Bitcoin vs Ether

housemobilehousemobile Member Posts: 3
From the AMA:

Q: Will ethereum complement bitcoin or will ether be a competitor that will rival bitcoin?

A: Definitely compliment Bitcoin. We are all huge fans of the beast that is Bitcoin and it will be the king for a long long time.
Bitcoin = Cryptocurrency Ethereum = Platform (that cryptocurries can be built upon)
Ether is the currency that is needed to run the contracts. Think of it as the oil that makes Ethereum run.

I assume to run anything on Ethereum you would need ether. To get ether you could either buy it with fiat, convert btc or other crypto to it, or mine it.

If BTC is really the king as you say, it's value should therefore be more than Ether. Do you foresee a time where Ether's value is higher than BTC's? What really is the point of ether? Why can't contracts just be run and paid for with BTC?

For an investment to be worthwhile, assuming you invest in the first week, 2,000 ether > 1 bitcoin. I'm just trying to figure out how ether will create it's value. What are the expectation costs to run a contract on Ethereum? Will it cost something like 1 ether (assumedly dirt cheap) or will it cost a couple hundred ether?

I imagine when ethereum starts off, contracts will be very cheap to run on Ethereum as a platform so it can gain popularity. So really it would be in the best interest of Ethereum to make initial contracts free or maybe just a couple ether to run. This means the value of ether will be very low. I'm kind of rambling, just some concerns I have about making an initial investment.

Thanks for clearing anything up for me.

Comments

  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    Could the value of oil exceed the value of gold? That would hard to measure, and I'll let the economist pick that one.

    Does it make gold less 'useful'? Certainly not.

    To answer your questions regarding feels, the white paper currently lists:

    TXFEE (100x) - fee for sending a transaction
    NEWCONTRACTFEE (100x) - fee for creating a new contract, not including the storage fee for each item in script code
    STEPFEE (1x) - fee for every computational step after than first sixteen in contract execution
    STORAGEFEE (5x) - per-byte fee for adding to contract storage. The storage fee is the only fee that is not paid to a miner, and is refunded when storage used by a contract is reduced or removed.
    DATAFEE (20x) - fee for accessing or setting a contract's memory from inside that contract
    EXTROFEE (40x) - fee for accessing memory from another contract inside a contract
    CRYPTOFEE (20x) - fee for using any of the cryptographic operations

    The above is subject to change in light of the recent developments around ES.
  • housemobilehousemobile Member Posts: 3
    edited February 2014
    So that means if we put the current value of bitcoin at $700, and we invest early and get 2,000 ether, it costs $35 to create a new contract + storage costs. Along with the additional costs that seems pretty pricey.

    It also costs $35 to send a transaction.

    These prices seem about 100x too high to get the platform adopted by the masses.

    edit: and if we don't invest early and only get 1,000 ether per BTC, those costs double.
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    edited February 2014
    Of course not. The base fee value has not been determined yet, and the complications around setting it are discussed at
    http://blog.ethereum.org/2014/02/01/on-transaction-fees-market-based-solutions/
  • roeinyourboatroeinyourboat Member Posts: 2
    The 'x' in "TXFEE (100x)" is not 1 ether, it is 1 'base fee' which hasn't been determined yet.
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