Are Bitcoin And Ethereum Competitors?

Ethereum and Bitcoin are not competitors. They have important differences.

Ethereum represents a different set of innovations than Bitcoin. Ethereum set out to create a “Virtual Computer” where distributed participants put businesses on a blockchain through programmable contracts, called smart contracts. Bitcoin was designed as a transfer system.

For the most part, people view Bitcoin and Ethereum as potentially symbiotic technologies.

Nathaniel Popper’s piece in New York Times, entitled  “Ethereum, a Virtual Currency, Enables Transactions That Rival Bitcoin’s,” does not sound as divisive as the title. In the article, Popper backs off that notion. He highlights instead of the novel nature of Ethereum, while also cautioning how untested the technology is. 

But Ethereum has also won fans with its promise to do much more than Bitcoin. In addition to the virtual currency, the software provides a way to create online markets and programmable transactions known as smart contracts.

Many Bitcoin advocates say Ethereum will face more security problems than Bitcoin because of the greater complexity of the software. Thus far, Ethereum has faced much less testing, and many fewer attacks, than Bitcoin. The novel design of Ethereum may also invite intense scrutiny by authorities given that potentially fraudulent contracts, like the Ponzi schemes, can be written directly into the Ethereum system.

Nasdaq also released an article entitled, “Bitcoin’s Rival: Ethereum’s Rapid Rise.” In it, Martin Tillier doesn’t so much make that argument, as much as use the headline for clickbait.

While Bitcoin does transactions and value transfer well, Ethereum economic arrangements are determined by a distributed program.