Is Bitcoin SV More Efficient Than Bitcoin?

Efficiency has been a heavily-discussed topic in the blockchain space for some time. BSV promotes several elements which enable efficiency within the platform. BTC on the other hand, is enhanced by layer-2 applications which operate atop the network.

Payment transactions on BTC have been enabled by the Lightning Network (LN). LN enhances Bitcoin through micropayments and by allowing instant transactions at low costs and across blockchains. It should also be noted that there have been inconsistencies and defects identified with the platform according to some reports, one of the most recent by researchers at the University of Illinois in a paper published in August 2022.

Bitcoin SV and BTC have long been compared. BTC, represents the largest blockchain and digital asset ecosystem in the world. On the other hand, BSV states its claim as being the original Bitcoin network which preserves the vision and mission of Satioshi Nakamoto, the pseudonymous founder of Bitcoin.

What Makes A Blockchain Efficient?

With so much emphasis on Proof-of-stake (PoS) versus Proof-of-work (PoW) in the ongoing blockchain consensus algorithm debate, it is quite easy to mistakenly consider efficiency as being affected by network mining standards. The fact is, efficiency is more related to the ability of the network to process transactions in an efficient manner, not the standard.

While the mining standard does affect the carbon footprint of the network based on the energy utilised in the process, network efficiency hangs upon entirely different metrics.

How Does Efficiency Differ Between Bitcoin SV (BSV) and Bitcoin (BTC)?

Both Bitcoin SV and Bitcoin utilise PoW blockchain consensus mechanisms. In the model, miners join the networks and use powerful computing machines that are leveraged to solve complicated mathematical problems in a race for block rewards. The nature of how transactions are handled and processed in the block generation methodology is what reflects differences between the efficiency of each network.

The throughput, or power of the Bitcoin SV network is significantly higher, and therefore more efficient, than that of BTC. Bitcoin SV promotes lightning fast, instantaneous blockchain transactions. This is largely supported by larger block sizes enabled on BSV. Transactions on Bitcoin SV are processed with a max, 4 GB block size, compared to BTC, with 1 MB. The block size affects the amount of transactions included in each block. More transactions are able to be grouped in BSV blocks, while only a limited amount can be processed per BTC block.

The daily average block size for the BSV network is referenced as being between 25-286 MB according to the most recently available metrics, well under its maximum allowable capacity. Comparatively, BTC is noted as being under 1.5 MB for its daily average block size. Each blockchain has a network token associated with its platform. While each holds intrinsic value as tokens to reward miners, power applications and more, like all cryptocurrencies traded on the open market, BTC and BSV price is influenced by trading and associated market factors.

Greater Mining Efficiency After All

As a bonus, the larger data capacity subsequently means that miners on the BSV network are also more energy-efficient, which again, is a separate measurement altogether. This is because the same power emitted by BSV miners is able to be used in order to process more transactions simply because more network transactions can be added and into each block that is mined on-chain. This enables the referenced fast, instantaneous transactions of the BSV platform.

Which Network Processes More Transactions?

In a side-by-side comparison between BSV and BTC, it is made evident that a much larger number of transactions are processed on the BSV blockchain platform than BTC. It is estimated that around 260,000 transactions are processed on the BTC network per day, as compared to around 3.5 million on BSV.

To demonstrate the differences between the two more plainly, BTC is referenced as having the ability to process around 4.6 transactions per second (tps), versus close to 100,000 transactions per second on the BSV platform. This certainly helps to demonstrate the effect of larger block sizes and how they work to dramatically enhance the efficiency of the BSV blockchain.

What About Additional Data Processing?

BSV is noted for being able to enable data in its transactions. Data processing is supported by the presence of Script and Turing code, which empower the implementation of smart contracts within the network scheme. This makes the BSV network ideal not only for fast, instant transaction processing, but also for Bitcoin-enabled applications

Bitcoin-enabled applications provide organisations, businesses and individuals the ability to create data-dependent innovations such as decentralized gaming platforms, NFT (non-fungible token) ecosystems, and more. BTC is only able to achieve such functionality with layer-2 applications which are needed to scale the underlying platform.

Summary And Conclusion

Efficiency remains a hot topic in the blockchain industry. Now that the elements which go into network efficiency have been carefully disclosed, it seems BSV greatly outdoes the BTC network in the area of true network efficiency. With immensely larger block sizes that work to enhance transaction capacities and the throughput of the network, BSV presents as a clear example of the type of efficiency sought in today's ever-increasing blockchain-integrated global business and social environments.

Not only is the efficiency greater, but in the area of blockchain mining, BSV has been measured as using only 765.31 PH/s (Peta Hash per second) of power in its network mining model, compared to BTC's 136,270 PH/s. While the mining standard does not reflect the efficiency and throughput, the superior throughput of BSV enables such efficiency to be captured in the mining standard as well.