Ethereum vs. Ethereum Classic
The battle between Ethereum and Ethereum Classic is not just an ideological one, it is also an ethical one. Therefore, to be able to understand the difference between Ethereum and Ethereum Classic, and to understand better what Ethereum Classic is, we need to understand a little bit of history. DAO and the Attack A […]
The battle between Ethereum and Ethereum Classic is not just an ideological one, it is also an ethical one. Therefore, to be able to understand the difference between Ethereum and Ethereum Classic, and to understand better what Ethereum Classic is, we need to understand a little bit of history.
DAO and the Attack
A couple of years after the launch of the Ethereum blockchain, its community created The DAO – the Decentralized Autonomous Organization. This decentralized platform was going to be a complex smart contract that was going to revolutionize the Ethereum network.
In May 2016, the DAO launched an ICO to raise funds for its development. The project raked in $150 million worth of ETH, the second highest at that time. The DAO, was now in possession of 14% of all the ETH created so far.
To give people the chance of opting out of the DAO, a Split Function – an exit door – was incorporated into the DAO. Therefore, users could take their ETH and leave the DAO if they so desired. There was, however, one condition. After leaving the DAO with their ETH, users could not spend their cryptocurrencies for the next 28 days.
A number of people in the Ethereum community were not comfortable with the exit door, saying it was a loophole that could be exploited. And sure enough, in June of 2016, that very loophole in the DAO was exploited and hackers got away with about a third of the DAO funds – around $50 million.
While the Ethereum network was in no way responsible for what happened to the DAO, the fallout of this hack attack was that people lost faith in cryptocurrencies. The price of ETH nosedived from $20 per token to $13.
The Ethereum community was in conflict at this time. Because of the condition in the Split Function, the hackers could not use the stolen tokens for another 28 days, so that gave the community time to react. They had two options to deal with the situation –implement a soft fork or implement a hard fork.
There was massive conflict within the community about what to do. One section wanted to implement a soft fork and keep the original blockchain, follow the Code is Law rule. However, the majority of the community wanted to nullify the attack and reimburse all who invested in the DAO.
In the end, there was no other option but to implement a hard fork so that losses could be made up to investors. Those who chose to stay with the original Ethereum Blockchain, renamed it Ethereum Classic (ETC), while the new blockchain was called Ethereum (ETH).
What is Ethereum Classic?
Ethereum Classic is the original blockchain, and is currently the 17th most valuable cryptocurrency in the world, with a market capitalization of $1.78 billion. The price of ETC is current $17.56 in the cryptocurrency market.
Difference between Ethereum Classic and Ethereum
Ethereum (ETH) – as we know it today – is the new Blockchain that was created after the hard fork was implemented. Most of the bigwigs in the Ethereum community chose to move to the new network and because of this, ETH is the second most valuable cryptocurrency in the world today, with a market value of $68.74 billion and a token price of $690.93.
Both Blockchains are decentralized platforms and are traded on exchanges. Both networks offer DApps and Smart Contracts to their users and they both use the same coding language called Solidity.
However, both blockchains have evolved over time and are now moving in different directions. ETH has an uncapped total supply while ETC has capped its supply to somewhere between 210 million and 230 million ETC.
Additionally, ETH is planning to move to Proof-of-Stake, while ETC is not. ETH also enjoys a lot more investor confidence that does ETC and is much more developed in terms of ICO launching as well as DApp building.
Ethereum has had a spectacular comeback after a massive disaster and it looks like all the expectations that people had to begin with are going to be fulfilled by the ETH community. ETC, on the other hand, doesn’t have that kind of support and is now more than 15 times less valuable than ETH. ETC has also developed an unsavory reputation of being full of scammers, while ETH has built a huge bank of trust.