One of the most promising developments for Bitcoin adoption is the emergence of applications that give users access to the benefits of Bitcoin - without them having to understand the nuts and bolts that make the blockchain tick.
Bitcoin SV wallet, Centbee, is one such example, as the company's CEO, Lorien Gamaroff explains:
“You can now buy Bitcoin SV with cash or credit card across thousands of retail stores across South Africa. But it doesn’t end there. They (retail operators in the remotest of areas) might not even know they’re selling you Bitcoin; they think you’re just paying some voucher. But, meanwhile, you’re doing a transaction in Bitcoin.”
Making Bitcoin disappear behind the scenes is no accident. The Bitcoin SV developing community is dedicated to building an infrastructure that operates quietly behind the curtains to allow sleek business applications to play the leading part - front and centre.
At the same time, opponents of the Bitcoin SV (BSV) project periodically set out to befuddle and frighten the public by framing some of the more technical features of the Bitcoin protocol as ‘struggles’, ‘attacks’, ‘accidents’, or ‘BSV woes’.
And so, today’s article sets out to clarify a much misunderstood feature of Bitcoin’s design as retained in the BSV protocol: block reorgs and orphaned blocks.
In plain language, a block reorg event is a normal part of the Nakamoto Consensus mechanism that solves the double-spend problem of distributed systems.
For each new batch of transaction ordered, miners compete to solve an intricate computational problem, known as a ‘hash’. The first miner to find the correct solution and broadcast it to the network earns the right to record the latest batch of valid transactions to the blockchain. In return, they receive a block reward (a combination of transaction fees and newly minted Bitcoin).
There are also occasions where two different miners reach the finish line so close together, that the network is temporarily split on calling the tie. There are now two competing versions of the blockchain with slightly different endings. In these scenarios, the Nakamoto Consensus rule of “the longest valid chain is the official one” comes into effect. The nail-biting competition is usually settled as soon as the next hash is solved and recorded to either one of the competing chains making one longer than the other. And that settles it. The winning (longer) chain is retained as the official version of the blockchain and the losing chain is ‘orphaned’.
On rare occasions, two consecutive rounds of the competition end in a tie, in which case the third block becomes the tiebreaker.
There are also network update scenarios where Nakamoto Consensus is used to settle disputes. In the case of Bitcoin SV’s Quasar update on 24 July, the network’s overall hard cap was upscaled to 2 GB while the miners were allowed to choose their own hard cap. The majority of miners settled for a 512 MB block cap and would refuse to mine a larger block. At the same time, miners who had chosen a higher block cap could potentially find the hash first and submit a block bigger than 512 MB to the network.
Jimmy Nguyen, President of the Bitcoin Association, explains how Nakamoto Consensus would operate in this scenario.
Simply put: it doesn’t.
The concepts of ‘block reorgs’ and ‘orphaned blocks’ might sound scary, especially when you’ve come to rely on BSV as a payment method. You may even have come across media articles or social media comments hinting that BSV is ‘faulty’ or that users funds might be at risk when block reorgs occur.
Bitcoin SV developer, Steve Shadders assures that ‘block reorg bogeymen’ are nothing but an urban legend. In contrast, Shadders confirms that:
“We’ve all been told for ten years that orphans are bad and a security risk. But it’s simply not the case; it’s actually how Bitcoin is supposed to work.” Steve Shadders, Bitcoin SV developer
In summary: don’t be fooled by anti-BSV propaganda that spread FUD (Fear, Uncertainty and Doubt). The ‘terrible truth’ that BSV-trolls are trying to divert your attention away from is that Bitcoin SV is the only blockchain project following the original Bitcoin protocol and operating as Satoshi Nakamoto intended.