Bitcoin vs Ergo: The Path Forward

Bitcoin vs Ergo: The Path Forward

Shoutout to Snowman Jason on Telegram


Bitcoin is a beast. Yes, the underlying software needs serious upgrades. It is slow. Really slow. But you have to give it credit, the network effect is a powerful thing — Bitcoin is the OG of crypto. Globally Bitcoin is becoming a common, understood and adopted term. Large trusts, investment titans, hedge fund managers, are all dazzled by the Bitcoin juggernaut. Bitcoin is a star and it has a long string of ex-lovers. 105 Bitcoin forks in total. 74 of which are considered active projects. It has a market cap of over a trillion dollars. Exchanges were built to facilitate Bitcoin trading. The media, marketing, commercial pipelines, infrastructure are unrivalled.


If we compare Ergo to Bitcoin based on the network effect, popularity, adoption it’s like comparing the quiet kid in the back of the classroom to some celebrity. Ergo sits quietly below 300 on Coin Market Cap. It is only on a few minor exchanges. In terms of current social, market awareness and value, it isn’t even a close competition. Indeed, Ergo has a potential upside of 14571x when compared to Bitcoin.


Bitcoin and Ergo are both pure Proof of Work currencies.

Bitcoin and Egro both run on a custom codebase that was built from scratch code.

Bitcoin and Ergo both run the UTxO model

Bitcoin and Ergo both launched with no premine and no Initial Coin Offering (ICO)

Schnorr Signatures

Schnorr signatures are a digital signature scheme known for their simplicity and efficient size. They have been proposed as a potential scaling solution for bitcoin as a smaller signature scheme would allow greater TPS than the current bitcoin Model. Schnorr signatures also have the added benefit of being linear, which means Schnorr-based smart contracts are possible. Schnorr signatures provide potential privacy uses. The upgraded model “Taproot” would be the largest upgrade to the bitcoin protocol since its launch.

Ergo already has Schnorr signatures (Sigma Protocols), smart contracts and privacy tools available for use today, with over 1.4m Erg in the SigmaUSD bank. Ergo launched with its own version of Schnorr signatures. It has already been running since Ergo mainnet launched in 2019. So the biggest upgrade of Bitcoin brings it on par with Ergo in 2019.

The path forward for Bitcoin is to try to be like Ergo.

Schnorr Signatures

A UTxO Smart Contract Model

Privacy Application Potential

Ring Signatures

Efficient MultisigTransactions

Mixer Applications

Other Major Solutions on Ergo Bitcoin Has Yet to Even Consider

Non Interactive Proof of Proof of Work (NiPoPow’s)

Oracle Data Schemes

Extended UTxO Smart Contract Schemes

Tokenized Governance

Storage Rent

ASIC Resistance

Ergo is trying to recreate the network effect, recognition and adoption that Bitcoin has achieved.

In almost every technical aspect, Bitcoin is trying to recreate what Ergo has already achieved


Bitcoin might have some privacy features that allow for mixing. Isn’t that such exciting potential?

Ergo already a non-interactive mixer that can mix ERG its native token as well as any other custom token on Chain. With the implementation of the ErgoSwap exchange, ANY CUSTOM TOKEN on the Ergo blockchain has the potential to be mixed.

Ergo already has demonstrated this with a mixable stablecoin SigmaUSD which can now be done by interacting with the contract directly from within a local copy of ErgoMixer.

Maybe one day, when Bitcoin has smart contracts, the network might be able to come to a consensus (without another 20 forks) and create a stablecoin protocol, that could potentially be mixable!

Adjustable Block Sizes/On-Chain Governance

Ergo has a path to adjust the size of blocks, through governance. Miners can vote to amend the protocol if needed. Bitcoin has 105 forks that demonstrate why on-chain governance is important.

Current Level 2 Solutions

Bitcoin has a lead in one area. The lightning network. Now a part of this is a necessity. Bitcoin needs the throughput capacity as the network is often congested. Lightning also is the chosen path for Bitcoin to operate in lite client environments. However being level 2 solutions have less security guarantees than blockchain level solutions, NiPoPoW’s offer a more secure path to lite client environments.

Ergo is not congested to the point where it needs a lightning network. Alex Cherpunoy, the creator of Ergo Script has been planning L2 scaling solutions since before he started designing the network.

The beauty of having a core developer with a background in academic research is as potential solutions are discovered, interoperability and implementation on Ergo can be added if feasible.

Ergo’s Optimization Plan

Based on the current state of the Ergo blockchain, what is the path to scalability? Ergo has a lot of options and improvements to explore. Ergo is committed to evolving Proof of Work. That is the core ideal of the Ergo blockchain. When will Ergo be finished? ideally, never.

That is the point of having a science first project. As new research and techniques are released that are compatible, they can be adopted. As new challenges arise in the future, new solutions must be implemented.

Layer 0 The Network Layer

The network layer in Ergo has yet to be optimized. When a user runs ergo-bootstrap or a jar the initial sync time for nodes can be a bit slow. With optimization the sync time from block 0 to the current block height could be increased significantly. With the network layer optimization in place the traffic consumed (when a node is synced) would also see similar improvements.

Layer 1 Blockchain Layer

Ergo’s blockchain layer is already fairly advanced. Ergo’s sigma protocols are cutting edge in the blockchain industry. Ergo has been running it’s version of schnorr signatures since its initial launch. Ergo pioneered extended UTXO smart contracts. This is the reason Charles Hoskinson has referred to Ergo as the extended UTXO test net.

Ergo already has support for stateless clients for full nodes. Relevant transaction data is sent to the receiver by the nodes in such a way that every block of information transferred can be understood in isolation, without context information from previous blocks. Stateless clients can receive blocks that carry transactions relevant to specific inputs or outputs, rather than digesting the whole sum of transactions of the blockchain, stateless clients are ideal for high volume applications, increasing performance by removing server load.

Stateless clients based on RSA accumulators were proposed at the Scaling Bitcoin workshop back in 2018, but they are based on very new cryptography. RSA schemes are now controversial in general. Ergo’s solution for stateless clients is based on hash based data structures, so they are simple and while remaining efficient.

NiPoPoWs, for light clients, are already in place. NiPoPoWs opens the potential to run clients with full node security in multiple environments. They give a viable path to applications running in a mobile environment with full node security. As hardware specs evolve, wearable devices may open an additional use case for NiPoPoW’s. Layers 2 pathways for lite client environments trade security for functionality, Ergo does not need to make this sacrifice.

There is also a pathway through governance in which miners could adjust the block size. A change in block size could increase the amount of transactions that can fit into each block, x.

Each Ergo block already has an extension section with mandatory and arbitrary key-value data. By putting anchors in the extension section it is possible to do BitcoinNG-style microblocks, Aspen-like service chains or generic side chains with just velvet or soft forks. Ergo has ability to implement advanced layer 1 solutions without the need to hardfork the blockchain

The next development on Layer 1 will most likely be based on the outcomes of future side chain research between Ergo, Emurgo, and IOG.

Layer 2 OffChain Protocols

Ergo has the possibility of supporting the lightning network in the future. There is also the potential to implement a rainbow network in layer 2. Zero-Knowledge Contingent Payments and FairSwap/FastSwap protocols are layer 2 protocols that Alex has been researching. Other state channels can be implemented as required.

The truth is the Ergo blockchain is not congested to the point scalability issues are required. Luckily plans are in place to address scalability issues before problems arise.

It is hard to predict what type of solutions applications on Ergo will have demand for, however, there are paths to consider moving forward. There is also research that is currently being done that may one day prove useful for the development of Ergo. This theory-led project offers a multitude of useful outcomes for not only Ergo, but cryptocurrencies as a whole. Ergo is committed to discovering and implementing solutions that maximize the potential of Proof of Work.

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