Ethereum Classic (ETC) refers to an open-source, decentralized, blockchain-based distributed cryptocurrency platform that runs smart contracts. Understand that Ethereum and Ethereum Classic share a common origin, as both were part of the original platform. Ethereum Classic maintains the original, unaltered Ethereum ledger and Proof-of-Work consensus. It facilitates smart contracts, which automate action through the blockchain. For instance, if one party agreed to sell an item for a specific price to another, the smart contract tends to automate the payment and transfer of ownership. This removes the need for trust that either party would fulfill its obligations. This article will further discuss everything you need to know about Ethereum Classic, so keep reading to learn more. 

Ethereum vs Ethereum Classic: Key Differences Every Investor Should Know 

As said above, Ethereum and Ethereum Classic are two separate blockchains that originated from the same platform. The key difference is that Ethereum Classic maintains the original Ethereum blockchain’s principles, while Ethereum has undergone changes. Apparently, the two platforms differ in their market value, design philosophies, and consensus mechanisms. The split between the two platforms occurred after a significant event in 2016 known as the DAO hack. DAO (Decentralized Autonomous Organization) was a well-known crowdfunding campaign in crypto history, raising a substantial amount of Ether. However, a flaw in the DAO’s code led to a hack that resulted in a loss of 3.6 million ether, which is approximately $50 million at that time. This event led to significant consequences. 

This way, there was Ethereum, the new chain that was rolled back to the original chain prior to the  DAO attack. On the other hand, the original non-fork Ethereum was rebranded to Ethereum Classic. Ethereum Classic is said to be the continuation of the original Ethereum platform, built in 2015. It follows the concept of ‘Code is Law’, which means that the rules and regulations of a decentralized network are enforced only through its underlying code. Apparently, this principle is considered a necessary component of a decentralized system. Note that Ethereum Classic has its own native token, ETC, and a monetary policy with a supply capped at around 210.7 million ETC. It is also known to maintain the original proof-of-work consensus mechanism. 

Ethereum (ETH), on the contrary, has undergone changes since the hacking event. It now has its own native token, ETH, and unlike Ethereum Classic, it does not have a fixed supply. It has also changed from the proof-of-work consensus mechanism to a new system called proof-of-stake. Understand that Ethereum is a large blockchain in the market that powers a wide range of applications, such as gaming, financial services, and NFTs. While Ethereum may be the ideal choice for some, both Ethereum and Ethereum Classic have their own unique features and positioning that meet specific needs and use cases in the market. Keep in mind that when Ethereum Classic maintains the original principles of the Ethereum platform, Ethereum has changed to adapt to the market’s needs. 

Further Note On The History Of Ethereum Classic

The Ethereum blockchain was established as a network where transactions were facilitated using its native token, ether (ETH), and this new network quickly became popular. It was well-known for initial coin offerings (ICOs) because many different teams used the platform to launch their own tokens. One of the most successful ICOs was the DAO, where investors would vote on assets in which to invest. This quickly accumulated more than 11 million ETH from 18,000 investors before certain unknown hackers discovered a smart contract bug, which allowed them to withdraw about one-third of The DAO’s accumulated ether. It is due to this scale of hack, many investors recommended reversing the Ethereum blockchain to rescue the affected investors. However, others argued that doing this would cause a precedent for future bailouts. 

As a result, the Ethereum blockchain split into two separate networks, and the new network got the game Ethereum and the native token Ether. The older one was renamed Ethereum Classic, and it also uses Ether, but with a different symbol, ETH. Apparently, this network experienced a migration of miners after Ethereum integrated proof-of-stake in 2022. Even though both Ethereum and Ethereum Classic remain almost the same, Ethereum happens to be the more popular one. The main concern regarding Ethereum Classic is its potential limitations regarding scalability. Since Ethereum Classic underwent many software upgrades, the scalability of its payment system remains one of its biggest challenges. 

Conclusion 

Ethereum Classic (ETC) is the original, unaltered Ethereum blockchain that emerged from a controversial 2016 split. Ever since the hard fork, Ethereum has undergone several upgrades, such as developing compatibility with Ethereum’s latest changes. Despite all this, the demand for this network continues to be strong and there is a possibility that the blockchain and cryptocurrency will remain competitors in the space. Regardless of the ups and downs, Ethereum Classic is believed to have a consistent base of traders, investors, and users.