One of the things that every new crypto investor quickly notices is that the second largest cryptocurrency — Ethereum — is not the only coin to carry this name. The second one, of course, is Ethereum Classic (ETC). It is not an accident that there are two Ethereums out there, and they actually share a lot in common. However, despite the fact that the two have a pretty interesting story, most investors are quick to start comparing them. This ETC vs ETH debate has been going on for quite some time now, and everyone pretty much only wants to know which coin has a greater potential for the future. This is what we will explore today.
ETC vs ETH: The origins of Ethereum Classic
Before Ethereum Classic came to be, there was originally only Ethereum (ETH). It was designed to be a platform where various decentralized applications (dApps) and other cryptocurrencies can be built. It also made smart contracts into what they are today. For a time, everything seemed to be going well for ETH, until a large hacking attack was made against its network. An unknown hacker (or hackers) attacked Ethereum, and the hack resulted in $50 million lost to the attacker.
This represents one of the biggest events in Ethereum’s (and crypto) history, which later led to ETC vs ETH split. The attack used a flaw in DAO (Decentralized Autonomous Organization). In essence, DAO is a decentralized type of a hedge fund or venture capital, that was created for the purpose of funding dApp creation on Ethereum.
Funders would have the ability to invest money, which also gave them the power of choice regarding which dApps will receive the money. The DAO also had a split function, that allowed investors to exit it, and receive their investment back, in case they changed their mind. However, it wasn’t as secure as everyone believed it to be, and soon enough — a large flaw was found and exploited.
In short, this flaw allowed for multiple requests to exit the DAO, and each request received the amount of coin that an individual invested. After uncovering this loophole, an unknown hacker managed to send enough requests to receive as much as $50 million in total. Ethereum’s developers and community uncovered the flaw too late, and once they did, they started searching for a solution.
In the end, the only thing they could think of that would solve the issue quickly enough was to create a fork. That way, ETH blockchain would stop entirely, and they could create something new. This “something new” later became Ethereum as we know it today. On the other side of the fork, there remained Ethereum as it was previously, which was since became known as Ethereum Classic.
ETC vs ETH — The difference between Ethereums
Now that we know how Ethereum and Ethereum Classic came to be, let’s see their similarities and differences.
Since the split, the majority of old Ethereum’s users came to the new Ethereum (ETH). Only around 10% of the original community decided to remain “loyal”, and stick to Ethereum Classic. Even so, they are mostly in the shadows, with none of them gaining an active role on ETC blockchain.
The new Ethereum, meanwhile, became something of a software company. It aims to grow and expand, and maybe even go through additional hard forks at some point in the future. ETH blockchain’s leaders within the community also became much more vocal and supportive, which has allowed ETH to land some pretty big partnerships.
Over time, ETH continued to grow bigger and bigger, while ETC remained somewhat secretive and quiet. After the hard fork, ETC community discovered that Ethereum Classic is not backward compatible with Ethereum. This means that it cannot use new Ethereum updates, such as the introduction of Proof of Stake instead of Proof of Work.
Of course, while this poses quite an issue for ETC, Ethereum itself did not go through this ordeal without its own problems. The biggest one is that there is a possibility of additional hard forks in the future. Many have started wondering if this can allow ETH community leaders to manipulate Ethereum’s blockchain, and maybe cause additional hard forks. Obviously, the risk has affected ETH’s price negatively since then, and the price remains volatile as a result.
It is clear now that after the ETC vs ETH conflict, Ethereum gained pretty much everything. Its price is much higher than that of ETC, and it is also favored by a large majority of old Ethereum’s community. At the time of writing, ETC is valued at $10.88 per coin, while the price of ETH is at $225.25.
However, while the hard fork is seen by many as a negative event, it is possible that everything that Ethereum has achieved so far would not have happened without it. Thanks to the hard fork, ETH implemented PoS, it became the number one platform for crypto and dApp creation, and it still manages to hold onto the position of the second largest crypto. Additionally, its community is among the strongest and largest ones in the industry.
ETC, however, remains stained by the DAO incident, and many agree that the coin is slowly sinking deeper and deeper. In the end, nobody knows what will happen with ETC. The coin may quietly disappear, or it might come up with a way to get back into the game.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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Hong Kong, Hong Kong, 25th January, 2021, // ChainWire //
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Hong Kong, Hong Kong, 24th December, 2020, // ChainWire //
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