What is Ethereum Classic? Cryptocurrencies explained by Blockchart.io
Anyone who has displayed an interest in Ethereum will no doubt have heard of Ethereum Classic. Some confusion is natural, but main thing to keep in mind is that Ethereum Classic (ETC) and Ethereum (ETH) are two different and distinct cryptocurrencies. As a result these two cryptocurrencies are distinct from one another, although they share a common ancestry. While they share a similar functionality and core ideas, the difference lies in how the Ethereum community handled the DAO (Decentralized Autonomous Organisation) hack and the resulting fork.
What is Ethereum Classic?
Ethereum Classic is identical to Ethereum up until block number 1920000, after that ETC branched out to become its own independent cryptocurrency. A small group of the Ethereum community refused to accept the new updates introduced by ETH and as a result they continued to operate as though the updates had never happened thus resulting in a new Blockchain and a new cryptocurrency. Both ETC and ETH share the same history of transactions and balances that took place until the split, after that both cryptocurrencies act individually and as separate entities.
Why use Ethereum Classic?
Ethereum Classic still offers the same Smart Contract technology and transfer fees and rates as ETH, but its philosophy is somewhat different. A cryptocurrency relies on a Blockchain which acts as a permanent and unchangeable ledger of all transactions. This ledger is available to every user (but coded to ensure privacy) so any modifications by a single party would be immediately noticeable and corrected by the community. It is this trust-less network that allows all cryptocurrencies to function. This has led to the maxim that “Code is law,” in other words that the Blockchain must remain immutable.
Following the DAO hack on Ethereum, the community was faced with the option to either refund victims of the hack or to accept the hack. Ethereum decided to refund victims, but while this sounds altruistic there were technical issues. The main problem was that the transactions which occurred had been recorded in the Blockchain and in order to refund victims the hacked transactions had to be revoked. In order to do so, the entire Ethereum network had to agree. While the majority agreed and accepted the rollback, part of the community did not. It is this small part of the community that founded Ethereum Classic.
The main issue with the rollback is that once the blockchain has been amended to accommodate one group of people, it is hard to deny amending the blockchain once again. The whole principle behind a cryptocurrency is that the Blockchain itself is unchanging. BitCoin, the original cryptocurrency, was created as a reaction to the financial crisis of 2008 and the subsequent bailouts. It is hard to deny that Ethereum’s solution to the DAO was nothing short of a bailout. Ethereum Classic, on the other hand, stays true to the original principles of cryptocurrencies and there is a strong chance that this will give Ethereum Classic more credibility and reliability over its older counterpart.
How Ethereum Classic works
Ethereum Classic shares a lot of similarities with Ethereum, but the main distinctions are; the approach to the DAO hack and ETC does not share the more recent updates of ETH, but rather makes its own. Since then, both cryptocurrencies have developed separately. Both have taken precaution to avoid such a hack occuring again.
Among these updates, ETH will be shifting to a proof-of-stake concept, whereas ETC will retain its original proof-of-work approach. Proof-of-work relies on “miners” (essentially computing power) attempting to decrypt a complex code. Once that code is solved and verified, the block linked to it is closed and unchangeable and a new block is formed in the chain. Miners compete against each other to solve the mathematical exchange, with the only variables being luck and processing power. ETH, on the other hand will soon be adopting a proof-of-stake model, called Casper, in which miners aren’t competing but chosen to solve the code in a deterministic way, based on wealth.
How to buy Ethereum Classic
When trading Ethereum Classic, there are several platforms which you can use. It is strongly recommended that you find a service which offers the best exchange rates and an established track record to ensure safe and secure transactions. Changelly is a popular cryptocurrency exchange which has been providing the ability to instantly and seamlessly exchange over 100 altcoins at the best market rate or buy them using a bank card for over two million registered users.
It all boils down to the hard fork. Was the decision to refund victims short-sighted and result in the reduced value of ETH? Or was it necessary to keep a cryptocurrency in its infant stages afloat? Ethereum Classic represents an adherence to the principles necessary for cryptocurrencies to function. ETC has come a long way from the split and has consistently updated its software so as to compete with other leading cryptocurrencies, all while staying true to the core value of immutability which helps to make the value of ETC far stronger and reliable than other cryptocurrencies.