One question Ryan X. Charles, blockchain engineer, advisor of various bitcoin startups and the founder of bitcoin blockchain-based content-sharing social media application Datt has frequently received over the past few weeks is, “why not use Ethereum?” For the Datt network and platform?
Today, a vast majority of blockchain and even bitcoin startups are pivoting to the Ethereum network to create smart contract enabled platforms. Bitcoin exchanges, financial platforms and applications have begun to launch a series of applications on the Ethereum network in an attempt to benefit from its advanced protocol and features.
While an increasing number of newly emerging startups gear towards utilizing the Ethereum network, reputable and established bitcoin companies including Blockstream, 21, Onename, and OB1 have been working around the bitcoin network, developing new codes, applications and features to improve their platforms. Charles explains that startups currently have three possible choices to make:
- Co-offer Ethereum and Bitcoin support, increasing technical complexity to the platform
- Completely switch to Ethereum and terminate bitcoin operations
- Work around the Bitcoin network by solving difficult problems and designing complicated but secure systems.
One major disadvantage for startups either adding Ethereum support or completely switching to the Ethereum network is, although the Ethereum is more sophisticated and advanced in terms of technology than Bitcoin, its economy is much more limited and as Charles explains, “is less useful.” Bitcoin in contrast, is the first and only killer application build on the blockchain technology that has proven to offer real-world value as an actual currency and medium of payment due to its security.
Furthermore, as Andreas Antonopoulos emphasizes, the Ethereum network will run into the same scaling problems as the bitcoin network in the near future, as the user base increases. Although the Ethereum network is Turing-complete and has solved one limitation of the scripting language built into bitcoin, its lack of economic benefits will ultimately backfire on its developers and users.
“And since bitcoin has a larger economy and a longer head start on solving these problems, I am not convinced that ethereum, at an ecosystem level, is more advanced than bitcoin or will be able to outpace it,” says Charles.