I have been fascinated by crypto for a long time now, and I enjoy sharing what I have learned about it on ToughNickel.
Ethereum Classic, or ETC, is one of the few cryptocurrencies that you can buy on Robinhood, and it has gained a lot of momentum in the crypto world. Many believe that it’s a cheaper version of Ethereum, which is one of the biggest and most well-known projects in the crypto space. But what is Ethereum Classic, really? And what is the difference between ETH and ETC?
What Is Ethereum Classic?
Ethereum Classic is a smart-contract platform. As the name suggests, it is the original version of Ethereum. In 2017, the infamous DAO hack happened. The hacker managed to abuse a smart contract and get more than 3.5 million ETH, which was worth about seven million USD at that time.
Many Ethereum users were furious about that and decided to create a new version of Ethereum where this sort of hack didn't happen. However, some people rejected the idea of undoing something that happened on the blockchain because they believed that everything that happens on a blockchain is absolute and shouldn't be changed afterward.
This difference in opinion caused the community to split. The people that wanted to undo the hack updated to a new version of Ethereum, and the people who didn't want to change what happened on the blockchain kept the old version. The old version was renamed Ethereum Classic, and the new version is now the Ethereum that we know today. ETH is a fork of ETC.
What Are the Differences Between Ethereum and Ethereum Classic?
Both networks are smart contract platforms. This means that decentralized applications can be built on them. Every transaction or smart-contract execution needs to be paid with the native cryptocurrency.
After the initial split, both networks developed individually and drifted farther away from one another. The new Ethereum was far more popular than ETC, so there were many more projects and DApps built on it. Many important crypto projects are built on Ethereum, including Uniswap, Aave, and Enjin. Classic, however, barely changed or improved after the split. I can't think of any project being built on it.
Ethereum is also planning to switch to a proof-of-stake consensus in an attempt to make transactions faster and cheaper. Classic has no plans of changing its proof-of-work protocol.
Classic has insufficient security because it became the victim of multiple 51% attacks, where one miner or a small group of miners gained control of over 50% of all mining power and use this to harm the network or change it in their favour. ETH didn't have this problem.
The new Etereum has established itself as a top player in smart-contract platforms with many users and is actively trying to improve its scalability. Classic is far behind. Its tech has barely advanced since the split and it has far fewer users than its newer counterpart.
Will the ETC Price Go Up?
In the first half of 2021, ETC gained a lot of value. This seemed out of the blue because there was no news about it that would justify such growth. Many crypto investors believed that newer investors were confusing Classic with the new Ethereum, or that they believe that Classic could reach the same price level. This could be the case because ETH repeatedly reached all-time highs in 2021.
It is very well possible that ETC will continue to rise if the bull run and hype continue. However, such aggressive and spontaneous growth isn't sustainable in the long run and is often followed by a big dip or crash. Since ETC has few projects built on it and barely any plans for the future, it seems to be a questionable long-term investment.
One thing that could be positive for the ETC price is that ETH is switching to a proof-of-stake protocol. This could be good for Classic because, after the switch, it will no longer be possible to mine ETH, which means that many Ethereum miners will need a new coin to mine. Mining ETC isn't much different from mining ETH, so it could serve as an alternative. Classic could profit from more mining power. However, there are many other cryptocurrencies that a popular to mine and are more popular than ETC, like Ravencoin and Vertcoin.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2021 Krypton Currency