The global cryptocurrency space has a huge market of coins and tokens. Nevertheless, among them, there are invariably those that are still the preferred choice for many crypto traders and investors. Ethereum (ETH) and Ethereum Classic (ETC) are among them.
Ethereum network has received various splits into different independent blockchains. The recent one—EthereumPoW—happened after the merge. Although the Ethereum Classic has Ethereum in its name, it has features that differ from Ethereum. Before deciding which is right, it is important to understand how ETH differs from ETC. This article will share their history, differences, and other important information.
|Vitalik Buterin and Gavin Wood
|Vitalik Buterin and Gavin Wood
|Anonymity and traceability
|Ethereum transactions are pseudo-anonymous and traceable
|Ethereum Classic transactions are pseudo-anonymous and traceable
What Is Ethereum?
Ethereum is a decentralized open-source blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality. Ethereum was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. It was created by Vitalik Buterin in 2015 and is the second-largest cryptocurrency network after Bitcoin in terms of market capitalization.
The core feature of Ethereum is the use of smart contracts. These digital programs can be used to facilitate, verify or enforce the performance of a contract or agreement between two parties without needing a third party. Smart contracts are stored on the blockchain and can be written in various languages. As a result, they can be used for various purposes, from crowdfunding and managing financial assets to creating decentralized autonomous organizations (DAOs) and decentralized applications (dApps).
Ethereum also features its cryptocurrency, Ether (ETH). ETH is used to pay transaction fees and fuel the network. Transactions on the Ethereum network are secured using cryptography and distributed consensus algorithms—proof-of-stake (PoS). Ethereum also provides tools for developers to build decentralized applications. One of them is Solidity, an open-source programming language that allows developers to write code that will run on the Ethereum Virtual Machine (EVM).
What Is Ethereum Classic?
Ethereum Classic is a blockchain-based distributed computing platform and operating system that enables users to develop, deploy, and run smart contracts and dApps. These applications can facilitate business operations, manage digital assets, and handle various financial transactions. Transactions are secured using cryptography and are processed and verified by all participants in the network.
The network is designed to be censorship-resistant, trustless, immutable, and secure, allowing users to build their applications without relying on centralized third parties. Ethereum Classic also facilitates the development of decentralized autonomous organizations (DAOs) that allow collective decision-making and value exchange among stakeholders.
Unlike Ethereum, which shifted to a proof-of-stake consensus system in September 2022, Ethereum Classic remains committed to the proof-of-work (PoW) algorithm. The PoW mechanism allows miners to compete to solve cryptographic puzzles to validate transactions and create new blocks on the blockchain. In addition, it provides a decentralized virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes.
Furthermore, there is a history behind the creation of the network, often dubbed ‘Ethereum’s little brother.’
History of Ethereum Classic: The Dao Event
Ethereum Classic was forked from Ethereum in 2016 after a hard fork of the original Ethereum blockchain in response to the DAO hack. However, it maintains the original Ethereum blockchain, meaning all transactions and smart contracts before the DAO hack is still part of the ETC chain.
So what happened?
The Ethereum blockchain was attacked during the DAO hack. An unknown hacker stole $50 billion worth of DAO tokens, provoking controversy in the cryptocurrency community. Some community members felt Ethereum needed a fork to recover the stolen funds. The hard fork was done to undo the illegal transactions.
The rest felt that the blockchain’s hard fork could lead to the threat of moral hazard, which could lead to other instances of a fork. As a result, the network split into two different blockchain chains. The original chain was renamed Ethereum Classic after 87% of the community voted for the fork. Although the two blockchains took different paths, they used the same blockchain record before branching out.
The first Ethereum Classic block was created on July 20, 2016. Since then, any future updates to the Ethereum blockchain are not Ethereum Classic compliant.
Where to Store ETH and ETC?
Guarda Wallet is the perfect place to store ETH and ETC. The Guarda Wallet offers a secure and easy-to-use platform that gives you complete control over keys. You can use Guarda Wallet on Desktop, mobile, and web browsers, making it convenient to manage your cryptocurrency investments.
Furthermore, Guarda also offers a high level of security features such as multi-signature, advanced encryption technology, and backup files (that aid in easy wallet recovery).
Differences Between Ethereum and Ethereum Classic?
Since the hard fork, distinctions have formed between Ethereum and Ethereum Classic. This part of the article will compare both coins based on consensus mechanism, market supply, value, and Transaction speed and fees.
The main difference between the two protocols is the consensus mechanism. Ethereum started using the Proof of Work (PoW) mining algorithm, but it fully switched to the Proof of Stake (PoS) during the merge in 2022. On the other hand, the Ethereum Classic network still uses the PoW algorithm, and there is no plan to switch to another.
The Ethereum Classic network, like Bitcoin, has a limited max supply of 210,700,000 ETC—10x higher than bitcoin. However, the total supply is also the same amount. Ethereum network, on the other hand, has an unlimited supply of ETH, but the platform’s total supply is around 125,000,000 ETH.
Their prices differ greatly, with ETH around $1,600 and ETC around $20. This makes the value of ETH over 80% higher than ETC’s. ETH market capitalization is higher as it is in 2nd place, while ETC is in the top 20s.
Transaction Speed and Fees
Both systems can easily handle 12-15 transactions per second (TPS).
In terms of transaction fees, Ethereum Classic beats Ethereum. On Ethereum Classic, the average transaction fee is near zero. On the other hand, Ethereum’s gas fees are expensive, especially given the recent surge in network congestion. Gas fees can reach $15 and must be paid in ETH, resulting in increased demand as more tokens are issued.
ETH intends to address this issue with the EIP-4844 ‘Layer 2 Fee Reductions’ proposal for the next upgrade in March 2023—Shanghai. Ethereum developers will concentrate on enhancing transaction speed and scalability.
How to Buy, Sell, or Exchange ETH and ETC Coins
With Guarda, you can purchase both ETH and ETC with either Visa/Mastercard or SEPA and store your assets in one wallet. It supports multiple currencies. You can easily convert between ETH and ETC or other crypto assets with just a few clicks and without KYC.
To start your journey, you need to download the app on your mobile or desktop or access the wallet via the browser. Then you follow these steps:
- Create an account and save your password since we do not store it on our server.
- Some assets automatically get added to your portfolio. Still, if any of them is not there, you can simply add them. Download and store the backup file you get (again, keep it safe since it aids wallet recovery, and we do not store it in our server). You can also import existing ETH and ETC wallets.
- Buy the coins using Visa/Mastercard or SEPA transfer and confirm your transaction.
- Once they are in your wallet, you can swap ETH for ETC and vice versa or ETH and ETC for other cryptocurrencies.
Regardless of the differences in the principles of the two projects, their goal is to develop a large-scale, decentralized blockchain ecosystem that enables users to execute smart contracts without third-party interference, censorship, and fraud.
The clear winner, for now, is Ethereum (ETH) because not only is it popular among investors, developers, and ICOs, it is home to many tokens (fungible and non-fungible) and thousands of dApps. These positive aspects have made Ethereum the second-largest crypto project.
1. Which is better: Ethereum or Ethereum Classic?
When deciding which cryptocurrency is better, Ethereum or Ethereum Classic, there are a few factors to consider. Ethereum has been around since 2015, has seen more widespread use than Ethereum Classic, and has a larger market cap. Though Ethereum Classic allows for smart contract deployment, Ethereum houses more dApps. Ultimately, both are good options depending on how you plan to use them. Still, Ethereum appears to offer more features and potential for growth.
2. Does Ethereum Classic have a future?
Ethereum Classic has a promising future. However, it has faced various attacks. The third one took place in August 2020. In the 51% attack, hackers took control of the Ethereum Classic network and reorganized over 7,000 blocks. Therefore, it is likely that the security of smart contracts on the network will remain an issue in the future.
Over the years, investors have lost confidence in ETC because of the hacks that have occurred. Until Ethereum Classic tweaks its code and increases security to eliminate the possibility of future hacks, the network will face many problems.
3. What is the point of Ethereum Classic?
Ethereum Classic was created in 2016 due to a hard fork of the original Ethereum network when a group of users decided to keep the original chain and its associated values alive. As a result, Ethereum Classic strongly focuses on immutability and censorship resistance, seeking to remain true to the original vision of Ethereum. As a result, no third party can change or control the blockchain, leading to greater security and trust in the network.
4. Why is Ethereum Classic so much cheaper than Ethereum?
ETC is much cheaper than ETH for a variety of reasons. One of the main reasons ETC is so much more affordable than ETH is that it has a smaller market capitalization than ETH. The price of each token reflects this difference. In addition, the supply of ETC is also much lower compared to ETH, further contributing to the lower cost.
Additionally, the Ethereum network has more applications and uses than Ethereum Classic, making it a more attractive option for users.
5. Can Ethereum Classic replace Ethereum?
Whether Ethereum Classic can replace Ethereum has been hotly debated in the crypto world. While they both have Ethereum in their names, they differ in many ways. Ethereum Classic is a fork of Ethereum and uses a different consensus mechanism than the Ethereum network. It also has a smaller market cap and lower liquidity compared to Ethereum. However, some argue that Ethereum Classic has the potential to become a major player in the crypto space due to its lower transaction fees. Only time will tell if Ethereum Classic can replace Ethereum as the go-to platform for smart contract applications and decentralized finance.