Following the recent Bitcoin Cash hard fork, a number of platforms in the blockchain and cryptocrrency space have come under fire for coming out in support of Bitcoin SV. And one of the questions these companies are being asked is, why support Bitcoin SV?
For Ryan X. Charles, CEO of Money Button, the answer is simple: “I like the original protocol. [Bitcoin] SV is closest to that.”
Money Button recently published a blog post explaining why the company has chosen to side with Bitcoin SV, and it boiled down to three things: Bitcoin SV is the closest blockchain to the original protocol, it is committed to keeping the base protocol in place, and it understands the need to scale.
Charles also posted a YouTube video in which he explained the company’s position further, while also shooting down accusations that he’s siding with nChain, the development team behind Bitcoin SV, because the firm is Yours Inc.’s largest investor.
“Bitmain is actually the largest investor, so when people say I’m funded by nChain and they say that’s why I’m saying what I’m saying, it’s actually the exact opposite—that the largest investor is actually on the other side,” Charles clarified in the video.
As someone who has been working full time with Bitcoin since 2013, Charles said he likes “the idea of bringing economic freedom to everyone, and Bitcoin solved that correctly.” To do that at scale, however, the network needs to get rid of limits and ensure that the protocol is “set in stone.”
“Something that I think the nChain and CoinGeek side understand that seems to have been glossed over on the ABC side is the desperate urgent need to scale right now,” he explained. “We can’t just take this slowly. You can’t just wait for adoption and then scale. We need to be 100% focused on both of these things simultaneously. We need to bring the cryptocurrency to new markets entirely, and we need to, at the same time, prepare for the volume that’s going to happen.”
Read the full transcript of Ryan X. Charles’s “Why I Choose SV” video below. You can also catch him at the CoinGeek Week Conference on November 28-30 in London, where he will discuss how Money Button will bring easy payments for everybody, everywhere.
WHY I CHOOSE SV
Ryan X. Charles, CEO, Money Button
So this video is for all the people, sort of primarily on my Twitter feed and YouTube channel who are impartial under these circumstances and just want to understand my decision to decide to go with SV [Satoshi Vision], which was going to seem very unusual to a lot of people, so I’m just going to explain the best I can the reason here.
First of all, my company, I’ve said this before, Yours Inc., we’ve raised money from Bitmain and nChain and I finally revealed that the quantities because it just seemed relevant, because people keep bringing it up. It’s $1 million from Bitmain, $500K from nChain and then a number of other investors in earlier smaller rounds, so it’s something maybe like $1.7 million or thereabouts total. Bitmain is actually the largest investor, so when people say I’m funded by nChain and they say that’s why I’m saying what I’m saying, it’s actually the exact opposite—that the largest investor is actually on the other side.
And I’m saying all these things, everything I’ve ever said that’s favorable to nChain actually comes at risk to me. Not only am I getting money from this, I’m risking making an enemy of Bitmain which would obviously be really bad because first of all, I like Bitmain and the thought of being enemy with them is just a horrible idea but also obviously if they were genuinely an enemy I wouldn’t stand a chance. So I don’t want to be enemies with Bitmain, but I’m in a mega weird situation where first of all I have friends on both sides, I have people that I like on both sides and then investors on both sides, and they’re just in a literal war where there’s no physical violence but they are attacking each other with computers. I mean, this is like out of a science fiction movie or something, right?
How weird is this? What am I supposed to do in this situation? All I can do is, the reality of the corporate structure of Yours Inc. is, I’m the CEO, I’m the board, I have to make the best decision that I can in these unusual circumstances. That’s the situation. It’s weird as hell.
I tried everything I could to prevent a split. I even went so far as to invent a new procedure that I’ve never heard of before called the Anti-Split Procedure, which is the idea of relying on the unified transaction history between both chains. If we had had greater ecosystem adoption, I think this is workable; however, the major players particularly Bitcoin.com went in the opposite direction and promoted a split. They split their coins in their services, not in the wallet but in the services, which all but assures that the split coin will ripple off throughout the ecosystem because the way that you merge UTXOs together, eventually all the coins become split.
It’s just fighting an uphill battle, and it’s difficult to maintain that, but I did try and I think it’s fair to say that I did everything in my power. I mean, I literally figured out a way to do it that would be helpful to wallets to not have to decide, and then I even wrote actually the software myself for this particular thing, and then spread the word about it as well. There were some other apps out there that did the same way, but ultimately, basically it’s clear that there’s two coexisting chains right now and the reality is not enough people supported the Anti-Split Procedure. The reality is that there’s a split, and the exchanges are starting to list ABC as Bitcoin Cash [BCH] and that means the other chain is probably going to be listed as different cryptocurrency because you can split them, and that’s probably what the exchanges are going to do. They’re probably going to just split their coins and trade them both separately—it’s almost certain that’s what’s going to happen.
From the perspective of Money Button and Yours.org, it is not a good idea to have multiple of these things. None of the user experience stuff that we’ve done accounts for having more than one. We’re not going to do more than one, it’s a distraction, it makes it harder, the UX is worse. We have to pick whichever one is the best one that’s most likely to work long term. And I believe that’s SV.
Let me try and explain the reasoning behind SV in particular.
First of all, my personal story is that I discovered Bitcoin in 2011 and I became obsessed with it back then. Eventually went full time Bitcoin in 2013, I’ve been full time since then.
The first reason is simply just the idea that this is the closest thing we have to the original protocol, and I don’t believe there is anything wrong with the original protocol. The more I’ve learned about Bitcoin over time and worked through every possible scenario, I’m convinced the original protocol will work at scale.
When I say the original protocol, I’m not talking about the original code. I think people get this wrong. There’s an article, sorry not an article, a video from Ed Dash, I think you’re right on a lot of points but think it’s a mistake to think of the original code as the being what’s important, it’s not the code. The code could be different, it’s the original economic protocol. It’s the ideas like someone signs a transaction and gives it to the other person, peer to peer, and it’s the idea that the person that receives it actually gives it to miners who then validate it and confirm it into a block and that there are no double spends in blocks, and you have other properties like a total of 21 million and the inflation schedule that gets cut in half every four years, and that miners get their subsidy as well as transaction fees, and you also have transactions have inputs and outputs. It can have more than one input, it can have more than one output, and that inputs and outputs contain script and that script is a language that although lacking in loops, actually has the ability to compute any number. You just have to have a longer script so you can unroll loops and script, and you can do smart contracts that are actually involved in the computation of anything you could possibly want to compute inside script.
That is basically Bitcoin, that and the fact that the miners expend energy in a way that is provable, that all they did was spend energy just to find the block. You can look at all these things in a purely economic way separate from the software and cryptography.
Anyway, I just like Bitcoin. I like the idea of sound money for the entire world and there is nothing wrong with the original protocol. It will work at scale. What we need to do is we need to focus on removing the limits. That’s the only thing we need to focus on. Get rid of the limits. This is an engineering challenge first and foremost, and it’s an economic challenge second.
Engineering challenge is basically getting rid of the… factors that occur when you remove limits. The economic challenge is over time, some of these components of the system will actually be operated by businesses that earn money for doing these things and that you transact with them using smart contracts. I believe ultimately you can do things like even pay someone to validate transactions for you and you actually use Bitcoin to do it. That you pay with Bitcoin and you use contracts on Bitcoin where if they validate correctly, you pay them. Basically, once you have Bitcoin itself, all of the other problems that you need to solve in the economy can be solved with Bitcoin.
I like the idea of sound money. I like the idea of bringing economic freedom to everyone, and Bitcoin solved that correctly. I like the idea of the original protocol. SV is closest to that.
I think Satoshi’s original design was correct in a number of ways. I think it was correct about scaling. I think it does scale by increasing the maximum block size and having it market for providing all the services of the blockchain itself. Miners are the most obvious thing because they earn money from mining, but you can also have validators and other things, wallets, people that provide SPV services could earn money for providing that service. Smart contracts, I mentioned.
Another one is law. So something I didn’t think much about until recently, until Craig started making a big deal about it is law. It is true actually that, although I wouldn’t have been to invent Bitcoin, I can now see in hindsight given everything that’s happened is that Bitcoin is actually legal basically everywhere. And this is an important property, it’s really important to not change that.
Bitcoin itself is actually not libertarian; it is compatible with libertarianism. But it’s also compatible with stateism. I don’t think that it’s intrinsically libertarian. Libertarians like it because it’s useful to them. It’s not state-based money so libertarians like that. It’s sound money on the internet that can be used by libertarians but it can be used by everybody. A disturbing fact about Bitcoin at scale is that if nation states start using Bitcoin, they will actually start forcing people to use it which means it’s not voluntary anymore. So it’s not about being libertarian, it’s about being compatible with the law and not being illegal. It’s compatible with libertarian and stateism, right. That’s important.
The idea of not changing the protocol is really music to my ears. That the protocol is going to be set in stone means that, Oh my gosh, I’m freed from the burden from having to worry about that. If I know that all we’re going to do is get rid of the limits, I know what’s going to happen in the future and I know exactly where to concentrate on and focus on. As someone trying to simply build on this technology, and if you know my story, I mean I’ve been building on Bitcoin for a long time and it’s been problem after problem after problem. The biggest challenge was simply grappling with this payment channel stuff we’re trying to do and gradually realizing that the whole thing was just not going to work. I mean, it’s unworkable and we had to abandon all that work. I’m really sick of building on shaky foundations.
If you count SV as a new cryptocurrency, it is the fourth cryptocurrency that my company has been on. We are looking around for something that just effing works and doesn’t get changed up all the time, something we can rely on and continues to have the properties that we need for the products that we’re building. So it’s music to my ears that the SV protocol is completely focused on being set in stone and removing limits. That’s perfect.
The urgency of scaling. Something that I think the nChain and CoinGeek side understand that seems to have been glossed over on the ABC side is the desperate, urgent need to scale right now. We can’t just take this slowly. You can’t just wait for adoption and then scale. We need to be 100% focused on both of these things simultaneously. We need to bring the cryptocurrency to new markets entirely, and we need to, at the same time, prepare for the volume that’s going to happen. And this is again primarily an engineering challenge of being able to simply scale the software, but it can be done. It’s really fundamentally a matter of paralyzing stuff which doesn’t require any protocol changes at all in order to that.
So the urgency of scaling. And the reason why this matters is just because the subsidy and the blocks declines by half every four years. There’s another decline, I think it’s going to be in something in approximately a year from now. It’s going to decline in half again, and it keeps declining every four years. And the only way the miners get paid in the future is with transaction fees, and we really need to radically increase the transaction volume to make sure that the miners are being paid. And we need apps that do a lot of transactions and pay the miners with each transaction. This is urgent because if this doesn’t happen, eventually it just basically means the mining power on the network will become inferior to something that actually does work. It’s quite urgent and we really need to do it right now or the inflation schedule will just going to remove enough value from the miners and they won’t be earning enough money to secure the changing world.
This is something the SV side appreciates and that’s why they’re pushing for larger blocks, and there’s no security problem here. You guys keep saying that there’s security problem because you want to attack them but there isn’t actually any problem with the raising limits to 128MB right now.
The patents from nChain. nChain does have a lot of patents and they’re creating more patents. It seems like a bad idea to fight them so that would be a cost for me like if I were on the other side instead of, you know, being collaborative with them on these stuff that they’d be like, suing me for patent infringement on the other side. That’s just the reality of the situation that if I were to pick ABC I have to worry about that, and I have to worry about that a whole lot less if I’m friends with them and I’m on their chain.
Another thing is that the battle is not over. I believe Craig and Calvin have a huge amount of BTC, not just BCH but BTC, and this is extremely useful in this situation to manipulate mining prizes and they can leverage this to help them win. This might take a while, but there are lots of other things they can do too, the patents and whatever else. They can do a bunch of things to win this still and to become the longest chain, and I just don’t think we’ve seen the start of this. Well, we’ve seen the start but I just think that we’re nowhere near done.
So that the overview of all the reasons. I want to give a few pieces of, I’m trying to create constructive criticism for ABC. First piece of constructive criticism is, I’m not sure I understand your mission statement. I think you guys, you say things like sound digital money for the entire world. In my opinion, the way this looks is that you guys didn’t actually rally around the idea of sound digital money for the entire world. No one actually really cared about CTOR and CDS and the clean stack rule.
What you guys actually rallied around was booting Craig Wright from the community. You actually decided to agree to these unusual changes that not everyone really agreed to, but you agreed to them anyway because you realized that this was a way to actually extract Craig. If I were you guys, I’d want to clarify the mission statement and make sure that your actions are consistent with whatever that mission statement is, and I’d be worried about like basically, you need to make sure that you aren’t perceived as being the anti-Craig Wright chain. Because it looks to me like that’s what you are. That’s the defining quality of ABC. Come up with a mission statement; it might be the same mission statement that you already have, but you need to find a way to pitch it so that it’s consistent with all of your actions.
Another one is governance. Who decides protocol rules? It’s actually unclear to me what you guys think about at this point. The checkpoint thing, if you just think this through, if you find that you’ll keep adding checkpoints, what’s actually happening is you have to have some other governance mechanism to create the checkpoints. What is that?
If you keep adding them, you may as well not have Proof of Work. It’ll be very interesting if you keep adding them or if you don’t add them. Yes, I know that Satoshi added checkpoints. I mean, the circumstances were quite different. I don’t think it’s fair to say that’s the exact same thing. It’s not exactly the same.
The circumstances here are very different. You wanted to make sure if there is a longer, basically if the other side won the hash battle, that you won anyway. I don’t think that’s compatible with Nakamoto Consensus and you can see it in Andreas Brekken’s comments that he felt guilty about it. He felt guilty because everybody knows that this is, you did something kind of sly there. This is a bit outside of the way the rules are supposed to work. With that being said, I advocate you guys do every moral and legal tactic you can to win, and whether that’s moral or legal is a different question but you guys do what you think is best.
I’d be worried about being perceived as “split culture.” This is the second time the Bitcoin Cash community has split, and it’s going to look like you guys favor the idea that basically whenever you disagree with someone you split off. That’s just incompatible with world money. If you try to pitch the world money thing as your philosophy, this is an example of something where your actions really need to match your statements, or you’re just not going to succeed. You can’t keep splitting. This better be the last split for ABC, or what’s going to happen? You’re splitting off like amoebas that gets smaller and smaller and smaller. There’s a story about, you know, farmers where in a poor area where the farmers are forced to divide their land to give it to their sons, and then each generation divides it further and further and further until they get poorer and poorer and poorer, until they’re just in poverty.
You can’t keep doing this. The value goes is in squared with money, value as in utility. You can’t keep splitting forever. I’d be very worried about being perceived as split culture and I would want to counter that narrative.
That’s all I have to say about that. These are all pieces, this is just how I see it and I would say if I were you guys, I would want to address every single one of those points and make sure that you have strong mission statement, a clear stance on governance, and that you avoid being perceived as being split culture. And that you aren’t split culture, that you stop splitting.
Based on everything that’s happening right now, it seems very likely the ABC chain will be referred to as Bitcoin BCH on the exchanges, and the SV chain will probably be perceived as a split chain that will have some separate value that is also listed on the exchanges. In other words, it’s splitting. That’s just the reality of what’s happening right now.
I personally don’t care about the name. I look at it like what we’re really trying to do here is create Bitcoin at scale, and we’re just going to call it Bitcoin when that happens. But for right now, it doesn’t matter. Because the customers that we’re looking for, they were trying to solve problems for real people here. They don’t care what the name is, and we already changed the name once, Bitcoin to Bitcoin Cash. I don’t care what this one’s called, it’s probably going to end up being called either Bitcoin SV or Bitcoin BSV, I don’t really care. It is what it is on that point.
Comment about Jihan [Wu]. We raised money from Bitmain and Jihan if you watch this video, the last thing in the world I want to do is make an enemy of Bitmain. I hope you can appreciate my situation that no matter what, which direction I go in here, I’m going to have a cost to myself and my company that I’m most certainly going to make enemies either way. I hope that you do not regard this as being like a backstabbing or something like that. I just have to pick a side right now out of pure pragmatism and I could be picking the wrong side, so please just don’t be angry and realize the way it looks from my perspective. I wish you guys the best of luck.
Certainly my goal is not to oppose BItmain, it’s more like that’s just the reality of the situation now. We got two competing cryptocurrencies and pretty much the exact same market. And I don’t see how we have a world of many of these things. I see a world of one.
Anyway, I don’t know what else to say about that. I regard Bitmain as one of the most incredible companies in the space, and JIhan you’re one of the most incredible entrepreneurs. I look up to you, I admire you, I respect you. I think you are a genius entrepreneur and I wish you talk more because I would love to hear more about what you have to say. Because I think you are someone that I could learn from. I look to you as a role model, but I just don’t have a choice in this situation. No matter which direction I go in, there are costs. And I have to pick the thing that I think is best. And I think Bitcoin SV is best, so I’m sorry.
Another comment is that SV might lose. I’m not picking this because I believe that SV is going to win, I’m not sure. I don’t really know what’s going to happen. I do know that I greatly value focus. Gosh, I really need to the ability to just focus right now. I need to not have to worry about hash battles, and I need to be able to worry about things that I’m actually trying to do like create value for my customers and make sure the product works and grow. And earn money, and have a real business. That’s what I’m trying to do right now.
I need to be able to focus and basically I have to pick a side because it’s just a losing battle staying down the middle. We got bugs in the software that we have to fix. The best way to fix it is to just pick a side. It’s just a losing battle for us to try to bridge these cryptocurrencies when obviously the two sides don’t see it that way and just are completely different, and it’s just not powerful enough to bridge them.
I’m actually very excited about being able to focus. This wasn’t my fault that it happened this way, I had nothing to do with it and I tried everything in my power to prevent a split. What we’re going to do now though is we just have to basically move forward.
I like the idea that actually by picking this path it actually answers some questions for us. For instance, right now Bitcoin SV does not have exchange support at all that I’m aware of, maybe Poloniex I guess. I don’t know if you can withdraw or deposit from anywhere. But this means the way we’re going to solve the onboarding problem is by empowering people to earn it. Just forget about the exchanges. We don’t actually need them. We’re going to work around them. We’re going to have people that use this and the exchanges will add it because they’re compelled to, because people actually use this thing. And they want to be able to trade it, and there’s going to be a market for that. So I look at it that way, that there’s a form of forced focus that just take options off the table for me and we’re going to work within the constraints that we have, and we’re going to solve problems that way.
That’s all I have to say. In a nutshell, I didn’t want a split to happen, I did everything in my power to prevent it and I now believe that it’s a win-lose situation. There are going to be people that lose, I don’t know who’s going to win, I don’t know who’s going to lose. There are ups and downs of this decision. I might be one that loses and this company might lose, and that’s just going to be outside of my control. Within the constraints I have, I’m going to make the best decisions I can and as a company, we’re going to move forward and create as much value as we can for our users in spite of this absurd situation.