Coinbase Co-Founder: Ethereum Could ‘Blow Past’ Bitcoin

In a new blog today, Coinbase exec Fred Ehrsam sought to position Ethereum as a competitor to bitcoin in the digital currency industry.

AccessTimeIconMay 24, 2016 at 8:40 p.m. UTC
Updated Apr 10, 2024 at 2:51 a.m. UTC
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In a sweeping, 2,500-word blog post today, Fred Ehrsam, the co-founder of one of the best funded blockchain startups, Coinbase, took aim at what he called a "stagnant" bitcoin community that he characterized as being outperformed by innovators working on the Ethereum network.

Coinciding with the rebranding of the Coinbase exchange and the launch of trading for Ethereum's blockchain token, ether, the public comments are the latest sign that Coinbase leadership remains dissatisfied with what they perceive as a lack of progress among bitcoin’s developers and with the technology as a whole.

In the post, Ehrsam sought to position Ethereum as a possible competitor to bitcoin, indicating his belief that the competing protocol could "blow past bitcoin entirely".

Ehrsam wrote:

"There is nothing that bitcoin can do which Ethereum can’t. While Ethereum is less battle tested, it is moving faster, has better leadership and has more developer mindshare. First mover advantage is challenging to overcome, but at current pace, it’s conceivable."

The statements follow months of tensions between the once fast-growing startup and the bitcoin community, which found CEO Brian Armstrong often calling vocally for bitcoin developers to increase a limit on the amount of data that could be included in blocks on the bitcoin blockchain.

Armstrong sought to position this inaction as a limiter of growth on the network as a whole, a position that showcased the divisions between bitcoin developers and its business community that saw this as a roadblock to new customer onboarding.

Still, Ehrsam sought to position Ethereum as moving the development of "digital currency" and its technology forward, emphasizing that Coinbase intends to support both protocols, and that it sees them growing together to become “low-level protocols” in what could be a new Internet for value exchange.

"Competition and new ideas create better outcomes for everyone. Even if Ethereum goes up in flames our collective knowledge in digital currency will have leveled up significantly," Ehrsam said.

The comments drew some notable commentary that characterized Coinbase’s statements as perhaps being the result of issues it faces as a venture-backed startup, with a former business development executive at the company tweeting:

“Important to remember: bitcoin has infinite patience and no burn rate. Take individual perspectives with a big grain of salt.”

Lack of growth

Though Ehrsam lauded the success of the bitcoin network, his blog post was sharply critical of the developer community and business ecosystem that has thus far developed around it.

In particular, he questioned why only "infrastructure apps" have been built on the bitcoin blockchain, drawing attention to the idea that seven years into its development, the digital currency had produced no "killer apps".

Ehrsam sought to position this as the result of bitcoin’s limited scripting language, though he acknowledged that this was intended by its design.

"My theory has been that the scripting language in bitcoin — the piece of every bitcoin transaction that lets you run a little software program along with it — is too restrictive," he wrote.

Likewise, he framed Ethereum as more friendly to those who want to develop blockchain-based applications, calling the level of app development in the community "already faster than bitcoin’s".

Coinbase developers, he said, have been able to use the platform to build simple apps in just a few days, a data point he contrasted to the difficulty of performing a similar feat on the bitcoin network.

"I cannot overemphasize enough how important this combination of full programming functionality and ease of use is," he continued.

Superior development

Ehrsam further framed Ethereum as empowering a new generation of developers, in part, due to what he termed a "healthy" core development team that he sees as encouraging collaboration.

In particular, praise was given to Ethereum inventor Vitalik Buterin, who Ehrsam lauded as seeming comfortable as a community and technical leader.

Ehrsam went on to contrast this with the bitcoin developer community who he sought to characterize as both divisive and a contributor to the loss of interest in the platform.

“Beyond a leadership vacuum, bitcoin’s ‘leadership’ is less clear and toxic,” he said. “The content on the bitcoin discussion boards feels like squabbling while Ethereum’s is talking about relevant issues and new ideas.”

Ultimately, Ehrsam’s most pronounced criticism was that the Ethereum perhaps has momentum on its side, as he said the network is making "faster and more consistent" technical progress than bitcoin.

In the end, however, Ehrsam sought to portray the technologies as moving toward the same set of goals, at once welcoming Ethereum into his definition of “digital currency” while stating he has “no allegiance” to any particular network.

Ehrsam said:

"Taking a step back, it feels like the rate of change in digital currency is accelerating."

Image via Twitter


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