Ethereum vs Ethereum Classic: Whats the difference?

In 2021, the future trading of Ether was approved by the Chicago Mercantile Exchange, which is proof of how far ahead Ether is from ETC. Smart contracts are written in code, of course, and thus, they come in the form of if-then statements. If the requirements of the contract are filled, then and only then will the contract be properly executed and the benefits be given to the person who signed the contract. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page.

This will change soon due to work being done to bring cryptocurrencies into the fold of traditional, mainstream financial markets. Back in the good old days, when Ethereum was a single, united blockchain with Ether as its native currency, Ethereum became popular as a platform that allowed initial coin offerings . The Bitcoin blockchain can only host Bitcoin itself, while the Ethereum blockchain can lend its base to other cryptocurrencies.

From how it works, to its philosophy and security, this series has all you need to understand, use, and invest in ETC. This shows the success and viability of proof of work to manage and conduct high value payments, settlements, and smart contracts at the base layer on a global scale. Ethereum Classic is currently the eighteenth-largest cryptocurrency, with a market cap of over $5 billion.

https://www.beaxy.com/ Classic is an open source, blockchain-based distributed computing platform featuring smart contract functionality. It supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine . Ethereum Proof of Work came as a result of the long-anticipated Ethereum Merge. The main Ethereum blockchain used the proof of work consensus mechanism, which required miners to work. Miners would solve complex mathematical problems to verify blocks containing transactions and would be rewarded for doing so. Ethereum Classic became particularly popular throughout Summer 2022 due to the Ethereum proof of stake blockchain merge.

The hash rate of ETC hits an all-time high, which reduces the risks of a “51% attack.”

Both of these are distributed geographically, and new providers can emerge organically. Subtle game theory bugs and exploits in blockchains are extremely difficult, in some cases impossible to identify, test and eliminate before going into production. As with all software systems, additional complexity creates a greater attack surface for malicious actors to take advantage of and exploit, with potentially catastrophic results.

However, Ethereum Classic uses the original Ethereum system that encouraged immutability, a process where users cannot alter transactions in the blockchain’s history. The formation of Ethereum Classic emerged as an offshoot of the original Ethereum blockchain platform that was created in 2015. The current Ethereum chain has made some changes over the years, but it remains a popular choice among cryptocurrency investors. In the eyes of the Ethereum Classic community, the blockchain and code will always be immutable.

• Kriptomat offers a secure storage solution, allowing you to both store and trade your Ethereum Classic tokens without hassle.
• In its operating style and philosophy, Ethereum Classic resembles Bitcoin more than it does Ethereum.
• Hardware wallets or cold wallets provide the most secure option with offline storage and backup.
• They are available to download as smartphone or desktop apps and can be custodial or non-custodial.
• Much like its closely related sibling Ethereum , ETC lets developers to build and deploy smart contracts, or self-executing programs that run on the blockchain when certain predetermined conditions are met.

This is an important part of the story of Ethereum Classic because it could be seen as one of the key reasons why ETC has been able to remain successful. A group of developers chose not to implement the change, and thus created Ethereum Classic. They believe that the “code is law” and that any changes to the code should be voted on by the community before being implemented. On the contrary, the hacking event resulted in 3.6 million worth of ETH being stolen. The opposing developers believed that if this wasn’t resolved, it could potentially damage Ethereum’s reputation.

It has a capped supply

Ethereum Classic is an open-source, blockchain computing platform and cryptocurrency. Much like its closely related sibling Ethereum , ETC lets developers to build and deploy smart contracts, or self-executing programs that run on the blockchain when certain predetermined conditions are met. As miners in PoW blockchains work on a block by block basis, that work is not only a barrier for dishonest nodes to tamper with the current or latest blocks, but that work actually accumulates as the chain is built. This means blocks that are buried further away in the chain become exponentially more difficult for attackers to change or forge. For example, at the time of this writing, it would take 340 days with 100% of the current hashing power in the Bitcoin network to be able to reverse the entire chain. Ethereum Classic continues to exist as a blockchain that operates the Ethereum Virtual Machine , supporting smart contracts, decentralized applications , and its own cryptocurrency, ETC.

Eric Rosenberg is a ethereum classic proof of stake writer with more than a decade of experience working in banking and corporate accounting. He specializes in writing about cryptocurrencies, investing and banking among other personal finance topics. The ETC price prediction from Gov Capital put the price of the coin at around $45.99 on 21 December next year, rising to a little under $224.04 in five years’ time. The start of 2021 was a good time for crypto, and ETC was able to take advantage of more and more people getting involved. It reached an all-time high of $176.16 on 6 May 2021, then dropped back sharply as the market crashed. As with other crypto prices, ETC bottomed out on 22 June, dropping to a low of $32.51.

Attacks

That’s not an impossible outcome, but it’s a bet that I’m personally not willing to make at this time. Moreover, Ethereum Classic had approximately $873,161 in total value locked in decentralized finance protocols on Sept. 15, 2022. As of today, the TVL in Ethereum Classic defi protocols has decreased 56.84% to $376,803. Currently, the decentralized exchange platform Hebeswap dominates with 58.74% of the TVL, amounting to $221,335. However, Hebeswap was also the dex with the worst seven-day TVL decrease of -6.87% in the past week. The Ethereum developer ecosystem is one of the main factors behind many ETH bull thesis.

Though both are hallmarks of technological and financial innovation, their insistence on preserving their original visions, regardless of how outdated they may appear to be at this time, can make them seem inflexible and resistant to change. Ethereum Classic is the result of a hard fork of the Ethereum blockchain after a hack in July 2016. The founders of Ethereum and the Ethereum Foundation continued developing on a new blockchain, what the world now knows as Ethereum, but some dedicated supporters decided to continue growing the old blockchain, which they renamed Ethereum Classic. Although transactions on Ethereum Classic cannot be altered like they can with Ethereum, both blockchains still operate as pseudonymous setups. The public keys on a transaction will stay open, while the person’s name and other identifying details will not appear on the setup. As the second-largest cryptocurrency in the market, it features a market cap of nearly $400 billion.

Introduction to Cryptocurrencies

ETC focuses on a platform where users cannot alter transactions on a blockchain’s history. Ethereum is a popular cryptocurrency that supports smart contracts and decentralized apps. A developer can use the Ethereum programming language to produce dApps for many use cases, including financial services, gaming, NFTs and much more. These applications run on smart contracts, which mean the programs operate when certain conditions work.

Both Ethereum and Ethereum Classic automate dApps and financial decisions using smart contracts. A smart contract is essentially self-executing code that can perform actions based on predefined conditions. Unfortunately, DAO’s smart contract code had a security vulnerability known as the ‘Split Function’. Originally, the smart contract included this feature to enable investors to withdraw their investment if they weren’t satisfied with a project. If someone invoked the function, users would get their ETH back, and the smart contract would update the public ledger accordingly.

Notable Happenings for Ethereum Classic

With the spurious money printing in the present and in recent years by central banks in North America, Europe, and elsewhere, which is likely to continue in the foreseeable future, it is likely this projection will prove conservative . However, several upgrades have been implemented, and others will continue to be performed to make it much more stable . Eventually, as the network grows, its security model will guarantee a very similar level of safety as Bitcoin . The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

Because TheDAO was such a large part of the total Ethereum in circulation in 2016, the Ethereum developer community debated and ultimately took action to create Ethereum Classic as a hard fork—complete split—from Ethereum. Not to be confused with the cryptocurrency Ethereum, Ethereum Classic functions independently. Ethereum Classic operates using the blockchain and consensus rules that originally governed Ethereum. While Ethereum Classic is among the top cryptocurrencies by market capitalization, its market cap is far smaller than that of Ethereum. The Dao was one of the most successful cryptocurrencies on the Ethereum blockchain. It was the decentralized version of venture funding, where people who bought the currency provided the funding pool, and then the community would vote together to decide which investment opportunities the money should be invested in.

It is the second- with a market cap of $324 billion and a circulating supply of over 120 million tokens. The network’s developers initially proposed a soft fork so that the current and updated versions are mutually compatible. Instead, the network arrived at a consensus to hard fork Ethereum, which meant the creation of a new and backward-incompatible blockchain. Ethereum co-founder Vitalik Buterin The 2016 launch of the decentralized autonomous organization known as “The DAO”, however, changed things for the new blockchain.

Buterin made a case for Bitcoin to create a new programming language that could automate tasks and allow apps to be built on top of its blockchain. The history of the original Ethereum network began back in 2013, when Vitalik Buterin’s idea for a new programming language didn’t gain much traction within the Bitcoin community. As Bitcoin’s supply will never surpass 21 million BTC, Ethereum Classic’s supply will never surpass 210 million ETC. Both cryptocurrencies have the goal of mimicking gold to become digital gold .

They differ, however, on factors like minting limit, market cap, and consensus protocol. Ethereum Classic emerged as the unaltered version of Ethereum and derived its name after forking the network. Anonymous developers vehemently upheld the immutability of blockchain technology and convinced others to maintain the transaction record of old Ethereum. These contracts require people to meet specific terms for operation at certain times, ensuring the platform is safe and secure. It entails miners verifying transactions ETH on the blockchain to receive Ether rewards. Ethereum features a platform that allows prior transactions to be altered and adjusted.

In the next ten years this trend will likely continue, but ETH will migrate to proof of stake , which will open that position for ETC to occupy at the base layer. Just about anyone can get involved in the staking process, helping to secure the new network and passively earning ETH, either by staking 32 ETH themselves or by joining a staking pool through an exchange like Coinbase. Use a proof-of-work system, which requires lots of powerful computers—and energy—to process transactions.

One main difference between Ethereum and Ethereum Classic is the use of PoW versus PoS as a consensus mechanism. Whereas Ethereum Classic defused its difficulty bomb, Ethereum underwent The Merge in September 2022, formally transitioning to a PoS network. In fact, Ethereum nodes who wanted to continue generating profits through PoW processing began mining ETC soon after The Merge. Ethereum has been planning to move to a PoS consensus algorithm for multiple years now and Ethereum Classic has no plans to change its PoW method.

The Bitcoin community also faced a similar dilemma in 2017 when it forked and Bitcoin Cash was born. The forking of the Ethereum blockchain is therefore not an exceptional incident in crypto history, and it didn’t permanently solve Ethereum’s problems. Both Ethereum and Ethereum Classic function as a store of value, facilitating trades and exchanges with other cryptocurrencies.