Bitcoin tradeoffs

Coin Geek

2 days ago

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Spend enough time in the blockchain world, and certain dogmas begin to sound like laws of physics. Everyone should be able to run their own node.
Initial sync times should be quick.
The more nodes, the better.
Your wallet should 'just work,' pulling balances from thin air the moment you enter your seed phrase.
Scratch beneath that elegant surface, though, and you'll find these assumptions are anything but universal truths. They're artifacts of a very specific set of trade-offs; decisions made years ago by a handful of developers on one branch of Bitcoin's family tree. And they've so thoroughly imprinted themselves on the industry that anything diverging from them looks like heresy.
Take the most famous of these: the belief that it's more important for poor people to run nodes than for poor people to transact.
The people who hijacked bitcoin sold this concept to the world: The poor must be able to validate the BTC payments of the rich, but only the rich can afford payments on the network.
Also, hijackers have custodial solutions available for the poor to make 2nd class payments.
BTC made that explicit bargain. Block sizes were throttled to an absurdly small 1 MB, which is roughly one low-resolution JPEG per block or seven transactions per second globally. So any hobbyist could download and validate the chain from a spare laptop.
But what was sacrificed?
Throughput. Utility. The very capacity of the network to handle global commerce.
In BTC, transaction fees spike whenever 'congestion' hits, making simple payments costly or even infeasible. But that was the deal: cheap nodes, expensive transactions. It locked Bitcoin into a model where only the well-heeled could rely on the network day-to-day, and everyone else could use some kind of custodial system or a vaporware L2 like Lightning Network.
These trade-offs, in my opinion, are profoundly regressive.
And once you accept that premise (that keeping nodes dirt cheap matters more than serving billions of transactions), you start building expectations around it. Wallets that simply derive a seed phrase, query a lightweight index, and instantly show balances only work because the UTXO set is tiny.
BSV deliberately challenges this.
When your ledger is designed to scale without artificial ceilings, the set of unspent outputs balloons. A wallet restoring from a mnemonic alone, without additional proof structures, starts to look quaint. For small blockers, they would argue that this is irresponsible.
Right but how will wallets work in the teranode ecosystem?
Because from my understanding and it was @ProjectBabbage who first brought this to my attention, that it's no longer possible to restore a wallet from just a private key alone.
The issue is that with massive blocks,… pic.twitter.com/PdGvYRmlqa — Eric Chennells (@EricChennells) July 5, 2025
That's why BSV wallets increasingly incorporate Merkle proofs alongside private keys, pinpointing funds directly with cryptographic receipts. It's an elegant solution if you can clear the mental hurdle that things shouldn't always work the way BTC taught us. Luckily, there is an official Wallet Toolbox, and lots of unofficial ways to store the UTXO set with Merkle proofs, and I foresee GorillaPool (and possibly other miners) offering UTXO sync and wallet restoration as a simple, paid service on the network.
You are completely correct, amd you are one of the very few people who actually have a very good understanding of this. You deserve a massive shoutout for being an informed participant in the network.The ridiculous thing is that your post was only seen by 23 people.
You MUST… https://t.co/MrmgLgKUSg — Babbage (@ProjectBabbage) July 6, 2025
Other Dogmas: Initial sync time and 'the' mempool
BTC folks boast that spinning up a full node should be quick. They can promise that because they capped the block size years ago. But if your network's goal is to become the data layer for global trade, finance, Internet of Things (IoT), and public records, that promise becomes a relic quickly.
On BSV, initial sync is naturally longer. That's not a flaw, thought. It's a market opportunity. I foresee companies like GorillaPool shipping a fully synced disk image at the latest block height. Need a new archival node? Pay a modest fee, spin up in hours, and join the network with minimal downtime. It's simply a commercial solution to a commercial-scale problem. Of course, cypherpunks who want to run a node on their wife's boyfriend's computer will be upset, but opportunity waits for no one!
Or consider the mempool: Bitcoin's dusty, dimly lit waiting room where your transaction sits, tapping its foot and checking its watch, awaiting the next block. In BTC, this feature is designed to create opportunities for 'important transactions' to bid higher for block space. Small blocks mean your payment often lingers in the mempool for hours, maybe days, until there's room to squeeze into a block. This is framed as decentralization at work, as the network politely queues your transaction in a traffic jam and calls it secure.
On BSV, this entire dynamic changes. The mempool is typically empty. Transactions flow straight through and settle as abundant block space swallows global throughput without congestion pricing.
And soon, even this concept will evolve. Under Teranode, the mempool itself starts to disappear. It's replaced by an unconfirmed transaction store inside a dedicated block assembly microservice. Nodes coordinate by exchanging massive subtrees of unconfirmed transactions, optimizing for speed, parallelization, and truly industrial-scale propagation. Instead of a dusty waiting room, it's more like an express terminal: transactions get batched, sorted, and pushed toward confirmation at a velocity that makes the mempool model look medieval.
Dogma, The Third: Muh node
Perhaps the most overlooked distortion is the notion that more nodes always means better decentralization. It's an easy sell at cocktail parties with Larry Fink and Jack Dorsey, but it's to the detriment of network health, and it's built on a false premise.
Small blockers believe miners should always be presumed malicious, so they believe they must have lots of non-mining 'nodes' with copies of the chain ready to fork away from the chain the miners run, which is a crazy premise.
So when BTC 'Muh Node' crowd says they will enforce the rule set that doesn't comply with the law, they're saying they will run a chain that isn't trading anywhere institutional anymore.
Miners will follow the legal chain, and NodeBros spend a year looking for the next block. — Kurt Wuckert Jr (@kurtwuckertjr) November 14, 2019
Furthermore, a blockchain's security doesn't magically improve by bloating its edge with thousands of underpowered nodes. In fact, managing propagation across countless low-bandwidth peers introduces fragility. BSV's approach (fewer, highly robust nodes operating as industrial data centers) emphasizes throughput and reliability. The trade-off? Fewer players are in the backbone, but a network is actually capable of supporting billions of daily transactions.
It's simply a different calculation of who the end user is. In BSV, it's not the node hobbyist; it's the merchant, the app developer, the billions of ordinary people paying for coffee, querying smart contracts, or timestamping invoices.
None of this is inherently more righteous. But it is honest.
BSV doesn't pretend that everyone must personally validate the entire chain for a payment system to be trustworthy. It leans on cryptographic proofs and competitive commercial services like the rest of our economy. You could argue that this restores Bitcoin to Satoshi's vision of a peer-to-peer cash system where trust is engineered through incentives, not socially policed by enthusiasts running Raspberry Pis.
But, there's always a but…
This all poses a thorny education challenge. People have been taught for 15 years that certain UX flows are normal because they grew from BTC's assumptions. Put in your seed phrase, and watch your coins appear. Fast sync times. Small chain, lightweight everything.
But that's only one vision. It was never the only one. And ironically, it's the version that scales the least. Under pressure, that UX fails the common user, too. It just doesn't happen very often because aside from the 2017 bull run and the 2023 Ordinals craze, BTC gets very little real use from real people, so the congestion doesn't get experienced by many.
In BSV, we will have to keep explaining why some wallets might ask you to track Merkle paths, why your node might take longer to sync, and why there's professional infrastructure where you expected hobbyist tinkering. These trade-offs aren't bugs. They're intentional, designed to support a network that can shoulder the world's economic data.
In a way, it's poetic. The same debates echo from Bitcoin's earliest days: how many nodes should there be? How big can blocks get? Who is this system for?
BTC's answers to those questions hardened dogma into gospel.
BSV simply dares to answer differently.
And as the world starts hunting for a data ledger that can carry actual commerce rather than speculative cycles, maybe we should reconsider who made the wiser bargain.
Time will tell.
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