This article explores the difference between Ethereum and Ethereum Classic; why do they seem similar and what are its implications? Read on to find out more.
Ethereum is a platform that facilitates the creation of decentralized applications, utilizing the power of smart contracts; pre-programmed codes that are self-executing and doesn’t require any 3rd parties to operate. Anyone can build applications on the Ethereum blockchain, which is a public, open-source ledger. The closest analogy is that Ethereum represents an app store in your smartphone. It allows any developers to create smartphone apps that users can publicly download.
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Ethereum started out as a single Blockchain (think of it as a single Lego tower that’s stacking up continuously). There are various applications that can be built on top of Ethereum, and one such application was a decentralised corporation called the DAO (Decentralised Autonomous Organization). The DAO operated like a hedge fund, essentially collecting funds to invest in the development of other applications. Unfortunately, the DAO got hacked, and a tune of over 50 million dollars was stolen. (See also: Guide on Identifying Scam Coins)
At this point, the core developers had 2 options:
- Allow the continuation of the chain, since the nature of Blockchain is that it is immutable, and cannot be altered
- Reverse the transactions to prevent the hacker from profiting from the stolen funds and returning the money back to investors
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It was unanimously agreed by the developing team as well as the majority of participants in the system to choose the second option. In order to implement the second option, a hard fork is required. A hard fork is the splitting of the original Blockchain into 2 chains; the original one and the new chain. Ethereum Classic is the original chain and Ethereum represents the new chain which is an offshoot of the original blockchain. Ethereum Classic is represented by the ticker ETC while Ethereum is represented by ETH. (See more: Coins, Tokens & Altcoins: What’s the Difference?)
The core developers, including the founder, went on and developed the new chain, and now when one talks about Ethereum they’re referring to the new chain with the ticker ETH. Those that remained with the original chain (ETC) – a small community – was ideologically opposed to any change imposed on the Blockchain, since they argued that its nature should be immutable (not prone to change). (Read also: Bitcoin’s Civil War: How and Why?)
Are there any real differences?
In terms of functionality, both chains are the same since they originate from the same chain. It is more of an ideological difference. However, it is important to take note that in terms of progress, the new chain would be more equipped with the latest updates and continual improvement of the system since the core developers are working on ETH, the new chain. From a user’s perspective it, it is vital to use a platform that has constant supervision and enhancement from the developing team. All of the core Ethereum developers are working on ETH, continually improving its protocol and paving the way forward to implement game-changing technologies based on their roadmap. If you’re a developer interested in building a decentralized application, you’d definitely want to create them on the ETH blockchain, due to its expanding functionalities and development support. (Read also: Guide to Verifying Cryptocurrency Transactions)
From a traders’ perspective, both coins can be appealing to profit from. ETC is worth much lesser than ETH, with a market price of approximately USD $15 as of July. ETC’s price is largely based on speculation, and thus it is vital for any traders or investors to understand the difference between both coins and their utility. (Read more: Dangers in Cryptocurrency Investing)
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