How will Ethereum interact with Bitcoin?

Just curious as to what this will look like- do you foresee Ethereum possibly replacing Bitcoin? Will it wind up competing or cooperating with Bitcoin?

Disclaimer: please ELI5 as I'm still pretty new to all this. Thanks.


  • GeorgeHallamGeorgeHallam Member, Administrator, Moderator Posts: 229 admin
    edited December 2014
    Bitcoin and Ethereum can most certainly live in harmony so long as they both fill different economic and technologic niches. Bitcoin is useful as a financial tool, but due to the way the blockchain is implemented it's not so good at supporting smart contracts, which is where the Ethereum blockchain excels.

    In regard to whether I foresee Bitcoin being replaced by Ethereum, I don't think so. What I do see occurring is Bitcoin being represented on the Ethereum blockchain in a number of ways, such as via a 2 way peg and by taking a snapshot of the Bitcoin blockchain and allowing holders to redeem Bitcoin tokens based on the wallet information inside the Ethereum ecosystem. Both of these methods allow Bitcoin to interact with a smart contract capable system, enriching it as opposed to competing.

    Hope this helps!

  • nik5ternik5ter Member Posts: 4
    edited December 2014
    The “Let’s get merchant X to accept (insert cryptocurrency) in my town so I can buy (insert everyday object)” paradigm is only a small part of the picture and misses the grander vision, in my opinion. In that paradigm, you are still competing with dollars/euros etc.

    The most exciting thing to me about crypto is that you will be able to use it for things that *aren’t* possible with normal money. (related idea is Do you use your Bitcoins on things your dollars can already buy (sheets from overstock, alpaca socks)? Or on what dollars can’t buy? There’s only one way to pay your taxes. But, there’s also only one way to buy Ether and (insert crypto project here)…..

    There’s a brand new world out there that crypto enables.

    In other words, I don’t see Ethereum displacing “Bitcoin accepted here” at mom n pop stores ever. I don’t see it competing with the dollar or the euro. However the grand vision of ethereum is to build an eco-system - a whole new blue ocean — of apps/technologies/organizations, the kinds of which we have never seen before.

    How big will that new ocean be? Who knows. A bet on ether is a bet on that ocean. But the potential is there.

    edit: formatting
  • petahashpetahash Member Posts: 5
    Vitalik wrote in a recent blog post the concept of inter-chains
    this would likely be the first poc to bring bitcoin to the ethereum network
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