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Why Ethereum Is Outpacing Bitcoin (venturebeat.com)

Posted by msmash on from the eli5 dept.

Even as Bitcoin hits its all-time high, people's interest in other cryptocurrencies hasn't waned, especially Ethereum. But what makes Ethereum popular among some? From an article on VentureBeat: Despite its recent appreciation in value, as a technology, Bitcoin has stagnated over the last three years. Two rival factions have emerged with violently opposing views on what should be done to allow the Bitcoin network to handle more transactions than it can right now. While Bitcoin has been paralysed by indecision, 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. [...] Bitcoin is really only useful as a store of value. Even then, its usefulness for actually transacting value is limited. 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. It's also expensive -- especially if you're only sending small amounts. The average transaction currently costs about $1.50. Ethereum, on the other hand, was never intended as a Bitcoin competitor. Ethereum is actually a platform for new kinds of decentralized (often financial) applications (dApps) that run on a peer-to-peer network of computers. These dApps are designed to disintermediate the kinds of relationships and transactions for which we have traditionally required things like banks, public registries, and the legal system. For technologists, this is exciting stuff, and a vibrant community of software developers has enthusiastically embraced it. Hundreds of projects, startups, and companies at every scale -- including the likes of Intel, Microsoft, and Samsung -- are building software using Ethereum.

14 of 150 comments (clear)

  1. Answer: Marketing by Anonymous Coward · · Score: 5, Insightful

    Seriously, please stop the virtual currency spam.

    Yes, I get it: 1% of /.ers had high end gaming rigs back when Bitcoin first started, so some old /.ers are Bitcoin Millionaires and want to dump their coins. But the other 99% of us aren't Bitcoin Millionaires, and we're getting really tired of this shit on the frontpage all the time.

    #FuckThe21stCenturyTulipFarmers

    1. Re: Answer: Marketing by supremebob · · Score: 2

      At this point, Bitcoin is so difficult to mine that only people with "mining farms" with dedicated equipment and cheap electricity in China can make a profit at it.

      Ethereum is still relatively new, and can still be profitably mined with a gaming rig filled with high end AMD video cards. It makes sense the miners would switch over to the latest cryptocurrency that gives you the best profit.

      Back when I used to do mining, I went from Bitcoin to Litecoin to Feathercoin (remember that worthless crap?) because I could make a couple extra bucks a day mining it. I didn't give a damn what it was being used for, I just wanted to convert it all to Bitcoin as fast as I could so I could get gift cards with it.

      I got out of the mining game when the IRS stated that cryptocurrency mining was taxable income, because I didn't want to be bothered with the paperwork come tax time. My profit margins towards the end were razor thin anyway.

    2. Re: Answer: Marketing by Applehu+Akbar · · Score: 4, Insightful

      Looks like somebody is salty they didn't buy any bitcoin back when it was worth $1. If it helps you get over your rage neither did I. I sure did buy a lot of Ethereum at $1 though ;-)

      Or they DID buy Bitcoin back when it was $1, but subsequently had their exchange hacked and drained.

  2. Slashdot: PR flacks by Anonymous Coward · · Score: 2, Insightful

    Can we stop reposting press releases verbatim? VentureBeat has been a shill site since its inception.

    1. Re:Slashdot: PR flacks by Anonymous Coward · · Score: 3, Insightful

      Someone at /. clearly has a lot of Ethereum coins and isn't happy about the price.

      Why do I keep seeing stories about Ethereum on Slashdot? Stop it already!

      https://slashdot.org/index2.pl?fhfilter=Ethereum

    2. Re:Slashdot: PR flacks by Anonymous Coward · · Score: 2, Insightful

      Well, until they decide to arbitrarily roll back whatever transactions they feel like.

  3. so many statements... by roman_mir · · Score: 5, Insightful

    Despite its recent appreciation in value, as a technology,

    Bitcoin has stagnated over the last three years.

    - 3 years ago I think the price was about 640USD or so, today it's about 2640USD.

    Bitcoin is really only useful as a store of value.

    - value of what? Bitcoin cannot keep value, it can move by 20% up or down in a single day.

    Even then, its usefulness for actually transacting value is limited.

    - all speculative crypto-currencies are of limited value of transacting, as they appreciate they become more expensive to deal with and nobody actually wants them, people want to get some money that is more stable (even though AFAIC USD is inherently flawed and failing as money, it is still more stable in intraday trading so far, it doesn't jump up and down by 20% in a day)

    Ethereum, on the other hand, was never intended as a Bitcoin competitor.

    - of-course not. All crypto-currencies that are not backed by anything exist for the reason of creating inflation in the crypto-currency world (expansion of the money supply), the only real difference is who gets their hands on the newly created coins first. So people who are interested in mining Bitcoins but are too late in that game come up with a different currency of their own, then this repeats. Bitcoin itself may be limited in total number of coins that can be created but the supply of crypto-currencies in general is absolutely limitless. A new one can be started every day (or more often than that).

    Hundreds of projects, startups, and companies at every scale -- including the likes of Intel, Microsoft, and Samsung -- are building software using Ethereum.

    - until they all jump ship to another one.

    --
    You can't handle the truth.
    1. Re:so many statements... by Comrade+Ogilvy · · Score: 2

      In short, the swings in the price of bitcoin are the result of you being born when you were, and not because bitcoin has any sort of inherent instability. If you had been born a few decades later, either you'd see a much larger and more stable bitcoin market, or you'd only ever see the name in the history books.

      That right there is most certainly a "sort of inherent instability" -- the fact it is very easy to imagine the value of all bitcoin going to exactly zero in a manner that few other currencies do not suffer from, except for hollywood scenarios involving flesh-eating zombie hordes. It is easy to badmouth real currencies for being imperfect, because they are imperfect. But real currencies have the advantage of being tied to economies in a manner that gives them some significant degree of inherent stability. Bitcoin is untethered from everything in the universe except faddishness and a weaker-than-fiat promise of deflation, by design.

  4. Drugs and illegal goods by somenickname · · Score: 2

    It doesn't matter which one is technologically superior. The one that will become the most adopted is the one that is most widely accepted for the purchase of drugs and other illegal goods.

  5. Re: Answer: Russians by dknj · · Score: 3, Insightful

    Never change, slashdot. Never change.

  6. We all want to know by Hognoxious · · Score: 2

    Which one does Elon Musk prefer?

    Or if he's busy bilking the taxpayer, umm I mean being entrepreneurial, then ask Bennett Haselton.

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  7. Answer: actually, lots of factors by jamesmartinluther · · Score: 5, Insightful

    Disclosure: I am a contractor at the Ethereum Foundation. We have no marketing department and almost everyone there are researchers and developers.

    Ethereum is simply growing. Who cares if it is outpacing Bitcoin? Bitcoin might be as big as it needs to be, and if not, more people will adopt it. Forget all of the hype, price discussions, its position vs. bitcoin or other technology. Just check out what it can do for you, either as a technologist or just someone using technology.

    Basically, Ethereum offers a vast, shared memory and computation space, secured by cryptography and economics, and this enables smart contracts to run without interference or modification. There are clients enabling users to interact with Ethereum smart contracts, either on their phone or on their desktop. That is all functioning now, and busily powering and even funding dozens of startups.

    Under active development by Foundation devs and the community are some new pieces: sharding, faster and cheaper transactions with state channels, off-blockchain file/data storage, real-time signaling, and a decentralized name service.

    1. Re:Answer: actually, lots of factors by dada21 · · Score: 4, Informative

      This is a bit bullshittish.

      ETH and ethereum are two different things. ETH is a cryptocurrency traded that runs on ethereum.

      But saying "Big banks and entire countries are interested in ethereum" does not mean that they are interested in ETH, which people are investing in.

      A big bank can hard fork the ethereum protocol for their own internal needs and ETH will not be affected. It won't help ETH, it won't hurt ETH, it will be a second protocol fork used by the bank, or country, or private group for their own purposes.

      Don't assume that people interested in ethereum are also interested in buying or trading ETH.

  8. PreMine == Fake Market Cap by Anonymous Coward · · Score: 3, Informative

    Ethereum is getting a lot of attention because developers think they have a new language to code away every problem. Except, as we already saw with the hard fork and creation of Ethereum Classic, a turing complete language that is bound to *real value* is not safe.

    This very important point aside, the devs pre-mined 12 million coins! There are 21 million bitcoins ever. From the start they printed over half of the tokens the bitcoin network has. Then, because actual circulation is low, we have tokens worth $100. Check it out.

    https://etherscan.io/stat/supply
    https://www.etherchain.org/tx/0x9c81f44c29ff0226f835cd0a8a2f2a7eca6db52a711f8211b566fd15d3e0e8d4

    Genesis block makes up still the majority of the network, and they have printed 4.3 times as many tokens as bitcoin will ever have.

    This is a straight Tulip pump built on a dangerous promise. We have already seen them roll back the chain once. This can and will happen again.