Jason C

Why Memo Supports BSV 2020-02-21

It's no secret there is animosity between the Bitcoin Cash (BCH) and Bitcoin SV (BSV) communities. After the chains split in November 2018 the Memo community was divided. Being neutral was not easy, with each side wanting me to drop support for the other side.

The Memo protocol runs on the blockchain. Prior to the BCH fork in August 2017, it would not have made sense for multiple reasons: 1) The BTC OP_RETURN size is limited to 80 bytes and 2) the fees on BTC are too high to make it practical. But once we had a chain with low fees and, eventually in May 2018, an increased OP_RETURN size, Memo became practical to run on the blockchain.

Digital currency opens a whole new world of technological possibilities for online commerce. They are definitely an improvement over the existing financial system for many reasons. But is that all digital currencies are, just an improvement in finances? As many people have already discovered, the blockchain has many more possibilities. A global timestamped database that anyone can pay to write to and read from can be used for much more than just financial services.

One major issue when purchasing things, especially on the internet, is trusting the seller. If I send them money, how do I know I will receive the product or service I am trying to purchase? Today we solve this problem with trusted intermediaries like Amazon, Stubhub, or E-Trade.

The pseudonymity of crypto currencies doesn’t immediately help with this problem. But if there is a built in identity system (i.e. the Memo protocol) then we can use that to build reputation between identities, increasing our trust in the seller based on their past reputation and/or mutual connections.

So, in my opinion, an identity system is a necessary component to unlock vastly improved commerce options with digital currency. You can already see this with the Memo token marketplace. There are still fake and scammy tokens for sale, but the identities of the sellers provide a significantly improved signal of their level of trust.

BCH and BSV split over relatively minor differences. Both chains still have low fees and are practical for Memo to run on them. Even as they’ve continued to diverge over time, the software logic used for the BCH and BSV versions of Memo are nearly the same.

I cannot predict the future and cannot say which chain will become the most popular in the long run. The overhead to maintain support for both chains is minimal compared to the total amount of work put into the Memo protocol and software. From a technical perspective, there’s little reason to not support both.

However, we live in a world beyond 1s and 0s. The technical details are not the only factors to take into account. When the BCH and BSV chains split, both communities had opinions about each other. Strong pressure was put on businesses and application developers to choose a side and drop support for the other.

As with any war, trying to stay neutral has consequences. By continuing to support both sides, neither side was happy. By January 2019, two months after the split, Memo usage on the BSV chain dropped more than 80% compared to pre-fork levels. The BCH chain wasn’t much better, with usage dropping more than 50%.

Even though there were few technical reasons to choose a side, there was a lot of pressure from users. The main Memo site, memo.cash, followed the greater proof of work coin, BCH, and a separate site, memo.sv, was created for BSV. The BSV community felt more betrayed and this was often cited as the reason for users leaving.

In the grand scheme of things, Memo usage is small and can still be classified as experimental. While losing these users is sad to see, it’s far from enough reason to go all-in on one chain.

Even though BCH is the greater proof of work chain and has more Memo activity, ironically they are the chain not focused on data-based use cases. The only other major data use case on BCH is SLP tokens, which is arguably an extension of the cash use case. The ABC development team has made it clear they do not think data apps belong on BCH. This is a major concern for Memo.

On the other hand, even though Memo activity on BSV has dropped to a trickle, it is the chain focused on data-based use cases. Since the chain split there are now tons of on-chain apps on BSV with daily transaction volume rivaling Ethereum.

BSV has some identity protocols, but I still think Memo is the best suited for tackling the trust in commerce issue explained earlier. The Memo software also has the only tokens I know of that are actively supported on the BSV chain. And the Memo decentralized token marketplace (DEX) is the only one that exists on either chain.

In summary, these are still the very early days and it’s impossible to predict what will happen. If people are so tribal they can’t handle an app supporting multiple chains, then so be it. I prefer a community of more open-minded individuals anyway.

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