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Why Ethereum is outpacing Bitcoin

149 points by bpierre 9y ago

opportune 9y ago
Could someone that understands crypto better than me explain why Bitcoin's fees and transactions times have become so high all of a sudden? Is it just a matter of network congestion, or does it have as its root some underlying mathematical factor instead? Hoping to get a better answer here than on reddit. /r/bitcoin and /r/btc are both biased echo chambers.
- JohnJamesRambo 9y ago
  The miners only process transactions that have higher and higher fees. This makes lower fee transactions take forever to be processed or never happen at all. Since bitcoin limits how many transactions that can occur in a set amount of time it creates this awful fee-based backlog. The self-serving and shortsighted bitcoin community has argued and bickered amongst itself so long about how to fix this that it may be too late now.
  - opportune 9y ago
    Is this a conscious decision on behalf of the miners themselves, or is it a result of mining becoming increasingly more difficult?
    - JohnJamesRambo 9y ago
      My understanding is that it is fueled by greed and desire for short term gains at the expense of bitcoin health in the long run. The people involved aren't the most admirable folk. For instance, this is the leader of the biggest mining company- https://twitter.com/jihanwu/status/731902686379933697?lang=en https://twitter.com/jihanwu/status/731902686379933697?lang=e... A good contrast is that Vitalik Buterin, one of the founders of Ethereum recently said the gas fees for Ethereum are too high (they were still quite low compared to bitcoin) and the miners voluntarily just lowered the gas fees, which determine the transaction costs. It seems to be a very different community running each currency.
    - plokiju 9y ago
      the miners are running software that decides which transactions to include, and I'm sure the software has some logic where it will pick the highest-fee transactions when they can't include them all
    - nas 9y ago
      The limit on transactions per second is a function of the block size, currently 1 MB. Based on what the miners say, they would be interested in increasing the block size. Understand that the miners like high fees but they like high bitcoin prices even more. The fees are only a fraction of the block reward. If the system becomes too expensive then the miners will lose a lot more than just some fees. The 1 MB limit is set by the bitcoin software. The software that most everyone runs is developed by a group called the "bitcoin core". That group has mostly been taken over by the company Blockstream (this is my opinion, others would argue the team is diverse and not controlled by any one company). Blockstream's business is based on off-chain transactions (i.e. the Lightning network). It is in Blockstream's interest to get a feature that enables Lighting into the Bitcoin software (SegWit). Miners have been refusing to upgrade. One theory is that SegWit will disable a special optimisation that one of the biggest miners uses (ASCIBoost). In any case, Bitcoin core team refuses to increase the block size and the miners have been refusing to enable SegWit. The SegWit upgrade is a good thing, IMHO, even though it seems like a pretty complicated feature. Having the ability to open "payment channels" and make cheap transactions off the main chain would be great. However, I feel that a block size increase to 2 MB or 4 MB is long overdue. I don't understand all the technology issues so maybe there is some really good reason not to do it. It is clear to me that Satoshi (founder of Bitcoin) and Gavin (previous leader of Bitcoin core group) felt that the block size could be scaled to keep fees low. Both software improvements and hardware/network improvements would progress quickly enough to scale with demand. The current core team does not think so and think off-chain transactions are the only way to scale now.
- zachaller 9y ago
  There are a few things that contribute to this bitcoin has a block size of 1MB and they only add new blocks every 10min. There are only so many transactions you can fit in that block size. The other thing is as the block reward gets half'ed miners will ask for more fee's as well as miners will mine blocks with higher fee's first. So as a way to combat some of the congestions people increase the amount of fee they are willing to pay to get included into a block faster.
- plokiju 9y ago
  Early on in bitcoin, a 1MB limit was added to the block size, which puts a cap on the number of transactions that can be included in each block. Now that bitcoin is more popular, there are more transactions then can fit in each block, which means miners will only include the transactions that include the highest fees. There are a number of ways to solve this (the easiest being expanding the block size), but the community is split on the best way forward, so the congestion is getting worse
- marcell 9y ago
  Bitcoin blockchain has a limit of 1MB of transactions in a block. This was set in 2013, when Satoshi put it in place. He didn't give much explanation for it, but it was probably to avoid a spam attack. He said it could be raised later: https://bitcointalk.org/index.php?topic=1347.msg15139#msg15139 https://bitcointalk.org/index.php?topic=1347.msg15139#msg151... There are arguments for and against increasing the blocksize. For: - Support more transactions per second - Lower fees for users Against: - Hardfork requires all full node operators to upgrade, or they could see incorrect balances - Lower fees mean that miners make less money Also, generally, there are some philosophical differences between the sides. The big-block side usually wants bitcoin to be more like a payment network, wherease the small-block side typically views it more as digital gold and store of value.
  - zby 9y ago
    "Lower fees mean that miners make less money" - not really. There are two mechanisms: 1. The congestion would mean bigger fees 2. In bigger blocks there will be more transactions - so more fees in the block The most probably cancel each other. Actually the big miners seem to be in favour of the Bitcoin Unlimited big blocks. What they want to stop is SegWit which is needed for scaling bitcoin off chain with Lightning etc. There is a conspiracy theory about that - and it actually makes sense to me - which is that SegWit would eliminate ASICBoost (which is an optimization technique that is implemented in some ASIC miners). But there is also another narrative that Lightning would mean banking entering the Bitcoin community - and that is why it should be stopped. Bitcoin can never become a good payment processor - this would require many orders of magnitude bigger blocks (now bitcoin can process about 7 transactions per second, VISA can process 50K transactions per second). And while storage for bigger blocks grows linearly - the other algos have probably worse complexity.
  - Obi_Juan_Kenobi 9y ago
    > This was set in 2013 Wrong date, it was July 2010 I believe.
- drcode 9y ago
  There's a discontinuity in transaction pricing caused by the fact that Bitcoiners are hitting a hard 1MB limit on the blockchain. It's kind of like the situation with airliners: If there are empty seats left, it's cheap to add another flier. However, once the seats are all taken, it gets extraordinarily costly to get another passenger on board, to the point that they have to violently evict someone to make a spot available.
- Obi_Juan_Kenobi 9y ago
  This is a reasonable start: https://en.bitcoin.it/wiki/Block_size_limit_controversy https://en.bitcoin.it/wiki/Block_size_limit_controversy First, most people want Bitcoin to scale such that more people can use it. This can be done directly on the blockchain by allowing more transactions to be recorded in each block. Or it could be done with '2nd layer' solutions that periodically resolve on the Bitcoin blockchain. Such solutions require some changes to the Bitcoin clients people operate; the current 'most popular' version of this is called Segregated Witness, aka SegWit. Right now, more people want to create transactions than can actually do so, thus a fee market has formed to get transactions included in blocks. This is why fees have increased. It's a debate that sounds like a technical detail, but in reality it goes straight to the core of what Bitcoin is and how it will work. There is the debate over what changes will be made, but there is also a debate about how this decision will be made. Some feel that all changes to the Bitcoin protocol should be made with strong consensus, a conservative approach that has worked alright up to this point. Some still hope that this can be done, but the deep ideological division that belies this debate makes that seem unlikely. The alternative view is that Bitcoin is designed to handle these disagreements naturally by hard fork. A hard fork is a split of the Bitcoin blockchain into different incompatible chains. In this case, it would be a split over the maximum permissible block size; one group would allow larger blocks, and another would refuse them. This would lead to a situation where miners choose which chain to mine on. Miners are incentivized by mining rewards (coinbase rewards), and thus have an economic incentive to mine on the chain they believe will have the greatest market value. This will likely result in a positive-feedback mechanism where one chain dominates the other; this has played out on the Ethereum chain where 'classic' ether is worth far less. A stable split is also possible, and thus there would be two versions of Bitcoin with different rules. Any coins generated or transacted pre-fork would be valid on both chains, but post-fork would commit to one chain or the other. As for the bigger blocks, it comes down to predicting how the network will behave with larger blocks. It would permit more transactions, without question. It would also increase the bandwidth and data storage requirements of full-node operators. Basically, it would be more expensive to operate the Bitcoin network (which is distinct from the cost to secure it, which is scheduled coinbase inflation and txn fees). It would also mean that miners that are closer to each other on the network (via latency and throughput) would have a competitive advantage as they would confirm each other's valid blocks more quickly, and thus there are concerns about miner centralization. Such centralization presents a point of failure for the network. Make no mistake; it is very difficult to predict what will happen with different protocol parameters. There's a lot of game theory that you can do to try to understand it. For instance, miners may mine larger blocks to include more transactions, and thus transaction fees, but risk slower propagation of their valid block through the network. In the case of valid blocks being found at the same moment, the one that propagates faster will 'win' and the other will be orphaned. Some argue that the risk of orphaned blocks is an effective limit to blocksize, and thus no blocksize limit is needed. It would also peg transaction fees to the marginal risk of a block being orphaned.
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yellowapple 9y ago
"In a world where people are used to online payments being confirmed instantly, Bitcoin transactions can take anywhere from tens of minutes to several hours, depending on how busy the network is." Online payments (via traditional means) are by no means "confirmed instantly". The authorization happens more-or-less instantly, but that's only the first of multiple steps in the transaction process; the actual transfer of funds often takes at least one business day, if not more.
- ssharp 9y ago
  For someone buying something, authorization is all that matters.
  - yellowapple 9y ago
    Kind of. It's at least the part that matters if you want to walk out of the store with your merchandise. It's not the part that matters on your card statement, though.
- theptip 9y ago
  There's two ways of interpreting "online payments" here. Through the lens of ACH/wire payments, your point is spot on. However, I suspect the author meant Venmo/Paypal etc.; that's certainly how I interpreted the sentence. I'd argue that those services are better comparisons for P2P payments, especially in the US, where most consumers are not able or inclined to give out their bank information to receive an ACH payment. Compared to those incumbent online P2P payment services, Bitcoin really is starting to lag behind in that regard.
  - yellowapple 9y ago
    "However, I suspect the author meant Venmo/Paypal etc." And my remark is still applicable there, since they're basically just frontends to the traditional ACH/wire payment system (at least in the case of Paypal; I haven't used Venmo much, so I'm not as familiar with how it works). Unless Paypal is paying the seller before receiving actual funds from the buyer, I'm not really seeing how this would be any different of a situation.
Tommek 9y ago
So a guy from a company selling Ethereum is telling us why it's better then the stuff they've copied?
dpc_pw 9y ago
The whole reason why Ethereum is "outpacing" Bitcoin is easiness of taking money from clueless "investors" that feel like they missed the boat on becoming rich through Bitcoin. https://medium.com/@WhalePanda/i-was-wrong-about-ethereum-804c9a906d36 https://medium.com/@WhalePanda/i-was-wrong-about-ethereum-80... It's going to be a big mess, one this bubble pops.
- agumonkey 9y ago
  Not so fast, it's not "only" a bubble.
  - kgwgk 9y ago
    You're right, there are several bubbles.
    - agumonkey 9y ago
      That's not what I meant, but I can't say more right now.
      - kgwgk 9y ago
        I know. I was joking and I can't say that I didn't deserve the downvotes.
- gfodor 9y ago
  People have been expecting the crypto bubble to pop for almost a decade now, but prices continue to rise. At some point you have to admit that this isn't tulip bulbs.
  - res0nat0r 9y ago
    Sounds like the argument folks were trying to make about the housing market, and we know how that turned out.
pdog 9y ago
It's pretty clear what's happening. Ethereum (ETH) is rising because people are buying into initial coin offerings (ICOs). They aren't holding ETH, so they don't care about the price of ETH rising in terms of Bitcoin (BTC) or dollars. The ICOs are the significant holders of ETH. They haven't sold their ETH because 1) the price of ETH is still rising rapidly, 2) they don't yet need to access the funds for development, and 3) smart contracts connected to token sales usually allocate ETH for future use. Eventually, ICOs will begin to sell or distribute their ETH to fund the development of their projects.
- JohnJamesRambo 9y ago
  I don't think that is true at all. Most people can't even get in on the ICOs.
  - mtgx 9y ago
    It's not about "most people," it's about "most cash." The "whales" are buying ICOs left and right, and dumping their Bitcoin/other altcoins. That's the main reason for ETH's rise. Eventually some of these ICOs will prove to be scams, or will get hacked with catastrophic results, and ETH's price will fall again. It doesn't necessarily mean it won't rise back-up again, but by then we'll just have to see if ETH is still a top 2 coin to get.
    - JohnJamesRambo 9y ago
      Ok show me data on what percent of the market cap is from ICOs. Bancor's recent debacle raised 150 million and that is the largest ICO yet. Ethereum has a 36 billion market cap as far as I know.
      - krrrh 9y ago
        It's a question of liquidity, not of "market cap".
    - koolba 9y ago
      > Eventually some of these ICOs will prove to be scams, or will get hacked with catastrophic results, and ETH's price will fall again. s/some/most/
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pazimzadeh 9y ago
Between this and Fred Wilson's recent comments, it's pretty neat seeing a meme take shape right before our eyes. I'm not saying this article is wrong, but that it offers little substance. My pet theory is that Ethereum will transiently surpass Bitcoin in market cap in the next weeks, triggering a 5x surge in Bitcoin's price. Ethereum will then follow, and what happens next is anyone's guess. Why do I think that? Uh..heuristics.
- aaron-lebo 9y ago
  Why is Ethereum's price rising? It's because of breathless articles like this. It's a self-fulfilling prophecy. Wonder how much this guy has invested? If those dapps are so great, why isn't there a single one that regular people are using today?
  - DiNovi 9y ago
    You could say that about the internet 30 years ago...
    - root_axis 9y ago
      And? You're remarking on a surface-level resemblance to the greatest communication and economic innovation in human history. It's a disingenuous comparison.
      - Jenya_ 9y ago
        Judging by the size of financial industry, the electronic money which could be programmed to do things with money without human help 24 hours per day is a serious threat to many companies in finance.
        root_axis 9y ago
        > do things with money without human help 24 hours per day This was already possible before cryptocurrencies, hence how I'm able to buy anything online at any time of day and have it delivered to me within 24 hours.
qeternity 9y ago
Why Ethereum's price is outpacing Bitcoin - FTFY The pace of adoption leaves much to be desired. And if you think bitcoin is hard for the layperson to understand, ethereum is a whole other can of worms.
- headcanon 9y ago
  Ethereum's adoption has already surpassed Bitcoin's with several metrics: number of transactions, trading volume, mining reward, and number of nodes. ETH also has ~80% of BTC's market cap. True, it does not have the name recognition that Bitcoin has, but its not just a price bubble that is driving this. This site has real time updates as to the status of the "flippening": http://www.flippening.watch/ http://www.flippening.watch/
  - aaron-lebo 9y ago
    Every single one of those metrics could be driven by speculation, they don't say anything about real-world adoption.
maxxxxx 9y ago
Isn't that basically a currency with hyper-deflation? Shouldn't a currency be relatively stable to be useful for payments?
- aakilfernandes 9y ago
  Absolutely agree, and Ethereum is a great platform for building those stable currencies. Check out Stabl and Maker for two orgs trying to make this happen. But its also trivial to issue fiat-backed tokens on Ethereum (at least from a technical PoV). See Digix who is doing this with Gold.
- floatboth 9y ago
  Might be more stable when they switch to proof of stake though?
Taek 9y ago
> Ethereum has raced ahead with technology that not only does everything Bitcoin can do faster, in higher volume, and at lower cost — it does a lot more besides. Statements like these frustrate me, because they paint a picture as though Ethereum is a strict upgrade to Bitcoin, without depicting the many sacrifices that Ethereum has made to get its advantages. The word blockchain in general has completely changed meaning - no longer does it specify systems where there is no trust involved, instead it specifies systems that create a high interoperability between money and applications. There's a huge difference in the security and decentralization model of Bitcoin and Ethereum. Bitcoin has no central leadership, actively rejects the pursuance of one, and works hard to build a network that simply can't be attacked. Ethereum on the other hand has a powerful central leadership, and moves faster and does things that are in general far less secure. When they hit road bumps like the DAO attack, the 'Spurious Dragon' chain split, or other major network events, they fall back on their central leadership to resolve the issue quickly. That's really not decentralized, and it's completely different from the vision that Bitcoin originally painted. It's a completely valid model, and it's a step up from using a fully centralized platform like the Google Cloud, but ultimately the Ethereum foundation and surrounding leadership has the ability to push through controversial changes, something that is strictly rejected by the Bitcoin philosophy. It's also not clear what will happen if someone like the US Government leans into the Ethereum Foundation asking for things like capital controls. Bitcoin doesn't have a leadership for the government to lean into - it's going to be a lot harder to add captial controls to Bitcoin than to Ethereum. Depending on who you are, that's either an advantage or a disadvantage, but at the very least it's a very clear distinguisher. For that reason, Bitcoin is far more interesting to me as a technology. It's the first and really only, technology that allowed something like a monetary system to stand completely independent of a leadership or a governance structure. Ethereum hasn't achieved the same thing, that much is made obvious by the fact alone that they don't know what the core consensus algorithm of the network will be in 18 months (maybe it will switch to a yet-undefined Proof-of-Stake, maybe not). Don't get me wrong. Ethereum is doing interesting things. They've completely changed the way people thing about money and applications, and made it possible to apply money to everything. But it's far less secure, and it Ethereum today simply wouldn't work without its central leadership. To me, that makes it not much different from any other technology out there - its giving us new and more efficient ways to do things that we have already been doing. But anybody who thinks that Ethereum is a strict upgrade to Bitcoin has completely missed the point, because Ethereum does not have the core value proposition that Bitcoin provides. Bitcoin is a complete financial system that you can use without needing to trust anybody. Not the developers, not the miners, not the government. Bitcoin is extremely impressive, and definitely is a technology in a class of its own.
root_axis 9y ago
> As a “hard fork” looms, which looks set to split Bitcoin into two separate currencies that will have to fight for custody of the Bitcoin moniker This already happened to eth when the creators hard forked the chain in an effort to roll back operations of an eth application that was used in a way that the creators did not anticipate. If this didn't kill ethereum why would it be a problem for bitcoin? Fortunately for bitcoin, there isn't a highly influential and transparently self-interested creator lording over the project. > Bitcoin transactions can take anywhere from tens of minutes to several hours, depending on how busy the network is. An unsolved growth problem for the reining incumbent that remains unsolved by ethereum. Transactions take a long time because decentralized proof of work verification is slow. A lot of people will say "proof of stake is coming!!!" but it's essentially vaporware and all signs point to the conclusion that it will remain that way for the foreseeable future. Yeah, people are working on it, like all vaporware. > Ethereum is actually a platform for new kinds of decentralized (often financial) applications (dApps) that run on a peer-to-peer network of computers Except this isn't actually happening in practice. I am yet to see any "new kinds of decentralized applications", just toy applications that have no practical purpose besides internet roulette > TL;DR: Bitcoin’s dominance is slipping because its utility is limited and weakening versus other more recently developed, less politicized cryptocurrencies. Bitcoin's dominance is not slipping because it's utility was marginal to begin with and eth certainly doesn't offer much in the way of compelling improvements over bitcoin.
- aaron-lebo 9y ago
  Indeed, it's interesting that existing applications are never cited, it's always future potential. Sounds like a great way to kick the can down the road. Invest now! Someday the network is gonna be really useful. You'll see!
  - 52-6F-62 9y ago
    Skepticism in this realm is certainly warranted and undoubtedly healthy. However, I think I should share this because the above two comments seem to have not caught wind of it. A number of enterprise-level organizations both within and without this org are working on projects and experiments both utilizing the public blockchain and private chains using the technology. I think there is some validity to the project that is simply not yet mainstream yet. https://entethalliance.org/members/ https://entethalliance.org/members/
cap3 9y ago
the only way to be in on ether is to hold it. That's true for individuals and for large institutions joining the Enterprise Ethereum Alliance. Behind the scenes, large institutions are buying up Ether and anticipating that it will become a part of the financial system (either that or it will become a shadow financial system, and they are therefore incentivized to be early adopters). There's no way to short ether or bitcoin. Everyone who is in is long. dapps don't do much right now (and there's a lot of writing about ponzi scheme dapps), but this is very early days and the flexibility of the ethereum platform is just starting to be fully understood. The article is right about the limitations of the bitcoin blockchain. Some commenters here are right about pieces like these being great advertisements for the platform and driving more buying. 1 Ether > $1000 USD in a matter of months, if not weeks.
- polskibus 9y ago
  Do you have a citation for large organizations buying up ether? I only came across articles mentioning corporations forking ethereum code and testing it out for other purposes.
  - headcanon 9y ago
    https://entethalliance.org/members/ https://entethalliance.org/members/
    - polskibus 9y ago
      Where does it say they are buying up ethereum?
- deleted 9y ago
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- dahdum 9y ago
  "There's no way to short ether or bitcoin" Incredibly untrue, many exchanges and a couple derivative platforms allow this. I haven't the chutzpah to short crypto, but plenty of people do.
- 9y ago
cdrark 9y ago
Research the exchange Poloniex. They have played a major role in the creation of tens of billions USD in "value" in altcoins over the past 2 months. There is zero transparency on their operations or ownership or supposed licensing.
- DiNovi 9y ago
  Polo Exchange is sketchy; but Ether is on many, many exchanges now
Animats 9y ago
This is an ad. "Jack du Rose is a cofounder of Colony, an Ethereum-based operating system for open organizations." Whatever that is. (It seems to be a scheme for monetizing StackOverflow rankings.[1] Or something like that. If it even exists. The web site is all pretty pictures with no content.) Most altcoins crash after a while. See Coin Market Cap.[2] [1] https://colony.io/ https://colony.io/ [2] https://coinmarketcap.com/ https://coinmarketcap.com/
- dreamdu5t 9y ago
  I signed up for the mailing list a year ago, and I don't think they've ever offered me access to their alpha. They've been around for 2+ years and don't seem to have a product that's accessible yet. EDIT: looks like they do now: https://blog.colony.io/colony-beta-product-summary-2121a357d61d https://blog.colony.io/colony-beta-product-summary-2121a357d...
- JohnnyConatus 9y ago
  I don't have access to the beta (yet) but friends do, and it is a legitimate product. They also have a slack channel where they're happy to answer questions.
- whazor 9y ago
  Colony is a well known organisation in the Ethereum community. Giving presentations on multiple devcons of Ethereum. Knowing that they have been around for a while gives him the authority to share his opinion.
jraines 9y ago
The ICO mania definitely contributes to this, but so does the worry about a Bitcoin split. I've read a lot about it and could not give you a coherent answer of what is likely to happen and what would be the impact if it does or does not happen. So people like me (probably in top 5% of knowledge among Bitcoin holders about the technical aspects) put holdings in other coins to wait and see. The coins that stand to benefit most from this are the ones traded on GDAX -- Ether and Litecoin. And Ether has the most breathless hype going for it right now. And this is the same advice I give to the non-technical people in my life who've jumped in late and don't have a Poloniex or Bittrex account to trade other coins (sign up for GDAX, balance things with a wait-and-see attitude towards August 1st). BTW - my 89 year old farmer grandpa who can't even get wired internet at his house now has a crypto portfolio, in case you're looking for bubble indicators. (And if you ask why my advice wasn't to avoid an investment you don't understand -- well, I am bullish on crypto long term and they really wanted to get in, and view it as a gamble, so . . .)
- DiNovi 9y ago
  I assume you sold him on the investment tho
  - jraines 9y ago
    He sold himself just on whatever is said on Bloomberg etc. And he views it about like laying $$$ on the Georgia Bulldogs to cover against Alabama, so I'm not going to put up a fight.
- anothercomment 9y ago
  But even with a Bitcoin split, what would be the problem? You would simply double your coins (kind of).
  - wyldfire 9y ago
    It would damage the brand of being the premier cryptocoin, having the most marketplace acceptance, secured by the most hashing power. Regarding hashing power -- I don't know; can the UASF and the original chain be merge-mined?
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X86BSD 9y ago
I don't follow the cryptocurrency world much. The last time I tried to really look into all the coins I bought some Monero. Monero seems the most sound technically and cryptographically. Can someone explain to me why one alt coin like etherum gets more attention/value than others? What is it doing that is novel, or makes it more secure, or more anonymous than say Monero?
nemo44x 9y ago
It's simple - Bitcoin is stagnant and full of politics and holy wars where as ETH is implementing everything Bitcoin promised 5 years ago. Bitcoin is facing an existential crisis August 1st (UASF) that some view as liberation and others as extortion. As if BTC wasn't high risk enough! Yes we haven't seen a single ICO that has resulted in anything worth anything yet and we probably shouldn't any time soon. Yes the rise in ETH the last few months is comical. Yes there are plenty of scams out there right now and some we don't even know are scams yet. But it's damn exciting. Anyone with an imagination can see this. It's the wild west and it's fun and crazy. And there's a real opportunity here to do something different. 99.9% of these early things are going to fail but there will be a breakthrough eventually I believe. And when that happens...
- drcode 9y ago
  Nicely said! And we should add to that that the exciting parts of ethereum may never fully exist in ethereum itself: It's totally plausible that this tech could instead be adopted by another project before becoming wildly successful. However, this doesn't make ethereum tech any less interesting.
F3L 9y ago
I have a question regarding the morality of buying these coins: 1. In buying I provide liquidity and add to the perception they have value. 2. I am aware they are a big Ponzi scheme and vulnerable people may lose money they cannot afford to. 3. However altcoins may be a "too big to fail" Ponzi scheme, which like the property market, will rise seemingly forever. 4. I would rather be on the inside than the outside if it does. I'm on the outside of the property market in the UK after correctly assessing it was a pyramid, but wrongly believing it would crash and not be propped up. 5. Good and vulnerable people might lose their savings because I have enabled a perception that these markets are not pyramid schemes. Please advise.
webninja 9y ago
A lot of articles mention the likes of Intel, Microsoft, Infosys, Samsung, J.P. Morgan etc — are building software using Ethereum or some other blockchain platform. But I wonder if they actually are just forking the code off of Github and creating their own blockchain or ethereum-based Microsoft token, or Intel token for their own internal use and this is being misrepresented by cryptocurrency-owning journalists. It seems to be too risky for big companies to build DApps for the authentic Ethereum when they can't predict that the price of gas won't quadruple again. Creating their own blockchain could mean cheaper or free gas with all of the upsides to using ethereum and an added customization ability. If this is true, then the price increases in ethereum have been unfounded.
- wideem 9y ago
  Other companies use private ethereum blockchains. The worst part is that Ethereum community called Ripple a scam coin because banks don't actually use it for transactions but they didn't care to realize that ethereum is the same

149 points by bpierre 9y ago

Could someone that understands crypto better than me explain why Bitcoin's fees and transactions times have become so high all of a sudden? Is it just a matter of network congestion, or does it have as its root some underlying mathematical factor instead? Hoping to get a better answer here than on reddit. /r/bitcoin and /r/btc are both biased echo chambers.

JohnJamesRambo 9y ago
The miners only process transactions that have higher and higher fees. This makes lower fee transactions take forever to be processed or never happen at all. Since bitcoin limits how many transactions that can occur in a set amount of time it creates this awful fee-based backlog. The self-serving and shortsighted bitcoin community has argued and bickered amongst itself so long about how to fix this that it may be too late now.
- opportune 9y ago
  Is this a conscious decision on behalf of the miners themselves, or is it a result of mining becoming increasingly more difficult?
  - JohnJamesRambo 9y ago
    My understanding is that it is fueled by greed and desire for short term gains at the expense of bitcoin health in the long run. The people involved aren't the most admirable folk. For instance, this is the leader of the biggest mining company- https://twitter.com/jihanwu/status/731902686379933697?lang=en https://twitter.com/jihanwu/status/731902686379933697?lang=e... A good contrast is that Vitalik Buterin, one of the founders of Ethereum recently said the gas fees for Ethereum are too high (they were still quite low compared to bitcoin) and the miners voluntarily just lowered the gas fees, which determine the transaction costs. It seems to be a very different community running each currency.
  - plokiju 9y ago
    the miners are running software that decides which transactions to include, and I'm sure the software has some logic where it will pick the highest-fee transactions when they can't include them all
  - nas 9y ago
    The limit on transactions per second is a function of the block size, currently 1 MB. Based on what the miners say, they would be interested in increasing the block size. Understand that the miners like high fees but they like high bitcoin prices even more. The fees are only a fraction of the block reward. If the system becomes too expensive then the miners will lose a lot more than just some fees. The 1 MB limit is set by the bitcoin software. The software that most everyone runs is developed by a group called the "bitcoin core". That group has mostly been taken over by the company Blockstream (this is my opinion, others would argue the team is diverse and not controlled by any one company). Blockstream's business is based on off-chain transactions (i.e. the Lightning network). It is in Blockstream's interest to get a feature that enables Lighting into the Bitcoin software (SegWit). Miners have been refusing to upgrade. One theory is that SegWit will disable a special optimisation that one of the biggest miners uses (ASCIBoost). In any case, Bitcoin core team refuses to increase the block size and the miners have been refusing to enable SegWit. The SegWit upgrade is a good thing, IMHO, even though it seems like a pretty complicated feature. Having the ability to open "payment channels" and make cheap transactions off the main chain would be great. However, I feel that a block size increase to 2 MB or 4 MB is long overdue. I don't understand all the technology issues so maybe there is some really good reason not to do it. It is clear to me that Satoshi (founder of Bitcoin) and Gavin (previous leader of Bitcoin core group) felt that the block size could be scaled to keep fees low. Both software improvements and hardware/network improvements would progress quickly enough to scale with demand. The current core team does not think so and think off-chain transactions are the only way to scale now.
zachaller 9y ago
There are a few things that contribute to this bitcoin has a block size of 1MB and they only add new blocks every 10min. There are only so many transactions you can fit in that block size. The other thing is as the block reward gets half'ed miners will ask for more fee's as well as miners will mine blocks with higher fee's first. So as a way to combat some of the congestions people increase the amount of fee they are willing to pay to get included into a block faster.
plokiju 9y ago
Early on in bitcoin, a 1MB limit was added to the block size, which puts a cap on the number of transactions that can be included in each block. Now that bitcoin is more popular, there are more transactions then can fit in each block, which means miners will only include the transactions that include the highest fees. There are a number of ways to solve this (the easiest being expanding the block size), but the community is split on the best way forward, so the congestion is getting worse
marcell 9y ago
Bitcoin blockchain has a limit of 1MB of transactions in a block. This was set in 2013, when Satoshi put it in place. He didn't give much explanation for it, but it was probably to avoid a spam attack. He said it could be raised later: https://bitcointalk.org/index.php?topic=1347.msg15139#msg15139 https://bitcointalk.org/index.php?topic=1347.msg15139#msg151... There are arguments for and against increasing the blocksize. For: - Support more transactions per second - Lower fees for users Against: - Hardfork requires all full node operators to upgrade, or they could see incorrect balances - Lower fees mean that miners make less money Also, generally, there are some philosophical differences between the sides. The big-block side usually wants bitcoin to be more like a payment network, wherease the small-block side typically views it more as digital gold and store of value.
- zby 9y ago
  "Lower fees mean that miners make less money" - not really. There are two mechanisms: 1. The congestion would mean bigger fees 2. In bigger blocks there will be more transactions - so more fees in the block The most probably cancel each other. Actually the big miners seem to be in favour of the Bitcoin Unlimited big blocks. What they want to stop is SegWit which is needed for scaling bitcoin off chain with Lightning etc. There is a conspiracy theory about that - and it actually makes sense to me - which is that SegWit would eliminate ASICBoost (which is an optimization technique that is implemented in some ASIC miners). But there is also another narrative that Lightning would mean banking entering the Bitcoin community - and that is why it should be stopped. Bitcoin can never become a good payment processor - this would require many orders of magnitude bigger blocks (now bitcoin can process about 7 transactions per second, VISA can process 50K transactions per second). And while storage for bigger blocks grows linearly - the other algos have probably worse complexity.
- Obi_Juan_Kenobi 9y ago
  > This was set in 2013 Wrong date, it was July 2010 I believe.
drcode 9y ago
There's a discontinuity in transaction pricing caused by the fact that Bitcoiners are hitting a hard 1MB limit on the blockchain. It's kind of like the situation with airliners: If there are empty seats left, it's cheap to add another flier. However, once the seats are all taken, it gets extraordinarily costly to get another passenger on board, to the point that they have to violently evict someone to make a spot available.
Obi_Juan_Kenobi 9y ago
This is a reasonable start: https://en.bitcoin.it/wiki/Block_size_limit_controversy https://en.bitcoin.it/wiki/Block_size_limit_controversy First, most people want Bitcoin to scale such that more people can use it. This can be done directly on the blockchain by allowing more transactions to be recorded in each block. Or it could be done with '2nd layer' solutions that periodically resolve on the Bitcoin blockchain. Such solutions require some changes to the Bitcoin clients people operate; the current 'most popular' version of this is called Segregated Witness, aka SegWit. Right now, more people want to create transactions than can actually do so, thus a fee market has formed to get transactions included in blocks. This is why fees have increased. It's a debate that sounds like a technical detail, but in reality it goes straight to the core of what Bitcoin is and how it will work. There is the debate over what changes will be made, but there is also a debate about how this decision will be made. Some feel that all changes to the Bitcoin protocol should be made with strong consensus, a conservative approach that has worked alright up to this point. Some still hope that this can be done, but the deep ideological division that belies this debate makes that seem unlikely. The alternative view is that Bitcoin is designed to handle these disagreements naturally by hard fork. A hard fork is a split of the Bitcoin blockchain into different incompatible chains. In this case, it would be a split over the maximum permissible block size; one group would allow larger blocks, and another would refuse them. This would lead to a situation where miners choose which chain to mine on. Miners are incentivized by mining rewards (coinbase rewards), and thus have an economic incentive to mine on the chain they believe will have the greatest market value. This will likely result in a positive-feedback mechanism where one chain dominates the other; this has played out on the Ethereum chain where 'classic' ether is worth far less. A stable split is also possible, and thus there would be two versions of Bitcoin with different rules. Any coins generated or transacted pre-fork would be valid on both chains, but post-fork would commit to one chain or the other. As for the bigger blocks, it comes down to predicting how the network will behave with larger blocks. It would permit more transactions, without question. It would also increase the bandwidth and data storage requirements of full-node operators. Basically, it would be more expensive to operate the Bitcoin network (which is distinct from the cost to secure it, which is scheduled coinbase inflation and txn fees). It would also mean that miners that are closer to each other on the network (via latency and throughput) would have a competitive advantage as they would confirm each other's valid blocks more quickly, and thus there are concerns about miner centralization. Such centralization presents a point of failure for the network. Make no mistake; it is very difficult to predict what will happen with different protocol parameters. There's a lot of game theory that you can do to try to understand it. For instance, miners may mine larger blocks to include more transactions, and thus transaction fees, but risk slower propagation of their valid block through the network. In the case of valid blocks being found at the same moment, the one that propagates faster will 'win' and the other will be orphaned. Some argue that the risk of orphaned blocks is an effective limit to blocksize, and thus no blocksize limit is needed. It would also peg transaction fees to the marginal risk of a block being orphaned.

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yellowapple 9y ago

"In a world where people are used to online payments being confirmed instantly, Bitcoin transactions can take anywhere from tens of minutes to several hours, depending on how busy the network is." Online payments (via traditional means) are by no means "confirmed instantly". The authorization happens more-or-less instantly, but that's only the first of multiple steps in the transaction process; the actual transfer of funds often takes at least one business day, if not more.

ssharp 9y ago
For someone buying something, authorization is all that matters.
- yellowapple 9y ago
  Kind of. It's at least the part that matters if you want to walk out of the store with your merchandise. It's not the part that matters on your card statement, though.
theptip 9y ago
There's two ways of interpreting "online payments" here. Through the lens of ACH/wire payments, your point is spot on. However, I suspect the author meant Venmo/Paypal etc.; that's certainly how I interpreted the sentence. I'd argue that those services are better comparisons for P2P payments, especially in the US, where most consumers are not able or inclined to give out their bank information to receive an ACH payment. Compared to those incumbent online P2P payment services, Bitcoin really is starting to lag behind in that regard.
- yellowapple 9y ago
  "However, I suspect the author meant Venmo/Paypal etc." And my remark is still applicable there, since they're basically just frontends to the traditional ACH/wire payment system (at least in the case of Paypal; I haven't used Venmo much, so I'm not as familiar with how it works). Unless Paypal is paying the seller before receiving actual funds from the buyer, I'm not really seeing how this would be any different of a situation.

Tommek 9y ago

So a guy from a company selling Ethereum is telling us why it's better then the stuff they've copied?

dpc_pw 9y ago

The whole reason why Ethereum is "outpacing" Bitcoin is easiness of taking money from clueless "investors" that feel like they missed the boat on becoming rich through Bitcoin. https://medium.com/@WhalePanda/i-was-wrong-about-ethereum-804c9a906d36 https://medium.com/@WhalePanda/i-was-wrong-about-ethereum-80... It's going to be a big mess, one this bubble pops.

agumonkey 9y ago
Not so fast, it's not "only" a bubble.
- kgwgk 9y ago
  You're right, there are several bubbles.
  - agumonkey 9y ago
    That's not what I meant, but I can't say more right now.
    - kgwgk 9y ago
      I know. I was joking and I can't say that I didn't deserve the downvotes.
gfodor 9y ago
People have been expecting the crypto bubble to pop for almost a decade now, but prices continue to rise. At some point you have to admit that this isn't tulip bulbs.
- res0nat0r 9y ago
  Sounds like the argument folks were trying to make about the housing market, and we know how that turned out.

pdog 9y ago

It's pretty clear what's happening. Ethereum (ETH) is rising because people are buying into initial coin offerings (ICOs). They aren't holding ETH, so they don't care about the price of ETH rising in terms of Bitcoin (BTC) or dollars. The ICOs are the significant holders of ETH. They haven't sold their ETH because 1) the price of ETH is still rising rapidly, 2) they don't yet need to access the funds for development, and 3) smart contracts connected to token sales usually allocate ETH for future use. Eventually, ICOs will begin to sell or distribute their ETH to fund the development of their projects.

JohnJamesRambo 9y ago
I don't think that is true at all. Most people can't even get in on the ICOs.
- mtgx 9y ago
  It's not about "most people," it's about "most cash." The "whales" are buying ICOs left and right, and dumping their Bitcoin/other altcoins. That's the main reason for ETH's rise. Eventually some of these ICOs will prove to be scams, or will get hacked with catastrophic results, and ETH's price will fall again. It doesn't necessarily mean it won't rise back-up again, but by then we'll just have to see if ETH is still a top 2 coin to get.
  - JohnJamesRambo 9y ago
    Ok show me data on what percent of the market cap is from ICOs. Bancor's recent debacle raised 150 million and that is the largest ICO yet. Ethereum has a 36 billion market cap as far as I know.
    - krrrh 9y ago
      It's a question of liquidity, not of "market cap".
  - koolba 9y ago
    > Eventually some of these ICOs will prove to be scams, or will get hacked with catastrophic results, and ETH's price will fall again. s/some/most/

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pazimzadeh 9y ago

Between this and Fred Wilson's recent comments, it's pretty neat seeing a meme take shape right before our eyes. I'm not saying this article is wrong, but that it offers little substance. My pet theory is that Ethereum will transiently surpass Bitcoin in market cap in the next weeks, triggering a 5x surge in Bitcoin's price. Ethereum will then follow, and what happens next is anyone's guess. Why do I think that? Uh..heuristics.

aaron-lebo 9y ago
Why is Ethereum's price rising? It's because of breathless articles like this. It's a self-fulfilling prophecy. Wonder how much this guy has invested? If those dapps are so great, why isn't there a single one that regular people are using today?
- DiNovi 9y ago
  You could say that about the internet 30 years ago...
  - root_axis 9y ago
    And? You're remarking on a surface-level resemblance to the greatest communication and economic innovation in human history. It's a disingenuous comparison.
    - Jenya_ 9y ago
      Judging by the size of financial industry, the electronic money which could be programmed to do things with money without human help 24 hours per day is a serious threat to many companies in finance.
      - root_axis 9y ago
        > do things with money without human help 24 hours per day This was already possible before cryptocurrencies, hence how I'm able to buy anything online at any time of day and have it delivered to me within 24 hours.

qeternity 9y ago

Why Ethereum's price is outpacing Bitcoin - FTFY The pace of adoption leaves much to be desired. And if you think bitcoin is hard for the layperson to understand, ethereum is a whole other can of worms.

headcanon 9y ago
Ethereum's adoption has already surpassed Bitcoin's with several metrics: number of transactions, trading volume, mining reward, and number of nodes. ETH also has ~80% of BTC's market cap. True, it does not have the name recognition that Bitcoin has, but its not just a price bubble that is driving this. This site has real time updates as to the status of the "flippening": http://www.flippening.watch/ http://www.flippening.watch/
- aaron-lebo 9y ago
  Every single one of those metrics could be driven by speculation, they don't say anything about real-world adoption.

maxxxxx 9y ago

Isn't that basically a currency with hyper-deflation? Shouldn't a currency be relatively stable to be useful for payments?

aakilfernandes 9y ago
Absolutely agree, and Ethereum is a great platform for building those stable currencies. Check out Stabl and Maker for two orgs trying to make this happen. But its also trivial to issue fiat-backed tokens on Ethereum (at least from a technical PoV). See Digix who is doing this with Gold.
floatboth 9y ago
Might be more stable when they switch to proof of stake though?

Taek 9y ago

> Ethereum has raced ahead with technology that not only does everything Bitcoin can do faster, in higher volume, and at lower cost — it does a lot more besides. Statements like these frustrate me, because they paint a picture as though Ethereum is a strict upgrade to Bitcoin, without depicting the many sacrifices that Ethereum has made to get its advantages. The word blockchain in general has completely changed meaning - no longer does it specify systems where there is no trust involved, instead it specifies systems that create a high interoperability between money and applications. There's a huge difference in the security and decentralization model of Bitcoin and Ethereum. Bitcoin has no central leadership, actively rejects the pursuance of one, and works hard to build a network that simply can't be attacked. Ethereum on the other hand has a powerful central leadership, and moves faster and does things that are in general far less secure. When they hit road bumps like the DAO attack, the 'Spurious Dragon' chain split, or other major network events, they fall back on their central leadership to resolve the issue quickly. That's really not decentralized, and it's completely different from the vision that Bitcoin originally painted. It's a completely valid model, and it's a step up from using a fully centralized platform like the Google Cloud, but ultimately the Ethereum foundation and surrounding leadership has the ability to push through controversial changes, something that is strictly rejected by the Bitcoin philosophy. It's also not clear what will happen if someone like the US Government leans into the Ethereum Foundation asking for things like capital controls. Bitcoin doesn't have a leadership for the government to lean into - it's going to be a lot harder to add captial controls to Bitcoin than to Ethereum. Depending on who you are, that's either an advantage or a disadvantage, but at the very least it's a very clear distinguisher. For that reason, Bitcoin is far more interesting to me as a technology. It's the first and really only, technology that allowed something like a monetary system to stand completely independent of a leadership or a governance structure. Ethereum hasn't achieved the same thing, that much is made obvious by the fact alone that they don't know what the core consensus algorithm of the network will be in 18 months (maybe it will switch to a yet-undefined Proof-of-Stake, maybe not). Don't get me wrong. Ethereum is doing interesting things. They've completely changed the way people thing about money and applications, and made it possible to apply money to everything. But it's far less secure, and it Ethereum today simply wouldn't work without its central leadership. To me, that makes it not much different from any other technology out there - its giving us new and more efficient ways to do things that we have already been doing. But anybody who thinks that Ethereum is a strict upgrade to Bitcoin has completely missed the point, because Ethereum does not have the core value proposition that Bitcoin provides. Bitcoin is a complete financial system that you can use without needing to trust anybody. Not the developers, not the miners, not the government. Bitcoin is extremely impressive, and definitely is a technology in a class of its own.

root_axis 9y ago

> As a “hard fork” looms, which looks set to split Bitcoin into two separate currencies that will have to fight for custody of the Bitcoin moniker This already happened to eth when the creators hard forked the chain in an effort to roll back operations of an eth application that was used in a way that the creators did not anticipate. If this didn't kill ethereum why would it be a problem for bitcoin? Fortunately for bitcoin, there isn't a highly influential and transparently self-interested creator lording over the project. > Bitcoin transactions can take anywhere from tens of minutes to several hours, depending on how busy the network is. An unsolved growth problem for the reining incumbent that remains unsolved by ethereum. Transactions take a long time because decentralized proof of work verification is slow. A lot of people will say "proof of stake is coming!!!" but it's essentially vaporware and all signs point to the conclusion that it will remain that way for the foreseeable future. Yeah, people are working on it, like all vaporware. > Ethereum is actually a platform for new kinds of decentralized (often financial) applications (dApps) that run on a peer-to-peer network of computers Except this isn't actually happening in practice. I am yet to see any "new kinds of decentralized applications", just toy applications that have no practical purpose besides internet roulette > TL;DR: Bitcoin’s dominance is slipping because its utility is limited and weakening versus other more recently developed, less politicized cryptocurrencies. Bitcoin's dominance is not slipping because it's utility was marginal to begin with and eth certainly doesn't offer much in the way of compelling improvements over bitcoin.

aaron-lebo 9y ago
Indeed, it's interesting that existing applications are never cited, it's always future potential. Sounds like a great way to kick the can down the road. Invest now! Someday the network is gonna be really useful. You'll see!
- 52-6F-62 9y ago
  Skepticism in this realm is certainly warranted and undoubtedly healthy. However, I think I should share this because the above two comments seem to have not caught wind of it. A number of enterprise-level organizations both within and without this org are working on projects and experiments both utilizing the public blockchain and private chains using the technology. I think there is some validity to the project that is simply not yet mainstream yet. https://entethalliance.org/members/ https://entethalliance.org/members/

cap3 9y ago

the only way to be in on ether is to hold it. That's true for individuals and for large institutions joining the Enterprise Ethereum Alliance. Behind the scenes, large institutions are buying up Ether and anticipating that it will become a part of the financial system (either that or it will become a shadow financial system, and they are therefore incentivized to be early adopters). There's no way to short ether or bitcoin. Everyone who is in is long. dapps don't do much right now (and there's a lot of writing about ponzi scheme dapps), but this is very early days and the flexibility of the ethereum platform is just starting to be fully understood. The article is right about the limitations of the bitcoin blockchain. Some commenters here are right about pieces like these being great advertisements for the platform and driving more buying. 1 Ether > $1000 USD in a matter of months, if not weeks.

polskibus 9y ago
Do you have a citation for large organizations buying up ether? I only came across articles mentioning corporations forking ethereum code and testing it out for other purposes.
- headcanon 9y ago
  https://entethalliance.org/members/ https://entethalliance.org/members/
  - polskibus 9y ago
    Where does it say they are buying up ethereum?
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dahdum 9y ago
"There's no way to short ether or bitcoin" Incredibly untrue, many exchanges and a couple derivative platforms allow this. I haven't the chutzpah to short crypto, but plenty of people do.
9y ago

cdrark 9y ago

Research the exchange Poloniex. They have played a major role in the creation of tens of billions USD in "value" in altcoins over the past 2 months. There is zero transparency on their operations or ownership or supposed licensing.

DiNovi 9y ago
Polo Exchange is sketchy; but Ether is on many, many exchanges now

Animats 9y ago

This is an ad. "Jack du Rose is a cofounder of Colony, an Ethereum-based operating system for open organizations." Whatever that is. (It seems to be a scheme for monetizing StackOverflow rankings.[1] Or something like that. If it even exists. The web site is all pretty pictures with no content.) Most altcoins crash after a while. See Coin Market Cap.[2] [1] https://colony.io/ https://colony.io/ [2] https://coinmarketcap.com/ https://coinmarketcap.com/

dreamdu5t 9y ago
I signed up for the mailing list a year ago, and I don't think they've ever offered me access to their alpha. They've been around for 2+ years and don't seem to have a product that's accessible yet. EDIT: looks like they do now: https://blog.colony.io/colony-beta-product-summary-2121a357d61d https://blog.colony.io/colony-beta-product-summary-2121a357d...
JohnnyConatus 9y ago
I don't have access to the beta (yet) but friends do, and it is a legitimate product. They also have a slack channel where they're happy to answer questions.
whazor 9y ago
Colony is a well known organisation in the Ethereum community. Giving presentations on multiple devcons of Ethereum. Knowing that they have been around for a while gives him the authority to share his opinion.

jraines 9y ago

The ICO mania definitely contributes to this, but so does the worry about a Bitcoin split. I've read a lot about it and could not give you a coherent answer of what is likely to happen and what would be the impact if it does or does not happen. So people like me (probably in top 5% of knowledge among Bitcoin holders about the technical aspects) put holdings in other coins to wait and see. The coins that stand to benefit most from this are the ones traded on GDAX -- Ether and Litecoin. And Ether has the most breathless hype going for it right now. And this is the same advice I give to the non-technical people in my life who've jumped in late and don't have a Poloniex or Bittrex account to trade other coins (sign up for GDAX, balance things with a wait-and-see attitude towards August 1st). BTW - my 89 year old farmer grandpa who can't even get wired internet at his house now has a crypto portfolio, in case you're looking for bubble indicators. (And if you ask why my advice wasn't to avoid an investment you don't understand -- well, I am bullish on crypto long term and they really wanted to get in, and view it as a gamble, so . . .)

DiNovi 9y ago
I assume you sold him on the investment tho
- jraines 9y ago
  He sold himself just on whatever is said on Bloomberg etc. And he views it about like laying $$$ on the Georgia Bulldogs to cover against Alabama, so I'm not going to put up a fight.
anothercomment 9y ago
But even with a Bitcoin split, what would be the problem? You would simply double your coins (kind of).
- wyldfire 9y ago
  It would damage the brand of being the premier cryptocoin, having the most marketplace acceptance, secured by the most hashing power. Regarding hashing power -- I don't know; can the UASF and the original chain be merge-mined?

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X86BSD 9y ago

I don't follow the cryptocurrency world much. The last time I tried to really look into all the coins I bought some Monero. Monero seems the most sound technically and cryptographically. Can someone explain to me why one alt coin like etherum gets more attention/value than others? What is it doing that is novel, or makes it more secure, or more anonymous than say Monero?

nemo44x 9y ago

It's simple - Bitcoin is stagnant and full of politics and holy wars where as ETH is implementing everything Bitcoin promised 5 years ago. Bitcoin is facing an existential crisis August 1st (UASF) that some view as liberation and others as extortion. As if BTC wasn't high risk enough! Yes we haven't seen a single ICO that has resulted in anything worth anything yet and we probably shouldn't any time soon. Yes the rise in ETH the last few months is comical. Yes there are plenty of scams out there right now and some we don't even know are scams yet. But it's damn exciting. Anyone with an imagination can see this. It's the wild west and it's fun and crazy. And there's a real opportunity here to do something different. 99.9% of these early things are going to fail but there will be a breakthrough eventually I believe. And when that happens...

drcode 9y ago
Nicely said! And we should add to that that the exciting parts of ethereum may never fully exist in ethereum itself: It's totally plausible that this tech could instead be adopted by another project before becoming wildly successful. However, this doesn't make ethereum tech any less interesting.

F3L 9y ago

I have a question regarding the morality of buying these coins: 1. In buying I provide liquidity and add to the perception they have value. 2. I am aware they are a big Ponzi scheme and vulnerable people may lose money they cannot afford to. 3. However altcoins may be a "too big to fail" Ponzi scheme, which like the property market, will rise seemingly forever. 4. I would rather be on the inside than the outside if it does. I'm on the outside of the property market in the UK after correctly assessing it was a pyramid, but wrongly believing it would crash and not be propped up. 5. Good and vulnerable people might lose their savings because I have enabled a perception that these markets are not pyramid schemes. Please advise.

webninja 9y ago

A lot of articles mention the likes of Intel, Microsoft, Infosys, Samsung, J.P. Morgan etc — are building software using Ethereum or some other blockchain platform. But I wonder if they actually are just forking the code off of Github and creating their own blockchain or ethereum-based Microsoft token, or Intel token for their own internal use and this is being misrepresented by cryptocurrency-owning journalists. It seems to be too risky for big companies to build DApps for the authentic Ethereum when they can't predict that the price of gas won't quadruple again. Creating their own blockchain could mean cheaper or free gas with all of the upsides to using ethereum and an added customization ability. If this is true, then the price increases in ethereum have been unfounded.

wideem 9y ago
Other companies use private ethereum blockchains. The worst part is that Ethereum community called Ripple a scam coin because banks don't actually use it for transactions but they didn't care to realize that ethereum is the same