Bitcoin

The Original Bitcoin Protocol: What Is It and Why Does It Matter?

June 08, 2021

The Original Bitcoin Protocol: What Is It and Why Does It Matter?

Synopsis
4 Minute Read

As Bitcoin creates waves, our team steps back to examine the origins of the cryptocurrency. Read our whitepaper preview and sign up to get the full report when it's made publicly available this summer.

Hash Qureshi
Hash Qureshi, CPA, CMA, CRISC, CISA, CISSP, CRMA, P.Eng., MSc, CGEIT
Partner

In the last 10 years, concepts like blockchain and digital currencies have moved from small online communities to being supported by some of the world’s largest firms. These concepts and ideas were best presented by Satoshi Nakamoto in the creation of Bitcoin. With the rise in popularity, and the different offerings, MNP found it necessary to investigate what Bitcoin implementation best fits Nakamoto’s original vision.

Satoshi Nakamoto’s whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System” sets the stage for our analysis. Nakamoto’s whitepaper, emails, forum posts, and original source code define the protocol — the rule set for Bitcoin as a data network — and the key elements that make Bitcoin a functional technology. Along with the whitepaper, we reviewed the publicly available emails, forum posts, and original code left by Nakamoto. We used these source materials to determine what Nakamoto’s original purpose for Bitcoin was – a global electronic cash system (that works peer-to-peer), while also laying the foundation for a network that can support more advanced data applications.

Using the sources mentioned above, we developed an assessment framework and related criteria assessing the relevance of the Bitcoin scripting language (including OpCodes incorporated in it), protocol elements, and capabilities in current implementations — Bitcoin SV (BSV) and Bitcoin Core (BTC) against Nakamoto’s original vision.

Our findings indicate that BSV is most representative of Nakamoto’s original intention and design for Bitcoin. One key factor is because the BSV blockchain demonstrates the ability to scale to support significant volumes of transactions in a timely manner for macro-payments and even micropayments, resulting from BSV’s “Genesis” hard fork in February 2020. This removed any arbitrary cap on block size and allows the BSV blockchain and transaction capacity to grow unbounded, while also removing state restrictions limits and improving the code base to allow for unbounded scaling. In addition, the Genesis hard fork restored key aspects of the original functionality of Bitcoin script, the programming language used within the Bitcoin protocol. In our whitepaper, we also identify what technology capabilities can be enabled once Nakamoto’s vision for Bitcoin has been fully realized.

A general outline of report is as follows:

  • The Bitcoin Whitepaper
  • Nakamoto’s known Forum Posts, Emails
  • The Original Bitcoin Protocol
    • Capabilities
    • Critical components
    • Non-functional requirements
    • Implementation attributes
  • Comparison of current Bitcoin implementations to Nakamoto’s original vision
  • Impact of Nakamoto’s vision once fully realized.

Join us virtually at the CoinGeek Zurich conference on June 9 where we will provide an overview of this important work. It’s free to register; the full conference is June 8-10 and conference information is available here.

The Original Bitcoin Protocol Whitepaper

In the last 10 years, concepts like blockchain and digital currencies have moved from small online communities to being supported by some of the world’s largest firms. With the rise in popularity, and the different offerings, MNP investigated the original vision for Bitcoin to understand where the industry is headed.

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