3 ms·

One key difference is Ethereum is not being built only for writing code for monetary transactions using Ether. Ethereum is being built to store and run code in

by daoland 10y ago

One key difference is Ethereum is not being built only for writing code for monetary transactions using Ether. Ethereum is being built to store and run code in the EVM. Ether main use is only to pay for gas so that any user of the network can execute the code. Although in Bitcoin there is no point in writing code other than encode conditions upon which monetary transfers can be done, this isn't Etheruem's main goal. An example of a non-monetary use case is - A concert ticket issuer could issue tickets on the Ethereum network. When users want to resell, they need not rely on a re-seller and instead can do a direct exchange on a decentralized exchange. They will pay a few cents worth of Ether as fees to run code that triggers this exchange to get the guarantee that the tickets are not counterfeit. After a quick confirmation the ownership of the tickets is updated on the blockchain. The exchange of money between these users can be in USD itself directly without any conversions to Ether. It is non-monetary consumer use cases like these that drives the Ethereum team to bring the transaction confirmation times to the current 15 seconds and even lower in the near future.

DennisP 10y ago
In practice I wouldn't say that's ether's main use. If you add up the total gas fees so far, it'll probably amount to less than the $150 million in ether raised for TheDAO, the $5.5 million raised for Digix, etc. And if you look at the code samples on ethereum.org, one is for a crowdfunding app that raises funds in ether. And of course, if you're paying miners with ether, then ether better be a functioning currency or it's a worthless payment. You're certainly right that Ethereum has lots of uses beyond simple value transfer, but if you want to transfer USD instead of ether, you need to trust someone to back tokens with USD, and trust governments not to shut them down over KYC issues.
- daoland 10y ago
  The devs are so badass, they constantly mention that they will allow miners to accept any currency for gas fees if it is feasible. Most of us who have some Ether are comfortable with this move too, ironically our hedge for this scenario is to hold some Bitcoin. Because, Ethereum will prosper not when Ether has a high market cap, only if it can become robust enough to provide a decentralized platform to run code for a variety of apps and services.
  - DennisP 10y ago
    True but they're not planning for currency-agnostic fees before they move to proof of stake, which will require ether for staking. It might not be a done deal, either. A few weeks ago Vlad Zamfir, the lead researcher for PoS, tweeted that he thought agnostic fees were a dumb idea, because they'd be too much trouble for miners. A lot of contracts are easier to write if you assume a single currency. If you're doing that you have to pick one, and ether seems like the obvious choice. I mostly agree with your last sentence but a high market cap doesn't reduce Ethereum's robustness either; in fact it makes it more secure.
nemild 10y ago
You're absolutely right - I should have called that out more. Ethereum can be used to represent the ownership of any item (property title, ticket, claim for fiat currency). Some will inject a third-party you need to trust (a custodian who holds dollars), while others may not (the digital ticket as @daoland highlights). You can also define ownership broadly, where it might be as simple as the "ownership" (right) to vote (e.g., corporate governance decision, poll, etc). While it's not the primary use today, I could see tradeable tokens to represent various real world rights (to land, to tickets, to voting) being an area for much further experimentation. I do think there's a question if confirmation times need to be low on the blockchain itself (with its attendant risks) - as Lightning in Bitcoin shows an example where this is injected on top. This really is a broader debate about what should live at the lowest layers of a blockchain stack and what should be higher up (disclosure, I specialized in networking, and so see some parallels to the debates in the early years of the networking stack). Another interesting area for exploration is what should live on the blockchain, and what should live off, given the cost of blockchain storage.

by daoland 10y ago

DennisP 10y ago

In practice I wouldn't say that's ether's main use. If you add up the total gas fees so far, it'll probably amount to less than the $150 million in ether raised for TheDAO, the $5.5 million raised for Digix, etc. And if you look at the code samples on ethereum.org, one is for a crowdfunding app that raises funds in ether. And of course, if you're paying miners with ether, then ether better be a functioning currency or it's a worthless payment. You're certainly right that Ethereum has lots of uses beyond simple value transfer, but if you want to transfer USD instead of ether, you need to trust someone to back tokens with USD, and trust governments not to shut them down over KYC issues.

daoland 10y ago
The devs are so badass, they constantly mention that they will allow miners to accept any currency for gas fees if it is feasible. Most of us who have some Ether are comfortable with this move too, ironically our hedge for this scenario is to hold some Bitcoin. Because, Ethereum will prosper not when Ether has a high market cap, only if it can become robust enough to provide a decentralized platform to run code for a variety of apps and services.
- DennisP 10y ago
  True but they're not planning for currency-agnostic fees before they move to proof of stake, which will require ether for staking. It might not be a done deal, either. A few weeks ago Vlad Zamfir, the lead researcher for PoS, tweeted that he thought agnostic fees were a dumb idea, because they'd be too much trouble for miners. A lot of contracts are easier to write if you assume a single currency. If you're doing that you have to pick one, and ether seems like the obvious choice. I mostly agree with your last sentence but a high market cap doesn't reduce Ethereum's robustness either; in fact it makes it more secure.

nemild 10y ago

You're absolutely right - I should have called that out more. Ethereum can be used to represent the ownership of any item (property title, ticket, claim for fiat currency). Some will inject a third-party you need to trust (a custodian who holds dollars), while others may not (the digital ticket as @daoland highlights). You can also define ownership broadly, where it might be as simple as the "ownership" (right) to vote (e.g., corporate governance decision, poll, etc). While it's not the primary use today, I could see tradeable tokens to represent various real world rights (to land, to tickets, to voting) being an area for much further experimentation. I do think there's a question if confirmation times need to be low on the blockchain itself (with its attendant risks) - as Lightning in Bitcoin shows an example where this is injected on top. This really is a broader debate about what should live at the lowest layers of a blockchain stack and what should be higher up (disclosure, I specialized in networking, and so see some parallels to the debates in the early years of the networking stack). Another interesting area for exploration is what should live on the blockchain, and what should live off, given the cost of blockchain storage.