Ethereum and Ethereum Classic are two different blockchains that both have their own unique features. While they share a common history, there are some important differences between the two networks that you should be aware of before investing in either. In this article, we’ll take a closer look at how Ethereum differs from Ethereum Classic and what these blockchains have in common.
The Story of Original Ethereum Blockchain
The Ethereum blockchain has been around for a few years.
Ethereum was initially described in a white paper by Vitalik Buterin in late 2013. He proposed that the Ethereum blockchain network could be used to build “decentralized autonomous organizations” (DAOs), which he defined as “a new form of organization that exists on the Internet and does not have a physical presence.” He published his invention in the Bitcoin community, posting his proposals on forums and sharing them via email, but without much success for the time being. Vitalik Buterin’s goal was to create a free asset transit system through the blockchain.
By early 2014, he had assembled a team of programmers who began developing the Ethereum software. The first implementation was completed in July 2015, and Ethereum was launched on July 30, 2015, with 72 million coins pre-mined.
The Ethereum Foundation (EF), a non-profit organization, was created around the same time to support Ethereum’s development and promotion.
Genesis of Ethereum and Ethereum Classic
2016 was the year when the original Ethereum split into Ethereum (ETH) and Ethereum Classic (ETC). It happened as a result of a hard fork that occurred after the DAO hack.
It was a massive hack of the network, which led to about $50 million in Ethereum coins being stolen. Everyone holding Ethereum at the time was affected as the crypto funds were stored at a single address. The situation was messy: analysts stated that the system was so flawed that it would take only basic technical knowledge to hack it; the Ethereum community was mad, the public was furious, and everybody wanted justice.
A few days later, Buterin and his team made a decision: for these coins to be recovered, new code had to be created on a revamped blockchain with its own network. Ethereum developed further — the record of the hack was erased, and those who lost their crypto got it back but on a new blockchain. The other half of the team decided to keep the original chain that contains the DAO Hack. And this is when ETC and ETH came into being.
It was the way to save the project… and it worked!
Ethereum ETH became a fresh start, with global plans to transform into the world’s first and best platform to create dApps free of fraud, censorship, and downtime. Nowadays, it is the most successful smart contract blockchain, with the second (after Bitcoin) largest market cap.
Ethereum Classic emerged from the same blockchain. It is often presented as “Ethereum’s true form,” an untampered, unaltered Ethereum blockchain. Somewhat of a conservative manifesto. ETC followers believe: code is the law. Meanwhile, the crypto community considers the Ethereum Classic blockchain to be secondary and insecure. In some spheres, ETC is even regarded as a dinosaur of cryptocurrencies, as it has fallen behind in terms of software and smart contract development capabilities.
Similarities between ETH and ETC
Despite what many people may think, ETC and ETH carry much more similarities than it seems. Even with the hard fork split, certain principles are preserved between one coin and the other. These boil down to:
- Coin logos: they were created by the same institution, so the profiles of these coins are almost identical.
- Smart contracts: both ETC and ETH are built as blockchains operating with Ethereum’s smart contracts.
- Mining: according to specialists, the sizes of blocks, the rewards for their creation, and the time invested in mining are almost identical.
- Decentralization: both Ethereum and Ethereum Classic are created as decentralized organizations and cannot be controlled by a single party.
Ethereum Classic vs Ethereum: What Is the Difference?
Ethereum and Ethereum Classic do have some clear differences after their split. Amongst them are the following:
- Market price: Ethereum’s price is much higher than ETC’s, and so is its market cap.
- Coin supply: the supply of Ethereum is entering the deflationary stage. In contrast, Ethereum Classic remains inflationary, which may affect Ethereum ETC investors’ funds.
- Mining: ETC and ETH both started with a proof-of-work consensus algorithm, but ETH is upgrading to Proof of Stake in September 2022. This upgrade (The Merge) is going to help make ETH more scalable (the Ethereum network is still plagued by scalability issues) and secure.
- Transaction fees: they are significantly higher for Ethereum. As of September 2022, Ethereum charges 0.0026 ETH per transaction versus 0.0001 ETC for Ethereum Classic.
- Success: Ethereum has a large community of investors and supporters, which makes it a much more commercially successful coin than its namesake.
- Technological advances: forking allows Ethereum to offer new alternatives for updating its code that the Ethereum Classic network does not include.
Is ETH or ETC Better? Which One to Choose for Investing?
When it comes to investing in cryptocurrency, there are various options to choose from. Two of the most popular cryptocurrencies are Ethereum and Ethereum Classic. So, which is a better choice for investing?
Neither is better than the other: the difference between Ethereum and Ethereum Classic does not determine the quality of investment.
However, we can mention some advantages and weaknesses offered by each of them. First of all, Ethereum is a coin with huge success and large market capitalization. It is the more well-known of the two cryptocurrencies, which gives it a certain level of name recognition. Additionally, Ethereum has a more robust development community, meaning that there are more projects built on Ethereum than on Ethereum Classic.
Ethereum Classic, on the other hand, has a large but limited number of coins. Its price is lower, which makes it more accessible for investors. So it might strike many as a cost-effective asset. Additionally, Ethereum Classic is not as susceptible to forks, meaning that it is less likely to experience the kinds of community splits that can reduce the value of a cryptocurrency. But, at the same time, it also employs old software code, so it is susceptible to attacks. Finally, Ethereum Classic has a longer history than Ethereum, providing more data for investors to assess its long-term prospects.
The differences between Ethereum and Ethereum Classic concentrate, in a nutshell, on the supplies of cryptocurrencies, their value, profitability, and technological advances. From these aspects, Ethereum, in some ways, seems a bit more attractive. But ultimately, it depends on the investor’s goals and risk tolerance. While both Ethereum and Ethereum Classic have potential upsides, they also come with different risks. As always, it’s crucial to do your own research before investing in any cryptocurrency.
So… What’s Next? The Future of Ethereum Classic and Ethereum
The future of crypto projects depends on technology, developer communities, and media coverage.
Ethereum Classic focuses on immutability and security. The ETC development team works hard on expanding and turning it into a global payment network.
Ethereum continues to focus on scalability. ETH has been planning to migrate to PoS since 2019, and the process is set to be completed in 2022. ETH could potentially become the dominant cryptocurrency if it can overcome its scalability issues. It has a strong team of developers working on its technology, and its community is passionate about the project.
While both blockchains have their own advantages, it is unclear which one will ultimately prevail. However, given the popularity of Ethereum and the increasing demand for blockchain technology, it is likely that both Ethereum Classic and Ethereum will continue to be successful in the future. They could potentially coexist and complement each other, with ETH Classic becoming known as the more stable and secure blockchain while Ethereum focuses on being the leading platform for decentralized applications. If you want to learn more about the coins’ future performance, you can visit our price prediction pages for Ethereum ETH and Ethereum Classic ETC.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.