Ethereum vs. Obyte: A Comparison — Or How to Choose the Best One for You

Both of them are computer protocols designed to carry on decentralized functions, mostly with the help of smart contracts and cryptocurrencies. Those functions may include financial transactions, supply chain management, identity verification, customized token creation, and more, all without the need for a central authority —that’s why they’re “decentralized.” But Ethereum and Obyte also have important differences.

Depending on what you’re looking for or even your programming level (that could be zero), one or the other platform would be the most convenient for your needs. So, you can check ahead what are their main similarities and differences and how to take advantage of them. Let’s go!

Open Crypto Projects

This one is a similarity. Ethereum and Obyte are open-source and free projects available for everyone (with programming knowledge) to check and edit. If you don’t have programming abilities, you still can freely use their wallets and apps to the extent of the knowledge of any average Internet user.

In the background, both protocols are mostly developed and maintained by a lot of unpaid volunteers from all parts of the world, gathered via GitHub. However, both Ethereum and Obyte have their own non-profit foundations in charge of fostering the development and adoption of these platforms. These entities use the native assets of these platforms (GBYTE and ETH) to fund themselves and pay for some expenses —main developers, marketing efforts, bug bounty programs, grants, etc.

Their teams aren’t anonymous either, and none of the platforms are very new. Both protocols have well-known founders and developers. Ethereum was released in 2015 by a group of developers led by Vitalik Buterin, while Obyte was released in 2016 (as Byteball) by Anton Churyumov and his team.

Dapps and Common Features

Regarding what they can do, one of the key similarities is their ability to facilitate decentralized applications (DApps) and smart contracts. Both Ethereum and Obyte offer environments for developers to create and deploy these self-executing contracts, enabling a wide range of use cases.

They include decentralized finance (DeFi), which is a whole industry made of payments, loans, savings, rewards, and more. Non-fungible token (NFT) creation and marketplaces are also possible on these platforms. On the other hand, organizations and companies can use the ledgers for supply chain management, identity verification, donations, and more.

Another common feature is their support for tokenization. Ethereum, mainly through its ERC-20 and ERC-721 standards, and Obyte, with its built-in tokenization capabilities, enable the creation of customized digital assets and tokens. These tokens can represent anything from digital money to real-world assets like real estate and securities, providing a versatile framework for digitizing properties and conducting token-based transactions.

Smart Contracts and Tokens

Now, let’s look into the differences. While both platforms offer smart contracts and tokens, they do it very differently from each other. For starters, they operate with different programming languages: Ethereum with Solidity, and Obyte with Oscript. The first case (Solidity) has been known for its complexity and a steep learning curve for developers —since it’s a completely new programming language specifically designed for Ethereum. This may bring a wide array of undiscovered bugs and attacks in contracts written by not-so-skilled developers.

Oscript is also new, but it was designed for the opposite: to make it easier to create Dapps and contracts –in the form of Autonomous Agents (AAs). This language is more transparent, making it easy to understand what is going on in the code and making it hard to make difficult-to-track errors. This way, numerous types of AAs providing various services (e.g., exchanges, stablecoins, prediction markets, etc.) can be created easily and safely.

On the other hand, beyond AAs, smart contracts in Obyte are written in JSON data that can be shown in a human-readable way, which the Obyte wallet does. So, the user can quickly inspect the contract’s rules before interacting with it. The composition of a few common types of smart contracts is also available directly to users, just by filling out forms, with no coding required. That's not the case on Ethereum, where you would need coding knowledge to read and write them.

Custom tokens

Token creation is also different. In Obyte, all assets have the same status and obey the same rules as the native token GBYTE (beyond customized features like amount, decimals, privacy, fungibility, or name). This means that developers don’t have to reimplement basic transfer functions over and over again for every token, and there’s no way these functions can go wrong.

On the other hand, on Ethereum, internal tokens (ERC-20 standard, mainly) don’t work as the native asset ETH. They need to be configured in detail, and users could lose money if they send tokens to a contract that’s not equipped to receive them. Besides, these tokens are  smart contracts themselves, and could be vulnerable to bugs and attacks. To send these tokens to other smart contracts, users need to give access to the smart contract to pull tokens from their wallets, where they’d be partially out of control.

As for the interfaces, in order to send tokens to a smart contract users have to approve that smart contract to spend their tokens. This extra step is not intuitive at all. Meanwhile, in Obyte, users just send the tokens without extra steps.

The creation of smart contracts and custom tokens on Ethereum often requires programming knowledge or expensive external middlemen (like Bitbond or Token Generator). In Obyte, anyone could create their own tokens without complex steps or high additional fees with the help of a chatbot in the wallet or the user-friendly Asset Registry, whose only fees are 0.005 GBYTEs (less than $1). Smart contracts are readable, and anyone can offer them through the wallet as well.

Fees and Decentralization

Obyte tends to be cheaper, faster, and more decentralized than Ethereum. This blockchain uses Proof-of-Stake (PoS) to validate transactions and issue new coins. In PoS networks, so-called validators are chosen to create new blocks based on the number of native coins they "stake" or hold as collateral. This eliminates the need for the high amount of energy that previous Proof-of-Work (PoW) coins like Bitcoin require, but it could sacrifice decentralization –even if that concept isn’t fully achieved in PoW networks either.

Validators with larger stakes wield more power in the network, potentially leading to centralization as those with substantial resources can dominate decision-making. Just like Ethereum, Obyte doesn’t need a lot of energy. But it doesn’t have PoS-like validators either, allowing a higher level of decentralization. Indeed, Obyte isn’t a “blockchain” but a distributed network built with the structure of a Directed Acyclic Graph (DAG). The graph is constructed only by users with each transaction they add. The new transactions link to the previous ones, and they’re registered forever this way. No one can censor transactions.

To prevent double-spending, the Obyte DAG has "Order Providers” who help establish a full order. They’re well-respected individuals or companies that create transactions like everyone else, but these transactions serve as waypoints for ordering all other transactions. They don’t have a lot of power, though, unlike miners or validators. Users remain in full control of their assets throughout the transaction process without having to rely on a select group. Decentralization is much stronger in this system.

The difference in transaction fees is also remarkable. Currently (September 2023), Ethereum has an average transaction fee of around $3 —it’s reached even $196 in the past, though. Meanwhile, transaction fees in Obyte are now around $0.0000083.

Obyte Exclusive Features

Obyte stands out in the crypto space by offering a range of exclusive features that contribute to its unique value proposition. Besides traditional Dapps, DeFi platforms, liquidity mining opportunities, and other common features with Ethereum, we can also count some interesting functions only available in this ecosystem as user-friendly apps.

• Conditional Payments: They’re human-readable smart contracts that allow users to send funds with predefined conditions. This means that transactions can be contingent on specific events or triggers, unlocking a wide array of use cases. For instance, you could send a payment that is only released to the recipient once they send another payment to you or an event is posted on the DAG, creating a trustless and automated system for contractual agreements.

  
  

• Tokens with Bonding Curves: Obyte enables the creation of tokens with bonding curves, a mathematical system that allows token prices to be dynamically determined based on supply and demand. These curves facilitate automated price adjustments as more tokens are bought or sold, which can be useful for projects conducting token sales or managing liquidity. The OSWAP Token, Bonded Stablecoins, and Prophet prediction markets use this system.

  
  

• Contracts with Arbitration: This unique feature allows for dispute resolution in cases where one of the parties must release the funds to the other from a smart contract —for example, after the completion of a task or a purchase. Arbiters from the ArbStore can step in to mediate and make decisions, adding a layer of security and trust to complex transactions and agreements on the platform.

  
  

• Textcoins: This function enables users to send cryptocurrency via simple text messages, mail, chats, or paper. It’s a very user-friendly approach that lowers barriers to entry and makes cryptocurrency transactions more accessible to a broader audience, potentially driving adoption and mainstream use.

  
  

• Cascading Donations: Obyte's Kivach platform facilitates cascading donations for open-source projects, where recipients on GitHub can set up automated donations to multiple recipients in different proportions. This way, all interconnected projects can help each other while receiving donations from others.

  
  

• Chatbots: These automated conversational agents are integrated into the Obyte wallet, enabling users to interact with numerous services and perform various actions through simple instructions and steps. Chatbots enhance the user experience by simplifying complex tasks and providing real-time assistance to users.

  
  

These exclusive features collectively make Obyte a compelling platform for developers and users alike, offering a wide range of capabilities beyond simple transactions. Ethereum also has numerous use cases, depending on developers and users worldwide. Despite this, we can say that Obyte offers a more decentralized, open, and inexpensive ecosystem with unique features available for everyone.