Ethereum Classic is a continuation of an older Ethereum upgrade called ‘Homestead’. Both Ethereum and Ethereum Classic use a Proof of Work algorithm to carry out transactions. As they state on their official website: ‘ETC is the continuation of the unaltered history of the original Ethereum chain’. In July 2016, the Ethereum foundation decided to create a hard fork of the Ethereum blockchain. The group, who later came to be known as the ETC community, wanted to keep the original chain in order to maintain the immutability proposed in the initial white paper.
The History of Ethereum Classic
Ethereum Classic shares the majority of its history with Ethereum. The two platforms drifted apart in June of 2016, after the disastrous hack known as “The DAO” occurred. During The DAO incident, an unknown hacker drained over 3.6 million ether out of the Decentralized Autonomous Organization into a “child DAO.” This caused the price of ether to drop from 20$ to 13$. In search of a solution that would help minimize the losses after this technical disaster had taken place, Ethereum’s team proposed an idea to roll back the chain state to the moment before the hack had occurred.
Returning the platform to the state it was in prior to the attack had significant consequences. It meant that Ethereum would have to sacrifice one of its most important feats, its immutability. The majority of the Ethereum community were against this move.
The original creator of Ethereum, Vitalik, was in favor of initiating the rollback. His aim was to ensure that the DAO funds could safely be extracted and converted back to Ether. Initiating the rollback would have fulfilled this objective. However, a large part of the community did not support the decision to give up the network’s immutability. Instead, they were convinced it would be better to continue without reversing the transactions, including the ones that utilized the exploitable weakness to perform the theft.
A Divide in the Community
After the divide in the community, the decision was officially made to hard-fork the chain. This step resulted in two separate chains that would go their own ways, one being Ethereum because they hard-forked the chain. The other chain was still upholding the original specifications, that is, its immutability and censorship-resistance. This is the chain continued by the developers that rejected the hard-fork. This network has since been named “Ethereum Classic”.
Specifications of Ethereum Classic
|Founder(s)||Vitalik Buterin, Gavin Wood & Joseph Lubin|
|Date of Release||30 July 2015|
|Consensus mechanism||Proof of Work|
|Average Block Time||10 – 20 seconds|
|Mining reward||4 ETC|
|Average blocksize||1 – 2 kb|
|Next Block Halving||n/a|
|Smart Contracts||Yes, in Solidity|
The Price of Ethereum Classic
Unique Aspects of Ethereum Classic
In terms of philosophy, the creators of Ethereum believed that it is better for a cryptocurrency to have an accessible integrated programming language that would allow people to develop better applications smart-contracts. The smart-contracts designed using this programming language could interact with transactions on the platform on a more efficient level. This kind of flexibility and accessibility enables people to build decentralized applications that not only interact with the block-chain, but actually become a part of it.
With this goal in mind, the team has created a platform on which users can create and implement smart-contracts that enable them to form trustless agreements. A “trustless” blockchain minimizes the amount of trust that is required from users to form a transaction.
In order to create a transaction from one part of the world to another, users need a trustworthy intermediary to handle the funds. This trustworthy intermediary can be a bank, a payment provider, or a credit card. However, a smart-contracts system such as that of Ethereum Classic allows users to form agreements without this component. These trustless agreements can be set up between multiple non-trusted parties.
Platform Used to Execute Complex Contracts
To give some more examples of potential uses of Ethereum Classic, the platform can be used to execute complex financial contracts defined by specific rule-sets that do not require any governing and can act autonomously once deployed. This can be useful for commercial and fiscal companies that primarily deal with monetary affairs
It is also possible to develop games that make use of the block-chain or custom smart contracts that are designed to facilitate product tracking for vendors or consumers. The possibilities are quite limitless in terms of the applications that can be developed on a platform. Ethereum Classic can also provide users with a safe way to store information publicly. It also enables them to utilize censorship resistant messaging.
Why Use Ethereum Classic?
Ethereum Classic has the same advantages as Ethereum. However, the current value of ETC is only 10% of the value of Ethereum. Looking past the difference in current value, the aspect that mainly sets them apart is their stance on immutability and censorship resistance.
Since the developers of Ethereum had chosen to rollback transactions after the DAO incident, Ethereum itself is no longer considered completely immutable. This means that the transactions of Ethereum are no longer permanent after they gather confirmations in the blockchain. This is, of course, relative, because it does not affect the everyday use of the platform and the transactions are not affected either. Neither aspect of the platform is affected, that is, until an incident of similar proportions occurs and the developers decide to apply the same solution.
Currently, the platform allows any user to receive ERC20 tokens on an Ethereum address. Ethereum will stimulate further growth and development of security tokens as well as utility tokens over the coming years. The main difference between Ethereum Classic and the current day Ethereum is that the developers of Classic have kept their chain immutable and censorship resistant after the DAO incident occurred.