It's great that counterparty is adding contract support sometime soon. Counterparty technology has promise, but it has fundamental differences compared to ethereum.
Running contracts on a layer on top of bitcoin vs an idependent blockchain like ethereum is a very different experience.
It will take time to figure out what sort of model wins out- Let's all hope the best technology wins.
Well, both platforms require you to use a new currency (ether and XCP currency.) Counterparty will make it easier to write contracts that involve bitcoins (I think, not totally sure how that works) ethereum will have a 12 second block time vs a 10 minute block time (very different) and ethereum transaction costs should be lower (for several reasons.)
Additionally, counterparty will probably launch their product first.
Also, ethereum is only one piece of a much larger technology stack being worked on, linking contracts to things like private messages between users, a file distribution system, a webkit-based webrowser/wallet system, etc. Additionally, ethereum can support SPV, a technology very relevant for mobile apps, which apparently isn't possible with a XCP-type system.
(Counterparty also has add-on technologies, but I'm not that familiar with their stack.)
So it's confusing, but Counterparty doesn't exactly require new currency. There's a few ways to think of Counterparty's XCP, but in all of those ways it augments Bitcoin. XCP is used to store 'value in escrow', fight spam (such as in the case of asset name declarations), and now to control of execution times. There may be some other uses in there.
The 12 second blocktimes of Ethereum will be considerably longer than the instantaneous times of Bip70 insured (or let's see what medici comes up with maybe) Bitcoin/Counterparty transaction times. Further the chain will almost certainly be less secure, but since this chain doesn't exist even in theory yet, it's hard to say.
As for the rest of Ethereum's promises, yep, they're tackling just about everything that could ever be included in a protocol. As to whether any of this will scale down to a mobile device, it's just a marketing claim right now, they have way to much work to do in the base platform to care at all about mobile yet.
IMO Counterparty is (still) the most underated technology in the crypto space. Since it utilizes the same addresses and Blockchain as Bitcoin, it has just as many users as does Bitcoin. The protocol is clearly tackling all the features that Ethereum has promised, and it works today. It's a fair comparison to suggest that Counterparty is to Bitcoin, what css is to html. They work together
Counterparty has a production release which is entirely functional, and in active use (I think they just hit 100k transactions). In fact, it's usually responsible for 1-2% of Bitcoin's daily transaction volume. The contract feature was just announced today, but Counterparty's development is very quick, and the feature will be in production soon, judging by their pace thus far. The project went from starting out in January, to securing the Overstock deal in November. Compared to Ethereum's glacial pace, I'd not be surprised if these contracts are in production before Ethereum even enters beta.
One thing that concerns me is that every node needs to run every contract. Computers that are connecting to the network for the first time and doing full verification will have many, many contracts to compute. Catching up could take significantly longer than it already does.
Shouldn't be a problem. The checking part is computationally fast. The real problem is downloading all the data. For that they can just DL the blockchain to avoid the slow transfer speed of the bitcoin network.
Running contracts on a layer on top of bitcoin vs an idependent blockchain like ethereum is a very different experience.
It will take time to figure out what sort of model wins out- Let's all hope the best technology wins.