What is Ethereum Classic?
Ethereum classic is a decentralized open source blockchain based distributed computing platform which features smart contract functionality that was launched on July 15th, 2015.
Ethereum Classic supports a token called “Classic Ether”. These tokens can be transferred between participants and they are stored in a wallet. These tokens are also used to compensate nodes for all the computations that are performed on the network.
Ethereum Classic was split from another cryptocurrency called Ethereum. Ethereum Classic was launched to support smart contracts to run as programmed without the interference of a third-party.
How and Why was Ethereum Classic Created
The reason why Ethereum Classic (ETC) split from Ethereum (ETH) was that some members of the Ethereum community rejected the hard fork proposition on the ground that it was immutable.
Ethereum community did not know how to handle the problem of Decentralized Autonomous Organization popularly called DAO. Ethereum foundation created a venture capital called “DAO” in 2016. In less than a year, the Decentralized Autonomous Organization raised over $168 million that was meant to go to the development of smart contracts. The money was planned for smart contract development because most of the community members had seen that the emergence of Decentralized Autonomous Organization will surely help smart contracts reach its full potential.
In that same year, a paper was released by the Ethereum Foundation development team citing the vulnerabilities of the DAO system, the paper clearly stated that the money on the Decentralized Autonomous Organization could be stolen if something is not done. True to its word, in less than a year DAO was hacked and about 3.6 million Ether which was equivalent to $50 million was transferred from accounts’ of users’ to the hackers account. Smart contracts had this principle or rule that invested funds could not be removed until the 28th day. Because of that reason, the hacker could not withdraw the funds rather it was stored on DAO’s child account. Since the stolen money was still in the DAO child account, some Ethereum community members suggested they roll back the blockchain, so that the stolen Ether could be returned to the accounts’ it was stolen from. On the other hand, some suggested that rolling back the blockchain will violate the immutability and code of law of the blockchain.
The hard fork was implemented, the second group of community members that suggested that they not implement the hard fork or roll back on the blockchain continued to use the Ethereum that the blockchain was not rolled back. This was then known as Ethereum Classic.
Main Features of Ethereum Classic
- Gas: this is a mechanism that supports internal transaction pricing in the Ethereum Classic network. This mechanism is also used to prevent spam in the network and it handles allocation of resources to the incentive offered by the request.
- Die Hard: after the soft fork, this was the next system Ethereum Classic embraced. Although this system delayed the move of the Ethereum Classic network from proof of work to proof of stake, it was created to prevent transactions on the Ethereum to be adopted on the Ethereum Classic. It also made the mining of coins on the network more difficult.
- Proof of work: this system denies network attacks and other network vices such as spam on a network. The proof of work algorithm also rewards miners who solve mathematical problems with the goals of validating and creating new transactions and blocks.
- Smart Contracts and Decentralized Applications: Although, Ethereum Classic has split it still performs certain functions that were performed by Ethereum. Some of these functions are the issuing of smart contracts and also being a decentralized cryptocurrency network. These smart contracts facilitate the verification of contracts without the interference of third parties.
Difference between Ethereum Classic and other Cryptocurrencies
- The soft fork. Most Cryptocurrencies today support hard fork but Ethereum Classic does not violate the blockchain system of immutability. This is one of the main reasons that have distinguished Ethereum Classic from other cryptocurrencies.
- Use of proof of work system instead of the widely adopted proof of stake. Unlike the proof of work, the proof of stake chooses a new block Creator and he is chosen depending on his wealth or stake in the network.
- Adoption of the smart contract networks. Primarily, Ethereum Classic and Ethereum all sought to ensure that transactions are carried out without intermediaries or third parties.
Ethereum Classic Pros and Cons
- Ethereum Classic has proven to be true to the philosophy of immutability of blockchain.
- Since its split from Ethereum, it has gathered a lot of support from tech giants.
- With the help of the proof of work, miners on the network are rewarded each time a block is formed.
- Planning an attack on proof of work system is expensive compared to proof of stake. This alone makes the Ethereum Classic more secure than its counterpart.
- Transactions are verified without third parties.
- Since Ethereum adopted the Proof of Stake, Ethereum Classic does not get updates any longer from the Ethereum network.
- Most of the big investors of Ethereum before the split have all remained with Ethereum.
- Since its split, most people have referred to it as an insult and attack on the prestigious Ethereum community.
- Most people have claimed that the network is filled with scammers.