Andreas Antonopoulos: Zcash & Ethereum are Complements to Bitcoin, Not Alternatives

Andreas Antonopoulos: Zcash & Ethereum are Complements to Bitcoin, Not Alternatives

Even to this date, the majority of developers, traders, investors and users refer to cryptocurrencies and public blockchain platforms such as Zcash and Ethereum as alternative currencies to bitcoin, or altcoins. Many experts including bitcoin and security specialist Andreas Antonopoulos believe Zcash and Ethereum are complements to bitcoin, not alternatives.

At the current stage of development, bitcoin can be described as digital gold with high liquidity and transportability. It still has relatively high fees, long confirmation times and volatility and thus, it is not appropriate to conclusively denote bitcoin as digital cash and settlement network.

Bitcoin could be anonymous and could also offer a flexible and highly functional smart contract-based functions in the future. In fact, there exists multiple pieces of software such as Tumblebit, a two-layer solution, designed to bring anonymity to bitcoin. However, solutions like Tumblebit are in need of basic infrastructure including Segregated Witness (Segwit) in order to be implemented without complications.

The truth is, at the present, bitcoin is not anonymous and it does not demonstrate a high level of flexibility for developers. Although it is secure and robust, it is extremely difficult for developers to launch decentralized applications on top of the bitcoin protocol due to its limited development framework. For this reason, multi-billion dollar corporations, financial institutions and blockchain startups have migrated to the Ethereum network to develop innovative smart contract-based applications.

Most of the startups on Ethereum are garnering the attention of investors worldwide. Most recently, Ethereum-based prediction market platform Gnosis raised over $12 million in its ICO at a valuation of $298 million. Investors and users of Ethereum saw great potential in Gnosis as well as Ethereum as it is one of the few applications that could bring an actual active user base to Ethereum which could justify the $5 billion market cap of Ethereum.

Zcash is also appealing to a wide range of investors and cryptocurrency users who perceive importance in financial privacy and anonymity. In fact, many bitcoin users utilize Zcash and other privacy-focused cryptocurrencies such as Monero to transact with anonymity.

In actuality, cryptocurrencies and assets should be described as complementary currencies to bitcoin, rather than as alternative currencies. As Antonopoulos explained during an Ethereum Q&A session at the Silicon Valley bitcoin meetup held at the Plug and Play Tech Center:

“I'm very interested in both, I have used & run nodes for them, and experimented with the testnet. But not as "alternatives," rather as complements to Bitcoin that specialise. My argument has been that Bitcoin and Ethereum do not compete directly. Many of the characteristics that they have chosen to differentiate in make them unable to do what Bitcoin does. Bitcoin has been doing it longer, so there is network-effect as well. In the short term, they do compete indirectly for the attention of developers and speculative investors; as a technology, they do not compete any more than a lion competes with a shark. It is about choosing platforms that fit a particular niche or purpose.”

altcoins Antonopoulos bitcoin Cryptocurrency Ethereum Zcash