-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.
Agree 100%. Mutability itself isn't a problem--our financial system does fine with it. But the ad hoc way rules were created ex post facto by parties with unchecked conflicts of interest is, in my view, a permanent black mark on the project.
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.
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.
These are features that run intentionally counter to modern economics.
It is deflationary because strong currencies displace weak ones: Any individual person will want to hold value in a currency that's deflationary; they get greater value from it the longer they hold it. Is that good for the 'economy'? It's a matter of study. But it's the only thing out there that's deflationary (even gold is currently 2%/yr inflation by newly-mined metal). The fact that Etherium chose not to have this is a nod to the economic theories against deflationary currencies. It will help them with economists and politicians, but it works against them in adoption by individuals.
And it works for everyone the exact same way regardless of circumstances. It makes no social judgements. It has no bias. It runs by the rules. Good people can use it for good things. Bad people can use it for bad things. Rich people. Poor people. Oppressed people. Free people. The fact that Etherium broke their own rules makes them flexible in adversity, but it also makes them untruthworthy. Sure a network could always vote to change the rules, but having a culture of doing so means eventually someone with real power (guns and politicians) will make you change it their way.
While both those might help 'mainstream' adoption, mainstream already has money and electronic transfer systems. It'll be easier for them to fix the 3-day hold period with some new laws about 'you must trust X' than to literally move people off the dollar.
Bitcoin is a direct and overt competitor with the world order of money. Etherium is in a tough middle ground; not quite getting the best of either.
Ability for a community to set and agree to new rules is healthy for a blockchain and it makes it more likely that Ethereum can evolve and successfully hardfork to POS mining in the future.
Anyone who claims otherwise is confused or trying to sell you something.
In practice, where some percentage of coins inevitably goes lost every year, this still reduces to a deflationary schedule.
Meanwhile, Bitcoin with its hard limit on coin supply, will likely experience some miner incentive perversions when rewards become dominated by fees rather than coinbase.
If you are into this stuff, there is some interesting research on this: https://freedom-to-tinker.com/2016/10/21/bitcoin-is-unstable...
What features of JavaScript prevent you from writing buggy code?
If bitcoin disqualifies itself through certain failings, second tier contenders hold value through their optionality as an alternative.
Rebuttal: a) This isn't a technological feature/fault of Ethereum. What you really mean to say is that 1) Ethereum foundation broke trust by supporting a fork 2) Most Ethereum users chose to go with the fork.
Technically you can be with ETC (the unforked version of ETH).
b) Bitcoin can be forked too, there is nothing technological safeguard in there in it for it to be not forked, because it's literally impossible to build a technology which can't be forked(unless enforced by the govt).
c) The DAO fork was made possible by a bunch of factors: 1. The money the hacker stole was locked in a contract where he couldn't touch it for 30 days. This bought Ethereum foundation time to do something about it. If Polo gets hacked tomorrow, there is nothing Ethereum foundation can do anything about. 2. ETH is based on accounts model, rather than bitcoin's UTXO model. This means Bitcoin can't go with a fork even if they wanted to even if somehow DAO was implemented in an n-lock transaction for 30 days.
d) Ethereum gets crap for breaking "trust" when as a bitcoin holder I would have totally supported a fork to prevent MtGox or Bitfinix's funds being recovered from the thieves.
The fundamental question which everybody who is pondering over this argument on Ethereum needs to answer is this, "If you're using technology X, and a certain malicious entity/bug has affected a significant majority of the other users of technology X,then would you be willing to make attempts to thwart the actions of the malicious users."
Ethereum people showed that they would prefer such an action. Bitcoiners who don't have any stake in this, love to criticize Ethereumers for this.
By that definition of a 'bug', all bugs work perfectly as designed. I mean what is your definition of a bug then?
The DAO's code allowed a person to ask for money to be taken out before the balance was fully updated, this resulted in the attacker taking money out over and over and over.
This clearly was not the 'intent' of the creators or any of it's investors.
All code has bugs, but you dont go asking Satoshi to give your bitcoins back you sent them to the wrong address. "Oops that was not the intent".
- 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).
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/
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.
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.
As it is, it's currently worth more than I bought it for.
That's a social problem which would be solved by cryptocurrencies.
I can also recommend this podcast on the topic of current real world applications of Bitcoin: http://www.econtalk.org/archives/2017/02/jim_epstein_on.html
Do you have any links or can you explain how people lost fortunes due to inflation? I've read a lot of economics and this is news to me.
It's hard to get a hold of, it's hard to store securely, it's hard to transport, and it's hard to get people to accept it.
If you're really considering gold or Bitcoin, you very likely care about many of those things, and you'll see that Bitcoin has distinct advantages for several of those problems, with a lot of potential to improve.
The problems are central banking and related problems: demonetization, devaluation, hyperinflation, bank bail outs from taxpayers, etc.
For example (in certain parts of Europe, and probably elsewhere too) merchants have to pay a fairly high fixed cost to have credit card terminals in their place of business, and also pay a cut of each transactions to Visa or Mastercard. This is a considerable cost to small business, which have to pass this along to consumers. Now of course most consumers don't use bitcoin or other altcoins to pay for stuff today, however the fact that there's even the possibility of eliminating these types of middlemen is very exciting, and unthinkable even a few short years ago.
Not to mention the very exciting possiblities offered by blockchains and smart contracts, even if the original projects that spawned them fail completely (bitcoin and ethereum).
BTC simply shifts all the cost of dealing with fraud to the customer.
What alleged problem do you think Bitcoin is trying to solve?
Bitcoin is making value transfers cheap, fast and accessible.
As for the third, you've clearly not dealt with wire transfers very much. Dealing with SWIFT for example is infinitely more difficult than using bitcoin.
Cryptocurrency came about as a direct result of a broken political / financial system which effectively rewarded failure and financially punished those who could least afford to be punished.
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.
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?
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.
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.
So I think ETH can be both digital oil (or digital solar, if you want to be PC) and digital gold.
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.
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
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.