A Brief History of the Ethereum Network
Ethereum emerged in 2015 but soon ran into trouble after the massive heist of $60 million in Ether from the June 2016 DAO hack.
The DAO was launched in 2016 on Ethereum’s blockchain. It was intended to function as a venture capital entity driven by investors due to its infrastructure as a decentralized autonomous organization (DAO).
Decentralized Autonomous Organisation (DAO) and the ETH vs. ETC Split
DAOs operate based on blockchain protocols where rules are encoded into smart contracts and operate based on a consensus mechanism. Many see DAOs as advantageous since they do not require human coordination or intervention to foster a trustless system.
The high-profile nature of The DAO helped the entity raise $150 million in Ether from at least 11,000 investors, but problems quickly ensued as the $60 million hack occurred just three months after the initial launch.
The thieves managed to find a smart contract bug and withdraw the Ether. Many proposed different solutions.
An initial idea of a soft fork by Vitalik Buterin died after the alleged hacker stated they would thwart any attempt by bribing Ethereum miners to not participate.
Others argued the solution was to reverse the Ethereum blockchain so Ether to a different smart contract where investors could get their funds. While this move was also very controversial, since many believe blockchain should be immutable, the hard fork was eventually implemented on July 20th, 2016.
The ensuing fallout from the decision led to two separate blockchains. Those who opposed the hard fork supported the older ‘Ethereum Classic’ version. The blockchain that implemented the hard fork is now known as Ethereum.
Now that we have an understanding of Ethereum’s beginnings and the DAO hack, let’s build on the basics and discuss more about Ethereum and Ethereum Classic.
What Is Ethereum Classic (ETC)
Ethereum Classic’s native currency is known as ETC. The hard fork creating Ethereum Classic resulted in the return of lost funds from the DAO hack. Those behind Ethereum Classic intend to keep building the project to become a worldwide smart contract-based payment network.
The project also has a focus on immutability that’s often described as “code is the law.”
What Is Ethereum (ETH)
Ethereum is one of the globe’s most used blockchain platforms with a native cryptocurrency known as Ether (ETH).
Ethereum was originally conceived in 2015 and released in July 2015. Co-founders included Vitalik Buterin, Gavin Wood, Charles Hoskinson, and Joseph Lubin.
Ethereum has gained particular notoriety within the emerging monetary system known as DeFi (decentralized finance) since developers can deploy permanent and immutable dApps onto the blockchain. Ethereum remains one of the most potent DeFi industry catalysts, but Ethereum is not a DeFi.
Crypto fans can also create and exchange NFTs on Ethereum, and a wide range of other cryptocurrencies rely on the ERC-20 token standard. NFT traders often hunt for times
when Ethereum gas fees are the lowest so they can pay less to the Ethereum network for carrying out transactions.
Ethereum’s also made waves as it has made an impact in the world of traditional finance. The Chicago Mercantile Exchange (CME) approved Ether futures trading in early 2021.
Ethereum’s current PoW consensus mechanism also makes the coin a popular option for Ethereum miners looking to collect rewards.
Ethereum’s also made headlines for an ongoing multi-phased upgrade commonly known as ‘Ethereum 2.0,’ even though the Ethereum team has stated it would stop using this moniker in favour of a rebrand around a new “consensus layer.”
While planned enhancements have been met by delays, the upgrade is set to boost Ethereum’s speed, scalability, and efficiency, largely through the shift to PoS.
The first layer of the upgrade, the Beacon Chain, went live in December 2020 to usher in native staking. Plans right now are to merge the Beacon Chain with Ethereum main net sometime in 2022, a process known as “the Merge.”
The final phase is shard chains, which according to the Ethereum team, will result in the network supporting up to 100,000 transactions each second.
The Ethereum Foundation says the full upgrade will occur by 2023.
Ethereum vs Ethereum Classic Comparative Table
|Purpose||dApp development. Smart contract functionality||dApp development. Smart contract functionality|
|Mining Reward||Transaction fees||Transaction fees|
Ethereum vs Ethereum Classic – What are the Differences?
Ethereum Classic has a 210 million coin hard cap while Ethereum has an unlimited coin supply.
The other major difference between the coins focuses on consensus mechanisms. Ethereum is in the middle of a gradual switch from a Proof-of-Work to a Proof-of-Stake mechanism to boost scalability and performance. Ethereum Classic still remains on a Proof-of-Work mechanism.
How Are Ethereum Classic and Ethereum Similar?
Both networks permit software developers to build decentralized applications based on smart contracts. Ethereum Classic and Ethereum also have identical blocks up to 1,920,000 (the hard fork).
Ethereum Classic also does its best to keep up with Ethereum functionality. For example, the coin’s Magneto update followed in the footsteps of Ethereum’s Berlin upgrade to slash gas fees. High Ethereum gas fees have long plagued the network.
Ethereum Classic vs. Ethereum Price
Despite the similar-sounding name, Ethereum and Ethereum Classic do not follow each other price-wise. Ethereum Classic traded between $13-$17 in mid-June 2022. In the same time range, Ethereum traded between $900-$1100.
Ethereum or Ethereum Classic: Where Do Both Projects Stand Today?
Ethereum continues to be much more popular than Ethereum Classic due to the blockchain’s versatility and many use cases as a foundation building block.
Right now, ETC’s main focus remains to adhere to its ‘code is law’ mantra and ensure the enforcement of contracts without a third party.
Does Ethereum Classic (ETC) Have A Future?
In late March 2022, the price of ETC surged nearly 80% in a week amid speculation from some experts that PoW miners were shifting over to Ethereum Classic amid Ethereum’s planned ‘Ethereum 2.0’ PoS upgrade.
However, many still express concerns about the security infrastructure of Ethereum Classic and the potential risks of hacks. As a result, ETC’s future is most likely limited and will certainly be much smaller in scope than ETH.
Should You Invest In Ethereum or Ethereum Classic?
Moving forward, it looks like Ethereum will still remain as the blockchain trusted and used by more people. However, ETC still has a place and role within the vast crypto ecosystem. Ultimately it comes down to investor preference and risk tolerance when it comes to choosing a coin as an investment.
Ethereum Classic and Ethereum are two coins with a shared history and ones that have made an immense impact in the crypto world. While their names are similar, both are vastly different coins.
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