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One key difference with Bitcoin is that, unlike Bitcoin, Ethereum has an account based architecture. In other words, you have an account that is credited or deb

One key difference with Bitcoin is that, unlike Bitcoin, Ethereum has an account based architecture. In other words, you have an account that is credited or debited, and you then have a current balance for that account. If you need to get your balance or send ether, you just look up a single number. Bitcoin on the other hand uses an "Unspent Transaction Output" architecture. Basically your balance is made up of all of the credits and debits (inputs and outputs) you've made with that account. So sending bitcoins requires referencing "unspent outputs".. which may be lots and lots of different transactions. That's one difference, and there are others, such as the time taken to confirm blocks (current block time on ethereum is 16s). But there are still lots of scalability issues to be addressed, which are actively being worked on. Vitalik Buterin has a great couple of posts on some of the issues: https://blog.ethereum.org/2014/09/17/scalability-part-1-building-top/ https://blog.ethereum.org/2014/09/17/scalability-part-1-buil... edit: Not sure why this was getting downvoted. Just to clarify, in case it seemed like I wasn't answering the parent. The points above are one of the ways in which "every operation must be verified by every node" is less costly on Ethereum. Obviously if it takes less compute time per transaction, you can scale to larger numbers of transactions per second. Ethereum has already passed Bitcoin in this regard, and has hit at least 8 transactions per seconds at one point, while Bitcoin's ceiling is 7 transactions per second. In addition, prior to launch I believe they managed to push the test network up to 25 transactions per second.

Anonobread 11y ago
But Ethereum's raison d'etre is "X for the blockchain". VISA does 56,000 tps. So it's really simple. How are you going to hit 56,000 tps on the blockchain. The Bitcoin community, which is far bigger and generally more experienced than Ethereum's just spent 18 months vigorously debating this question. Do you suggest Ethereum has come up with a better answer? And the criticism here is around the selling point of Ethereum: "everything goes on the blockchain". You're telling me after 18 months of debate, the best you've got to say about that is: "an account based architecture"? What is it about widgets fully encapsulated in a blockchain-native smart contract on Ethereum that makes it so much more scaleable than a similar widget on Bitcoin's blockchain?
- simondlr 11y ago
  There are several things Ethereum does currently that's better for scaling. 1) It produces blocks every 17 seconds. It can do this without neglecting security, because orphan blocks count as uncles and are included in the security of the whole network. 2) It has a scalable/dynamic blocksize. The miners can scale the gas limit up or down by a certain amount. If the current gas limit (pi million) gets hit, miners can start increasing it. 3) Tx fees purpose is primarily for DDOS protection & solving the halting problem with turing-complete scripts. It's not a fundamental element for security, because the issuance rate is constant. This means that a "fee market" doesn't need to exist as much as in Bitcoin, in order to make sure the blockchain remains alive. It has an infinite, but predictable supply, rather than finite. 4) Future scalability improvements include Casper PoS, which will decrease block time to around 1 - 4 seconds & sharding, which will remove the need for every node to process every part of the transaction space. These additions will mean that for the current period, transactions will increase, and perhaps lead to more centralization as not many will run nodes to keep the whole state. This is a trade-off in return for running more transactions.
  - Anonobread 11y ago
    What block size for Ethereum's blockchain would be required to hit 56,000 tps? I'm really getting some deja vu in having to write this out for the millionth time in a 18 month period. None of your talking points magically address the extreme costs of prerequisite physical infrastructure needed to hit 56,000 tps. Bottom line, it's impossible to match the throughput capacity of just a single credit card company on any blockchain, be it Bitcoin or Ethereum or BBQCoin, without incurring enormous costs in terms of CPU and bandwidth. This is to say nothing of doing decentralized exchanges, order matching, and option contracts - all of which Ethereum has been advertised as doing on a blockchain. For that you'd need hundreds of thousands of tps.
    - brighton36 11y ago
      Thank-you for writing this for the umpteenth time. I write these same points myself, constantly, as well. Most of the people in the ethereum project are delusional teenagers looking to get rich quick.
pmarreck 11y ago
> Ethereum has an account based architecture. In other words, you have an account that is credited or debited, and you then have a current balance for that account How is that different from a Bitcoin wallet address aka public/private key combo?
spaceman77 11y ago
Some people downvote what they don't understand or agree with. I only downvote abusive comments and spam. As for Ethereum I have a lot of work understanding how the whole thing works. I sense there is a lot of promise and potential there. However like the internet when it was emerging, I suspect the Ethereum project will probably be attacked without thoughtful discussion.

Anonobread 11y ago

But Ethereum's raison d'etre is "X for the blockchain". VISA does 56,000 tps. So it's really simple. How are you going to hit 56,000 tps on the blockchain. The Bitcoin community, which is far bigger and generally more experienced than Ethereum's just spent 18 months vigorously debating this question. Do you suggest Ethereum has come up with a better answer? And the criticism here is around the selling point of Ethereum: "everything goes on the blockchain". You're telling me after 18 months of debate, the best you've got to say about that is: "an account based architecture"? What is it about widgets fully encapsulated in a blockchain-native smart contract on Ethereum that makes it so much more scaleable than a similar widget on Bitcoin's blockchain?

simondlr 11y ago
There are several things Ethereum does currently that's better for scaling. 1) It produces blocks every 17 seconds. It can do this without neglecting security, because orphan blocks count as uncles and are included in the security of the whole network. 2) It has a scalable/dynamic blocksize. The miners can scale the gas limit up or down by a certain amount. If the current gas limit (pi million) gets hit, miners can start increasing it. 3) Tx fees purpose is primarily for DDOS protection & solving the halting problem with turing-complete scripts. It's not a fundamental element for security, because the issuance rate is constant. This means that a "fee market" doesn't need to exist as much as in Bitcoin, in order to make sure the blockchain remains alive. It has an infinite, but predictable supply, rather than finite. 4) Future scalability improvements include Casper PoS, which will decrease block time to around 1 - 4 seconds & sharding, which will remove the need for every node to process every part of the transaction space. These additions will mean that for the current period, transactions will increase, and perhaps lead to more centralization as not many will run nodes to keep the whole state. This is a trade-off in return for running more transactions.
- Anonobread 11y ago
  What block size for Ethereum's blockchain would be required to hit 56,000 tps? I'm really getting some deja vu in having to write this out for the millionth time in a 18 month period. None of your talking points magically address the extreme costs of prerequisite physical infrastructure needed to hit 56,000 tps. Bottom line, it's impossible to match the throughput capacity of just a single credit card company on any blockchain, be it Bitcoin or Ethereum or BBQCoin, without incurring enormous costs in terms of CPU and bandwidth. This is to say nothing of doing decentralized exchanges, order matching, and option contracts - all of which Ethereum has been advertised as doing on a blockchain. For that you'd need hundreds of thousands of tps.
  - brighton36 11y ago
    Thank-you for writing this for the umpteenth time. I write these same points myself, constantly, as well. Most of the people in the ethereum project are delusional teenagers looking to get rich quick.

pmarreck 11y ago

> Ethereum has an account based architecture. In other words, you have an account that is credited or debited, and you then have a current balance for that account How is that different from a Bitcoin wallet address aka public/private key combo?

spaceman77 11y ago

Some people downvote what they don't understand or agree with. I only downvote abusive comments and spam. As for Ethereum I have a lot of work understanding how the whole thing works. I sense there is a lot of promise and potential there. However like the internet when it was emerging, I suspect the Ethereum project will probably be attacked without thoughtful discussion.