BlogBitcoin vs Ethereum Smart contracts
While Bitcoin is commonly associated with money, it also has a lesser-known but equally important use case — smart contracts. Smart contracts form the foundation of Bitcoin and were first proposed by Nick Szabo in 1995. They are computer protocols designed to execute, verify or enforce contract negotiations or executions, essentially acting as a contract rather than code. Smart contracts enable trusted transactions without third parties and can facilitate self-executing agreements without central authority intervention, providing a safer and more convenient alternative to traditional contracts.
In 2018, Vitalik Buterin (co-founder of Ethereum) expressed regret over using the term “smart contract” for Ethereum’s core functionality. He believes that a more technical name such as ‘persistent script’ would better reflect its nature as an ongoing program execution process. This highlights how even pioneers in blockchain technology have differing views on defining and understanding smart contracts. In this article, we will explore the world of Bitcoin smart contracts and discuss their evolution into an extensive ecosystem built upon the network.
The concept of the Impossible Triangle introduced by Ethereum founder Vitalik Buterin refers to three goals that cannot be achieved simultaneously on a blockchain: decentralization, security, and scalability. Similarly, smart contracts face their own impossible triangle: decentralization, scalability and Turing completeness. While there are many similarities between Bitcoin and Ethereum due to differences in long-term vision limitations; they have become two distinct entities.
Major differences between BTC and ETH chains
The scalability issue has long plagued the Bitcoin chain, and in order to implement the smart contract scheme on Bitcoin, it can be either developed on the Bitcoin main chain or through a layered solution. Recently emerged scalable layered solutions on the Bitcoin chain, such as the RGB protocol, enable rapid iteration of Bitcoin’s smart contract functionality and address the scalability limitations posed by the impossible triangle.
