-by- syntax of adding another variable in brackets

Hi Statalist

This is an admittedly general question but I've struggled to find the answer to it despite having looked at many places. From https://www.stata.com/support/faqs/d...ions-in-group/, the syntax of the code used is:

Code:

 
 by eid (egenotype), sort: gen diff = egenotype[1] != egenotype[_N] 

Question: when we go need to add another variable in brackets following the -by- option (in this case, (egenotype))? Moreover, why wouldn't the above work if it is simply

Code:

 
 bysort eid: gen diff = egenotype[1] != egenotype[_N] 

Thanks.