What Is Ethereum Classic (ETC)?
Ethereum Classic (ETC) is a hard fork of Ethereum (ETH) that launched in July 2016. Its main function is as a smart contract network, with the ability to host and support decentralized applications (DApps). Its native token is ETC.
Since its launch, Ethereum Classic has sought to differentiate itself from Ethereum, with the two networks’ technical roadmap diverging further and further from each other with time.
Ethereum Classic first set out to preserve the integrity of the existing Ethereum blockchain after a major hacking event led to the theft of 3.6 million ETH.
Who Are the Founders of Ethereum Classic?
Ethereum Classic is in fact the legacy chain of Ethereum, and its true creators are therefore the original Ethereum developers — Vitalik Buterin and Gavin Wood.
A contentious hard fork on Ethereum occurred in July 2016, when participants disagreed over whether to revert the blockchain to cancel out the effects of a major hack. This impacted The DAO, a decentralized autonomous organization (DAO) which had raised approximately $150 million in an initial coin offering (ICO) several months earlier.
Ethereum Classic came into being as the network which did not revert the chain. Developers state that there is no “official” team attached to the project, and that its “global development community is a permissionless 'do-ocracy,' where anyone can participate.”
What Makes Ethereum Classic Unique?
Ethereum Classic’s main aim is to preserve the Ethereum blockchain as it originally was, without artificially countering the DAO hack.
Its appeal was first to those who disagreed with Ethereum’s response, but the legacy network has since gained a wider fan base, which include major investors such as Barry Silbert, CEO of investment firm Grayscale.
As a voluntary organization, the developers of ETC do not aim to turn the network into a for-profit entity. Users pay transaction fees as with Ethereum, and miners collect them based on work done as per the proof-of-work (PoW) mining algorithm.
Unlike Ethereum, Ethereum Classic has no plans to convert to a proof-of-stake (PoS) mining algorithm, while multiple developers continue to work on future improvements such as scaling solutions.
How Is Ethereum Classic Different From Ethereum?
Ethereum Classic (ETC) and Ethereum (ETH) are two separate blockchain networks that share a common history but have since diverged in philosophy and development.
Ethereum Classic is the original version of Ethereum that was launched in 2015. It is a decentralized, open-source blockchain platform that allows developers to build and deploy decentralized applications (dApps) and smart contracts. Ethereum Classic secures its network using a Proof-of-Work (PoW) consensus algorithm.
Ethereum, on the other hand, is a fork of the original Ethereum blockchain created in 2016. It emerged as a response to a hack that caused the loss of millions of dollars worth of Ether. The Ethereum community implemented a hard fork to reverse the hack and return the stolen funds to their owners. As a result, two separate blockchains, Ethereum (ETH) and Ethereum Classic (ETC), were created.
One of the main differences between Ethereum Classic and Ethereum is their approach to governance. Ethereum has a more centralized system, with a core development team that makes decisions about the platform's future. In contrast, Ethereum Classic has a more decentralized approach to governance, with decisions made by the community through a consensus process.
Another key difference between the two is their development roadmap. Ethereum is focused on transitioning from a Proof-of-Work consensus algorithm to a proof-of-stake (PoS) algorithm after The Merge. Ethereum Classic, on the other hand, has focused on maintaining its original PoW algorithm and staying true to its decentralized philosophy.
Concerns About Ethereum Classic
Ethereum has grown in popularity as the more trustworthy one of the two networks, even though Ethereum Classic and Ethereum both offer smart contracts and compete for the same market.
The possible scalability constraints of Ethereum Classic are one of its main worries. The network can typically support 15 transactions per second (TPS), which is significantly lower than payment networks like Visa, which support more than 1,000 transactions per second. Although Ethereum Classic has undergone numerous software improvements, one of its largest problems moving ahead will continue to be the scalability of its payment systems.
