, it is important to go back to the roots and explore the actions leading up to the delisting.
The Origins of bitcoin SV
While bitcoin SV dominated the news in April 2019, it was created only last year, in November 2018, after bitcoin cash experienced a hard fork that led to the creation of two new tokens- bitcoin Satoshi Vision and bitcoin Adjustable Block Size Cup (Now known simply as Bitcoin Cash). The hard fork was not without controversy, as there were confrontations between the miners of the two chains, with each claiming to be superior to the other. However, even this confrontation did not start with the two tokens but rather was an offshoot of a confrontation that took place in 2017, when bitcoin experienced the hard fork that led to the creation of bitcoin cash.
Interestingly enough, bitcoin cash supporters claim that the original bitcoin did not follow the original idea laid down by Satoshi Nakamoto and bitcoin SV supporters claims that bitcoin cash also does not follow in this vision.
Considering how shaky the origin of bitcoin SV itself and the ideological battle that is being fought within the bitcoin community, it is not surprising that it has gone on to experience even more controversy.
What BSV is
What is the supposed vision of Satoshi that has not been followed purely by other tokens? According to the original bitcoin whitepaper, there are four key elements that every blockchain should have which are stability, security, the safe and instant transfer of funds and scalability. Certain blockchain systems such as Bitcoin and Ethereum struggle with scalability even as they grow in popularity which has, to an extent, hindered their growth. bitcoin SV has very large block sizes of 132 MB miner configurable block sizes compared to 1 MB which is held by bitcoin. There is also a great emphasis on security for the network while aiming to bring transaction fees to almost zero in a bid to increase worldwide adoption.
Despite all of this BSV was never considered a major token since its launch and by many people standards, it was simply a less powerful version of bitcoin itself. Nevertheless, it had its community behind it and it had a modest price with a market cap of $3 billion as of July 22nd, 2019.
The events that sparked the downfall of BSV were, ironically, not necessarily market-related but due to some drama surrounding the creator of bitcoin SV Craig Wright. Wright was, on his own, a very controversial figure in the crypto world and has claimed for quite some time that he is Satoshi Nakamoto, the creator of bitcoin. For a while, this was dismissed as simply being wild claims on his part, but things took a more serious turn after he began to make enemies of very powerful crypto figures.
This started with Hodlnault, who was a popular Twitter user and the founder of the lightning touch challenge which brought a lot of worldwide attention to the lightning network. Hodlnaut had participated in the #CraigWrightisafraud movement on Twitter, which called out and criticized Wright for claiming that he was Satoshi. After this, Coingeek a crypto news outlet that is supportive of BSV put out a $5,000 bounty for anyone who revealed the identity of Hodlnaut and also demanded an apology from him or her. The article put out by Coingeek also included alleged pictures of Hodlnaut and information that might lead to his or her location.
On Wright’s part, he had threatened to sue major crypto players such as Ethereum creator Vitalik Buterin for speaking out against his claim of being Satoshi.
Up until this time, all the talk about Wright being Satoshi have been mostly internet back-and-forth, but these two events showed just how serious it had become and set into motion the actions that would cause the downfall of BSV. First, Changpeng Zhao, the CEO of Binance, threatened on April 12, 2019, that he would delist bitcoin SV from Binance if Craig continued with his antics.
True to his word, it was announced on April 15 that Binance would be delisting bitcoin SV from their platform. This was a significant move because Binance is one of the most powerful firms in crypto and as soon as this was announced, others followed suit such as Kraken, Shapeshift, SBI and so on.
Following the delisting, BSV saw a significant decline in its price, falling from its April peak of $90.30 to below $54.55 towards the end of the month.
This was coupled with a declining miner revenue and the fact that it will undergo a halving next year, which would negatively affect its security level.
BSV and broader community outrage
Because it goes against the grain of many mainstream financial institutions, Crypto has always been a community effort and as such, there are many beloved figures who are protected by the community. Wright had, for a long time, been claiming to be Satoshi and it had become a bit of a joke within the industry.
However, the turning point came when he threatened Hodlnaut and Vitalik Buterin, who are two of the most popular figures in crypto. Before, the community laughed but now, they responded harshly and once Binance took the bold step to delist BSV, others followed.
While the future of BSV is uncertain, as of now, it does serve as a brutal lesson in what happens when a passionate community comes together.