Gavin Anderson: Ethereum’s rise should serve as a warning to Bitcoin

At least half a year ago, Gavin Andresen, chief scientist of the Bitcoin Foundation and former important maintainer of Bitcoin Core, believed that the development process of Bitcoin was too slow. In a recent AMA in the Chinese 8btc community (8btc.com), Andresen claimed that if the improvement of Bitcoin expansion, especially the increase of block size limit, could not be implemented soon, some potential Bitcoin users might look for alternatives, such as Ethereum.

Finding an alternative to Bitcoin

Anderson was asked in the 8btc community AMA whether it was normal that "more complex" solutions like Segregated Witness and Lightning Network would be prioritized over "simply" increasing the block size limit. Anderson responded that these types of improvements such as Segregated Witness may take more time to implement than directly increasing the block size limit.

He also said:

“The risk with solutions like SegWit is that people may not be patient enough to wait and may turn to something else; Ethereum’s recent rapid attraction of developer interest and its price should serve as a warning to Bitcoin.”

Later, Andresen also voiced his support for Bitcoin Classic, which will increase the Bitcoin block size limit to 2MB via a hard fork 28 days after obtaining 75% of the network hash rate signatures in support of changing the Bitcoin consensus rules. However, so far, miners have chosen to support the expansion route of Bitcoin Core. The network hash rate supporting Bitcoin Classic is only about 5%.

In another part of the 8btc AMA, Andresen even said that if Bitcoin Core continues to maintain a high level of network hash rate support, some startups that support Bitcoin Classic may hedge their bets by supporting other cryptocurrencies. He explained:

“We’ve already seen some companies, like Kraken, start supporting altcoins like Litecoin and Ethereum; if the Bitcoin network doesn’t find an acceptable scaling solution, I think we’ll see more companies ‘hedge their bets’ by supporting other cryptocurrencies that have similar roadmaps to support more transactions.”

It should be noted that Kraken is an exchange, so it should be viewed in a different light than other Bitcoin wallet providers such as Blockchain and Xapo, which have traded a variety of altcoins for years.

Andresen also mentioned the need to create a more friendly environment for new Bitcoin developers in various venues. For example, he said:

“I invite talented programmers from all over the world, including China, to help all teams working on open source Bitcoin software, whether it’s Bitcoin Classic or Bitcoin Core or Unlimited, bitcore, btcd, ckpool, p2pool, or bitcoinj.”

Andresen's views on Ethereum

Although Andresen pointed out that Ethereum’s recent rise is a warning to Bitcoin, this does not mean that he is bullish on blockchains that focus on smart contracts. When Andresen was asked about his views on Ethereum, he said:

“I think the most compelling things you can do with Ethereum are the same things you can do with multi-signature bitcoin transactions.”

One of the most common arguments from Ethereum critics is that despite the fact that there are over 200 decentralized applications currently being developed on Ethereum, there are no meaningful real-world use cases. Andresen clearly supports this view, as he said:

“I haven’t seen a good use case for Ethereum yet.”

Anderson also pointed out a potential security risk with complex smart contracts on the Ethereum blockchain:

“I think there will be a huge problem with Ethereum smart contracts that will lead to user funds being stolen because few people have the necessary skills to tell them whether a complex smart contract is correct or not.”

That being said, standards are currently being developed for Ethereum smart contracts. These standards are intended to make smart contracts easier to review and understand before they are used. In addition, this problem can also be said to already exist in Bitcoin - perhaps to a lesser extent - where users are unsure whether a Bitcoin application or service can safely handle their Bitcoins. There have been several sordid thefts in the Bitcoin space.

Anderson prefers sidechains to altcoins

Anderson said he prefers sidechains to altcoin blockchains. He claimed that he was puzzled by the interest some people have in altcoins that have no technical advantage over Bitcoin, but that there are altcoins, such as Ethereum and Zcash, that are more interesting.

Regarding these ‘more interesting’ altcoins, Anderson said:

“I would prefer them to be sidechains to the Bitcoin blockchain. I think there should be a very good purpose to create a new currency, otherwise it should use Bitcoin.”

Anderson also noted that he would prefer Dogecoin if it could become a sidechain to Bitcoin. He called these types of altcoins a ‘dirty way’ to increase Bitcoin’s 21 million limit.

Specifically with regard to Ethereum, Andresen noted;

“I’m following Rootstock’s project, which is bringing Ethereum smart contracts to Bitcoin.”