BitcoinSoV is a spoon. Please read further.

You may have heard about the infamous cryptocurrency BitcoinSV (BSV), which is a contentious hardfork of BitcoinCash (BCH). BSV was created by Craig Wright who self-proclaims himself as Satoshi Nakamoto – the original creator of Bitcoin (BTC), meanwhile imposing a narrative that «BitcoinSV is Bitcoin.»

I personally do not believe in Craig Wright. There are many reasons for this, but I won’t be writing about that in this article.

BitcoinSV is not Bitcoin, and neither is BitcoinSoV (BSOV).

I want to tell you about BitcoinSoV (BSoV), or «Bitcoin Store-of-Value», because I don’t want there to be any misconceptions about it.

At first glance it could seem like BSoV is a contentious hardfork of BSV, but I can assure you – it is not. Unlike Bitcoin and its contentious hardforks – BSoV is a completely new token where most of the tokens are not yet distributed. It is only distributed by mining it.

BSoV is the first deflationary and mineable token.

What? That doesn’t sound so special. Well, here’s another statement:

Bitcoin is not deflationary.

Well, well, well. This is not fake news. Continue your reading, please.

Introducing the ERC918 token standard

BitcoinSoV is a PoW-mineable ERC918 token – a smart contract which is secured by the Ethereum blockchain. The ERC918 token standard was first used by 0xBitcoin, and allows for distribution of tokens through real computing power a.k.a Cryptocurrency mining.

Unchangeable token & immutable code

However, unlike other proof-of-work consensus models, the ERC918 standard does not allow for any consensus mechanism to decide which parameters or functions to implement. Just like other smart-contracts on Ethereum – the code is immutable, or at least proving to be extremely difficult and expensive to alter, since a code-change would require dominant hashing power over the Ethereum network.

Organic community interest

Since the BSoV token does not have a team, it still doesn’t lack engaged and active community members. They didn’t join in because they were promised free money with airdrops, and no one were incentivized to create duplicate accounts unlike other deflationary projects such as ETHplode which has over 100,000 members in their telegram chat, I suppose most of them are fake.

Why does BitcoinSoV contain «Bitcoin» in its name?

There are three reasons.

BSoV maximum supply is the same as Bitcoin. All BSoV tokens are distributed using proof-of-work mining, like Bitcoin. BSoV reflects the same disinflationary «halvings» of Bitcoin which occur about every 4th year.

Why does BitcoinSoV contain «Store-of-Value» in its name?

What makes BSoV unique to Bitcoin? Its deflationary attribute, where 1% of each transaction is destroyed forever – never to flow into circulation again. In the end, the total supply of BSoV will be less than 21 million. Whereas the original Bitcoin will end up with a constant total supply of 21 million coins which will be circulating forever.

This deflationary attribute of BSoV would be expected to have a reductive effect on token velocity, or in other words «the speed at which tokens circulate» as quoted from the first deflationary token experiment «Bomb Token», from which BSoV has taken its inspiration.

Basically, the asset holder is incentivized to hold, rather than transact. This mechanism; among others, is what makes BSoV more probable to be considered as a Store-of-Value. Though, getting there is extremely difficult.

Token Velocity

In an article at CoinDesk, Kyle Samani, a co-founder of Multicoin Capital wrote about the token velocity problem and concluded:

Velocity is one of the key levers that will influence long-term, non-speculative value. Most utility tokens don’t provide a compelling reason for token holders to hold the token for more than a few seconds. Absent speculation, assets with high velocity will struggle to maintain long-term price appreciation. Hence, protocol designers will be well served to incorporate mechanisms into their protocols that encourage holding, not just usage.

The inevitable scarcity and disincentivization of making transactions are some of the key features of BSoV. There has also been developed a smart contract where holders can voluntarily lock their funds for 180 days, to further incentivize holding, and reduce token velocity.