What’s the difference between Ethereum and Ethereum Classic? Newbies in cryptocurrency trading often mistake the two distinct coins for the same. If you wanted to dig deeper into the Ethereum Vs Ethereum Classic question, you are at the right place. Despite having a shared history, these two cryptocurrencies differ widely in several aspects.
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Ethereum Vs Ethereum Classic: A Brief History
Ethereum was built in 2013 by Russian-Canadian Vitalik Buterin with two other co-founders. The Ethereum project was made public after its details was published in a white paper. Buterin was previously associated with the Bitcoin Magazine news website and made a strong case for Bitcoin to create a programming language that would allow apps to be built on top of its blockchain. However, his ideas found no takers, and Vitalik set out to develop Ethereum as a smart contract platform.
Hence, the foundation was laid for Ethereum as a decentralized open-source blockchain system along with its native cryptocurrency, Ether (ETH). Ethereum was unique in the sense that one could create decentralized smart contracts that were set on automation based on the fulfilment of some predefined terms.
Interestingly, being an open-source platform Ethereum was built to intrinsically support other cryptocurrencies as well apart from ETH.
The objective of the Ethereum project was to become a global platform for decentralized applications where a person in any part of the world could write and run software immune to downtime, fraud, hacking and censorship. The Ethereum project was officially launched in 2015.
Ethereum Vs Ethereum Classic: The Showdown
In 2016, a vulnerability in the Ethereum blockchain was exploited via DAO (decentralized autonomous organization) by some unscrupulous elements. In the aftermath of this security breach, there was a rising clamour for an upgrade in the blockchain. While most developers chose to upgrade Ethereum, the original Ethereum was renamed as Ethereum Classic and still continues till date.
What is DAO?
The Decentralized Autonomous Organization, DAO, was an advanced smart contract system that was developed to nurture future DApps or Decentralized Applications on the Ethereum blockchain.
The primary objective of DAO was to prop up an ecosystem of entrepreneurs, innovators, newbie investors as stakeholders in DApps. To create a DApp, they were required to purchase DAO Tokens by exchanging Ether (ETH).
However, DAO’s “Split Function” feature was constantly abused and led to DAO’s abrupt closure in 2016. Split Function allowed investors to withdraw their support from a project and then get their Ether (ETH) back. However, in June 2016, this feature was abused when some stakeholders drained the DAO of 11.5 million ETH (worth $50 million at the time).
They exploited a loophole in the blockchain code and made the Ethereum network refund the same DAO tokens even when the transactions were not registered on the public ledger.
In a bid to thwart these attacks, the Ethereum community applied a hard fork on the Ethereum blockchain which led to the formation of present-day Ethereum, and Ethereum Classic, which is developed on the original principles of the Ethereum blockchain. What’s more, the community refunded the lost Ether (ETH) of the affected token holders to their original accounts.
Hard forking is not new to the crypto world. Present-day Bitcoin (BTC), Bitcoin cash (BCH), and even Bitcoin Cash Node (BCHN) were all created after hard forking was applied.
Currently, Ethereum Classic (ETC) still exists as the original chain since the tokens unexpectedly taken from the DAO left untouched with the exploiter. The present-day Ethereum was the chain that returned all the tokens.
Ethereum Vs Ethereum Classic: Which is better between ETH vs ETC?
We hope that by now the Ethereum Vs Ethereum Classic comparison has answered all your queries. However, you must also know that Ethereum Classic (ETC) is closer to the fundamental principle behind the Ethereum blockchain. The current Ethereum that we all know was hard forked from the original Ethereum blockchain.
However, the current valuation of ETH stands at over $3100 while its market capitalization is approx. $410 Billion which is ahead of ETC by leaps and bounds. ETH is the second most valued cryptocurrency in the world and a formidable competitor to bitcoin.