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I'm curious how others on HN feel: I think Bitcoin is an evolutionary dead-end and the future is Ethereum. Ethereum is more powerful and allows more development

I'm curious how others on HN feel: I think Bitcoin is an evolutionary dead-end and the future is Ethereum. Ethereum is more powerful and allows more development on top of it than Bitcoin. I think Bitcoin still holds sway because it was first, but I think Ethereum has a brighter future. Anyone have a good rebuttal, or am I on the mark?

deweller 10y ago
Ethereum is an incredibly ambitious and exciting project. I really want Ethereum to succeed, and it probably will. But it is easy to underestimate the widespread adoption and trust in Bitcoin. Bitcoin will always be the standard cryptocurrency store of value. There may end up being 10 other globally useful blockchains, but they will all use Bitcoin as their base store of value and medium of value exchange.
- brilliantcode 10y ago
  It's already abandoned. There's no major players adopting it.
  - brilliantcode 10y ago
    feel free to prove me wrong by posting ethereum adoption by Fortune 500 instead of downvoting.
    - DennisP 10y ago
      I don't have much handy right now, but after this Enterprise Ethereum launch event on Monday there might be more information available: https://www.eventbrite.com/e/enterprise-ethereum-alliance-launch-tickets-31647140449 https://www.eventbrite.com/e/enterprise-ethereum-alliance-la...
UweSchmidt 10y ago
After the DAO debacle the Ethereum story is dead to me: - it is not feasible to write or verify safe "smart contracts" without having excellent code analysis skills. Similarly to cryptography you really have to get it right. This is on top of the security problems of bitcoin (securing your computer, securing the exchange, understanding and persecute any crime committed against you) - the DAO hack was not handled well by the community, to me it seems everyone is in it to make some quick money, or maybe for the lulz? There was a fork, and now you get to experience a massive cognitive dissonance when moving between /r/ethereum and /r/ethereumclassic; nothing constructive can come out of this. - the blockchain technology makes it quite difficult to build practical apps (judging from my experience building a tic tac toe game for two players on a private blockchain, and the quality of the stuff that was out there last time I checked).
dangero 10y ago
If it were all about features that would be true. You could build a better facebook that could do cooler stuff than facebook and it would never overtake facebook. Not to mention it's not clear that features are the most important part of a digital currency. Scaleability, reliability, and simplicity could all end up being more important. Even branding meaning the name itself could be significant for the growth curve.
TylerE 10y ago
I agree with the first part of your statement, but disagree strongly with the second. I think that cryptocurrency is in general a solution to a problem that doesn't exist, outside of black market use.
- hudon 10y ago
  > a solution to a problem that doesn't exist The problems are central banking and related problems: demonetization, devaluation, hyperinflation, bank bail outs from taxpayers, etc.
- clarkmoody 10y ago
  > a solution to a problem that doesn't exist What alleged problem do you think Bitcoin is trying to solve?
  - TylerE 10y ago
    Psuedonymous transactions.
    - tcoff91 10y ago
      That's not bitcoin's killer use-case. It's killer use-case is as a store of value.
    - clarkmoody 10y ago
      I think many people are finding cross-border transactions to be the big draw for Bitcoin, especially in places like Venezuela. Ordinary people are using cryptocurrency to skirt government-imposed monetary controls. They don't care about the privacy angle and aren't trying to obtain illegal / harmful products.
    - ryanlol 10y ago
      We already have wire transfers for that, no? Bitcoin is making value transfers cheap, fast and accessible.
ericb 10y ago
Rebuttal: Ethereum has far worse properties as a store of value. -More complex codebase, which makes assessing vulnerabilities more difficult, and security more difficult. -Ethereum broke trust and "code is law" when self-interested parties were able to rewrite history. Transaction malleability is a terrible property for a "store of value." It leaves the currency open to government interference, manipulation, etc. -Ethereum has an inflationary schedule. Given a choice between holding an inflating or deflating asset, it seems straightforward which to choose. -The utility of a given currency is dependent on the number of holders (like Metcalf's law) -The hashrate and mining power securing bitcoin's network is far greater.
- DennisP 10y ago
  A virtual machine isn't all that complicated. Balancing that out, Ethereum's account balances are simpler than UTXOs, and of course Bitcoin has its own more-limited scripting. Ethereum is entirely defined by a 32-page spec, which is detailed enough that independent clients have been built from it. Ethereum isn't technically any more malleable than Bitcoin. You might say it's more socially malleable, but governments can't force the community to make any particular decision, any more than they can with Bitcoin. Ethereum's supply is currently inflating at 13% annually. Bitcoin was at 9% just before last summer's halving, and when it had a $1 billion market cap it was inflating at 33%. If Ethereum succeeds with proof of stake its inflation will drop below 2%, less than Bitcoin has now. Bitcoin's hashrate is much higher, but that's misleading since Ethereum has a completely different hashing algorithm, running on different hardware. If you compare how much each chain pays for security, the difference is roughly equal to the difference in their market caps.
  - ericb 10y ago
    Quoting current inflation is misleading--adopters know the eventual plan for bitcoin is capped, whereas ethereum is uncapped. A turing complete virtual machine is infinitely complicated--it can run anything. The implementation is "trivial" compared to the infinite surface area. The number of spec-pages is not a useful metric. Social malleability is just as bad as technical malleability.
contingencies 10y ago
First employee of a major exchange here. High BTC values and regulatory acceptance are good for the crypto-currency sector as a whole. Bitcoin's persent-era limitations are well documented, and these do not affect market capitalization, maturity and the availability of conventional asset exchange infrastructure which are all critical factors in large-scale adoption. Major exchanges that have added ETH essentially represent a de-facto recognition that BTC is not the "one true solution", and that's fine. No system is all things to all people. In heterogeneity lies strength.
- kylebenzle 10y ago
  Bitcoin's ... limitations .... do not affect market capitalization I hope I am not misunderstanding but it sounds like you are saying people will use bitcoin no matter how long tx time is or how high fees go? As a major player in Bitcoin I think it imperative that you guys understand that is not true, users will stop using and new users will never join if it takes too long or is too expensive. I feel the exchanges could have a huge part to play in responsibly forking the system to 2 mb and beyond as a signal to miners and offer confidence to users that there coins are safe no matter what, not all this "We have no official stance" stuff which instills neither confidence nor the feeling there there is even anything important that needs "fixed". You guys should be the front line demand this upgrade, why aren't you?
  - wmf 10y ago
    Bitcoin's value comes from speculators who use exchanges not the blockchain. Their off-chain transactions don't need to confirm and they don't pay (Bitcoin) fees. Long-term "hodlers" also probably don't care if it takes a full day and a $100 fee to cash out their $100K of profit. People who actually use the Bitcoin blockchain could all be scared away and BTC would still be $1,000.
  - contingencies 10y ago
    Firstly, to clarify I am no longer involved in the referenced business except as a shareholder. I am involved in a newly emerging multi-asset financial services business with an interest in using cryptographic currencies for cross-border transactions. I agree with your assessment that high fees will affect volume, however that is really a separate discussion and perceptions of acceptable fees vary widely by scenario.
Rmilb 10y ago
Ethereum's currency (ether) is not finite and is predicted to not hold value like bitcoin. Ether is needed to power smart contracts not built to hold value. Bitcoin wants to be digital gold, ether wants to be digital oil that is used to power smart contracts. This is a good way to explain it to the average person.
- deleted 10y ago
  [deleted]
- Fantastic_T 10y ago
  It's not finite but inflation is paid out to ETH holders in proportion to the amount of ETH they stake for validation, so on the balance, ETH holdings experience no dilution. Rather, there is constant (and gradual, at a rate of about 1-2% per year) transference of ETH value from inactive holders, who don't stake their ETH, to active holders, who do. So I think ETH can be both digital oil (or digital solar, if you want to be PC) and digital gold.
vaporwave 10y ago
Ethereum has amazing features and development, and there is definately a LOT more activity in the ethereum development space vs bitcoin. Ethereum makes me anxious as an investment because it has no defined long term monetary policy, and initially ether were labelled the "fuel" of ethereum rather than being a commodity currency. Bitcoin OTOH has a monetary policy incredibly clearly defined by a jesus-like figure who has now disappeared. Inflation is fixed and total supply is set at 21 million. Even if some group decided they wanted to change this there are enough people who are committed to 21 million that they will just maintain whatever fork still enacts satoshis original monetary policy. This is non-negotiable and results in a truly inflation-proof currency.
- cableshaft 10y ago
  Yeah, but Ethereum is still pretty cheap. I figured I could get a good amount of Ethereum for a modest investment and if it ever truly takes off like Bitcoin did, it will have been worth it, and if not, oh well, I'm only out a couple hundred dollars. As it is, it's currently worth more than I bought it for.
ns8sl 10y ago
My primary issue with Ethereum is the Turing-completeness. The more capabilities a language has, the more likely it will be compromised. Complex contracts will continue to be exploited like the DAO, which will put a damper on Ethereum's growth.
panarky 10y ago
This was the thinking in the heyday of the DAO [1], when you could get 30 ETH per BTC. Now that Ethereum's weaknesses have been exposed, the exchange rate has stabilized at about 90 ETH per BTC [2]. Mr. Market says Ethereum has lost nearly two-thirds of its value compared to Bitcoin. There will be many cryptocurrencies with different capabilities alongside off-chain vehicles with other interesting and useful capabilities. Maybe Bitcoin is the slow, steady, reliable, non-inflationary and boring reserve currency that is a long-term store of value and a safe harbor during stormy weather. Perhaps Bitcoin isn't judged by whether people use it to pay for their dry cleaning, but as the backbone of a new digital economic system. [1] http://www.coindesk.com/understanding-dao-hack-journalists/ http://www.coindesk.com/understanding-dao-hack-journalists/ [2] https://cryptowat.ch/kraken/ethbtc/3d https://cryptowat.ch/kraken/ethbtc/3d
xorcist 10y ago
Well, "more powerful" isn't always a feature. There was some discussion early on how advanced the scripting language really should be, and since the departure of Nakamoto the developers have both taken away and added features to it. Some very smart people have thought about this, and it's probably far from perfect. But just throwing a VM in there isn't going make things better. Ethereum has had to make some radical changes to their initial idea. I think what we saw not just with the DAO but in fact most valuable contracts demonstrates quite well that it wasn't the most suitable design imaginable. But things will move on, and new coins will appear to take its place. It has been quite obvious for several years now however that any new cryptocurrency will be bootstrapped from Bitcoin, not from USD. That is one of the reasons I keep an interest in it.
markkat 10y ago
IMO they will both continue to grow. Bitcoin simply cannot do what Ethereum can, and as a result, Ethereum will continue to be used.
cashmonkey85 10y ago
Ethereum is a complete scam. Amazes me that other technical people can't see it. Can they backup any of their claims of a turing complete autonomous system. Nope! Total vaporware and has no way of scaling to any degree. My only interest in the project is to see how far a sophisticated scam can go. Can the higher quality commenting on HN spot the scam? Not yet! How far can smoke and mirrors trick an educated audience? It's a very interesting project in this regard

deweller 10y ago

Ethereum is an incredibly ambitious and exciting project. I really want Ethereum to succeed, and it probably will. But it is easy to underestimate the widespread adoption and trust in Bitcoin. Bitcoin will always be the standard cryptocurrency store of value. There may end up being 10 other globally useful blockchains, but they will all use Bitcoin as their base store of value and medium of value exchange.

brilliantcode 10y ago
It's already abandoned. There's no major players adopting it.
- brilliantcode 10y ago
  feel free to prove me wrong by posting ethereum adoption by Fortune 500 instead of downvoting.
  - DennisP 10y ago
    I don't have much handy right now, but after this Enterprise Ethereum launch event on Monday there might be more information available: https://www.eventbrite.com/e/enterprise-ethereum-alliance-launch-tickets-31647140449 https://www.eventbrite.com/e/enterprise-ethereum-alliance-la...

UweSchmidt 10y ago

After the DAO debacle the Ethereum story is dead to me: - it is not feasible to write or verify safe "smart contracts" without having excellent code analysis skills. Similarly to cryptography you really have to get it right. This is on top of the security problems of bitcoin (securing your computer, securing the exchange, understanding and persecute any crime committed against you) - the DAO hack was not handled well by the community, to me it seems everyone is in it to make some quick money, or maybe for the lulz? There was a fork, and now you get to experience a massive cognitive dissonance when moving between /r/ethereum and /r/ethereumclassic; nothing constructive can come out of this. - the blockchain technology makes it quite difficult to build practical apps (judging from my experience building a tic tac toe game for two players on a private blockchain, and the quality of the stuff that was out there last time I checked).

dangero 10y ago

If it were all about features that would be true. You could build a better facebook that could do cooler stuff than facebook and it would never overtake facebook. Not to mention it's not clear that features are the most important part of a digital currency. Scaleability, reliability, and simplicity could all end up being more important. Even branding meaning the name itself could be significant for the growth curve.

TylerE 10y ago

I agree with the first part of your statement, but disagree strongly with the second. I think that cryptocurrency is in general a solution to a problem that doesn't exist, outside of black market use.

hudon 10y ago
> a solution to a problem that doesn't exist The problems are central banking and related problems: demonetization, devaluation, hyperinflation, bank bail outs from taxpayers, etc.
clarkmoody 10y ago
> a solution to a problem that doesn't exist What alleged problem do you think Bitcoin is trying to solve?
- TylerE 10y ago
  Psuedonymous transactions.
  - tcoff91 10y ago
    That's not bitcoin's killer use-case. It's killer use-case is as a store of value.
  - clarkmoody 10y ago
    I think many people are finding cross-border transactions to be the big draw for Bitcoin, especially in places like Venezuela. Ordinary people are using cryptocurrency to skirt government-imposed monetary controls. They don't care about the privacy angle and aren't trying to obtain illegal / harmful products.
  - ryanlol 10y ago
    We already have wire transfers for that, no? Bitcoin is making value transfers cheap, fast and accessible.

ericb 10y ago

Rebuttal: Ethereum has far worse properties as a store of value. -More complex codebase, which makes assessing vulnerabilities more difficult, and security more difficult. -Ethereum broke trust and "code is law" when self-interested parties were able to rewrite history. Transaction malleability is a terrible property for a "store of value." It leaves the currency open to government interference, manipulation, etc. -Ethereum has an inflationary schedule. Given a choice between holding an inflating or deflating asset, it seems straightforward which to choose. -The utility of a given currency is dependent on the number of holders (like Metcalf's law) -The hashrate and mining power securing bitcoin's network is far greater.

DennisP 10y ago
A virtual machine isn't all that complicated. Balancing that out, Ethereum's account balances are simpler than UTXOs, and of course Bitcoin has its own more-limited scripting. Ethereum is entirely defined by a 32-page spec, which is detailed enough that independent clients have been built from it. Ethereum isn't technically any more malleable than Bitcoin. You might say it's more socially malleable, but governments can't force the community to make any particular decision, any more than they can with Bitcoin. Ethereum's supply is currently inflating at 13% annually. Bitcoin was at 9% just before last summer's halving, and when it had a $1 billion market cap it was inflating at 33%. If Ethereum succeeds with proof of stake its inflation will drop below 2%, less than Bitcoin has now. Bitcoin's hashrate is much higher, but that's misleading since Ethereum has a completely different hashing algorithm, running on different hardware. If you compare how much each chain pays for security, the difference is roughly equal to the difference in their market caps.
- ericb 10y ago
  Quoting current inflation is misleading--adopters know the eventual plan for bitcoin is capped, whereas ethereum is uncapped. A turing complete virtual machine is infinitely complicated--it can run anything. The implementation is "trivial" compared to the infinite surface area. The number of spec-pages is not a useful metric. Social malleability is just as bad as technical malleability.

contingencies 10y ago

First employee of a major exchange here. High BTC values and regulatory acceptance are good for the crypto-currency sector as a whole. Bitcoin's persent-era limitations are well documented, and these do not affect market capitalization, maturity and the availability of conventional asset exchange infrastructure which are all critical factors in large-scale adoption. Major exchanges that have added ETH essentially represent a de-facto recognition that BTC is not the "one true solution", and that's fine. No system is all things to all people. In heterogeneity lies strength.

kylebenzle 10y ago
Bitcoin's ... limitations .... do not affect market capitalization I hope I am not misunderstanding but it sounds like you are saying people will use bitcoin no matter how long tx time is or how high fees go? As a major player in Bitcoin I think it imperative that you guys understand that is not true, users will stop using and new users will never join if it takes too long or is too expensive. I feel the exchanges could have a huge part to play in responsibly forking the system to 2 mb and beyond as a signal to miners and offer confidence to users that there coins are safe no matter what, not all this "We have no official stance" stuff which instills neither confidence nor the feeling there there is even anything important that needs "fixed". You guys should be the front line demand this upgrade, why aren't you?
- wmf 10y ago
  Bitcoin's value comes from speculators who use exchanges not the blockchain. Their off-chain transactions don't need to confirm and they don't pay (Bitcoin) fees. Long-term "hodlers" also probably don't care if it takes a full day and a $100 fee to cash out their $100K of profit. People who actually use the Bitcoin blockchain could all be scared away and BTC would still be $1,000.
- contingencies 10y ago
  Firstly, to clarify I am no longer involved in the referenced business except as a shareholder. I am involved in a newly emerging multi-asset financial services business with an interest in using cryptographic currencies for cross-border transactions. I agree with your assessment that high fees will affect volume, however that is really a separate discussion and perceptions of acceptable fees vary widely by scenario.

Rmilb 10y ago

Ethereum's currency (ether) is not finite and is predicted to not hold value like bitcoin. Ether is needed to power smart contracts not built to hold value. Bitcoin wants to be digital gold, ether wants to be digital oil that is used to power smart contracts. This is a good way to explain it to the average person.

deleted 10y ago
[deleted]
Fantastic_T 10y ago
It's not finite but inflation is paid out to ETH holders in proportion to the amount of ETH they stake for validation, so on the balance, ETH holdings experience no dilution. Rather, there is constant (and gradual, at a rate of about 1-2% per year) transference of ETH value from inactive holders, who don't stake their ETH, to active holders, who do. So I think ETH can be both digital oil (or digital solar, if you want to be PC) and digital gold.

vaporwave 10y ago

Ethereum has amazing features and development, and there is definately a LOT more activity in the ethereum development space vs bitcoin. Ethereum makes me anxious as an investment because it has no defined long term monetary policy, and initially ether were labelled the "fuel" of ethereum rather than being a commodity currency. Bitcoin OTOH has a monetary policy incredibly clearly defined by a jesus-like figure who has now disappeared. Inflation is fixed and total supply is set at 21 million. Even if some group decided they wanted to change this there are enough people who are committed to 21 million that they will just maintain whatever fork still enacts satoshis original monetary policy. This is non-negotiable and results in a truly inflation-proof currency.

cableshaft 10y ago
Yeah, but Ethereum is still pretty cheap. I figured I could get a good amount of Ethereum for a modest investment and if it ever truly takes off like Bitcoin did, it will have been worth it, and if not, oh well, I'm only out a couple hundred dollars. As it is, it's currently worth more than I bought it for.

ns8sl 10y ago

My primary issue with Ethereum is the Turing-completeness. The more capabilities a language has, the more likely it will be compromised. Complex contracts will continue to be exploited like the DAO, which will put a damper on Ethereum's growth.

panarky 10y ago

This was the thinking in the heyday of the DAO [1], when you could get 30 ETH per BTC. Now that Ethereum's weaknesses have been exposed, the exchange rate has stabilized at about 90 ETH per BTC [2]. Mr. Market says Ethereum has lost nearly two-thirds of its value compared to Bitcoin. There will be many cryptocurrencies with different capabilities alongside off-chain vehicles with other interesting and useful capabilities. Maybe Bitcoin is the slow, steady, reliable, non-inflationary and boring reserve currency that is a long-term store of value and a safe harbor during stormy weather. Perhaps Bitcoin isn't judged by whether people use it to pay for their dry cleaning, but as the backbone of a new digital economic system. [1] http://www.coindesk.com/understanding-dao-hack-journalists/ http://www.coindesk.com/understanding-dao-hack-journalists/ [2] https://cryptowat.ch/kraken/ethbtc/3d https://cryptowat.ch/kraken/ethbtc/3d

xorcist 10y ago

Well, "more powerful" isn't always a feature. There was some discussion early on how advanced the scripting language really should be, and since the departure of Nakamoto the developers have both taken away and added features to it. Some very smart people have thought about this, and it's probably far from perfect. But just throwing a VM in there isn't going make things better. Ethereum has had to make some radical changes to their initial idea. I think what we saw not just with the DAO but in fact most valuable contracts demonstrates quite well that it wasn't the most suitable design imaginable. But things will move on, and new coins will appear to take its place. It has been quite obvious for several years now however that any new cryptocurrency will be bootstrapped from Bitcoin, not from USD. That is one of the reasons I keep an interest in it.

markkat 10y ago

IMO they will both continue to grow. Bitcoin simply cannot do what Ethereum can, and as a result, Ethereum will continue to be used.

cashmonkey85 10y ago

Ethereum is a complete scam. Amazes me that other technical people can't see it. Can they backup any of their claims of a turing complete autonomous system. Nope! Total vaporware and has no way of scaling to any degree. My only interest in the project is to see how far a sophisticated scam can go. Can the higher quality commenting on HN spot the scam? Not yet! How far can smoke and mirrors trick an educated audience? It's a very interesting project in this regard