![]() More concisely, at the start Counterparty used the Bitcoin opcode OP_CHECKMULTISIG to include Counterparty related data into the Bitcoin blockchain. The system works by using parts of Bitcoin transaction data and using this in the Counterparty protocol, as a function, such as creating a token, sending a token or a market bid on a token on a distributed exchange. Counterparty is a protocol layer on top of Bitcoin that enables features such as new token creation and the trading of these tokens on a distributed exchange. This seems to have primarily occurred in around March 2014 and what happened in that period is the subject of this piece. At the same time, promoters of other chains, such as Ethereum may have exploited and exaggerated this apparent stance from the Bitcoin developers, to help their new chains gain traction.Īs we mentioned in our September 2020 report, towards the start of 2014, Counterparty launched. Some Bitcoiners and Bitcoin developers simply did not want this type of activity on the Bitcoin blockchain and they successfully discouraged it. All of the above did have an impact, however their impact is often overstated in our view. Bitcoin choosing a more conservative blocksize constraint than Ethereum, resulting in potentially higher fees on Bitcoin. Ethereum’s faster blocktime, making Dapps more user friendly, or iii. Ethereum’s more flexible native scripting language making it easier to build Dapps, ii. There are of course several reasons for this, such as: i. We have often been asked the question: Why are Dapps such as distributed exchanges typically on Ethereum rather than Bitcoin? After all, it is certainly possible to build Dapps, such as distributed exchanges, naming systems or alternative tokens on top of Bitcoin. We conclude by arguing, whether one likes it or not, that it was the culture in the Bitcoin development community in 2014 and the negative view of using Bitcoin transaction data for alternative use cases, which played a major role in pushing developers of these Dapps onto alternative systems like Ethereum, along with other factors. ![]() We explain the history of OP_Return usage and sidechains in Bitcoin. This was sometimes called “The OP_Return Wars”. We examine a debate about whether and how a Dapp protocol called Counterparty should use Bitcoin’s blockchain. Abstract: In this piece we explore why Dapps are typically built on Ethereum rather than Bitcoin, which takes us all the way back to March 2014. ![]()
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