Ethereum Classic [ETC] is slowly becoming a favorite investment to many new players in the cryptocurrency space. Moreover, prominent experts such as Charles Hoskinson have taken the side of Ethereum Classic over the current version of Ethereum [ETH] that exists today.
However, this raises the question among many, what is Ethereum Classic and how is different from the Ethereum we know today? To understand this, we must go deeper into the history of the network.
In January of 2014, a Russian-Canadian programmer known as Vitalik Buterin proposed a platform known as Ethereum, pitching it as a platform that does something that Bitcoin could not. At its heart, Ethereum is a decentralized smart contract and dApp platform. It runs on its own cryptocurrency known as Ethereum and utilizes it to build and execute smart contracts and digital application.
The power of Ethereum comes from its Turing-complete Virtual Machine, a perfect playground for those wishing to create projects based on cryptocurrency. After the introduction of the ERC20 standard for token creation, the blockchain has become a positive hub of cryptocurrency development.
Foreseeing this, a group of developers set out to create the Decentralized Autonomous Organization two years after the launch of the program. However, they did not see the can of worms it was about to unleash upon the Ethereum community.
The organization was designated as being a decentralized venture capitalist fund for cryptocurrency-related projects. There was no board of directors or employees involved in the process, thus building an atmosphere for the creation of new ideas.
The DAO token sale was successful and raised $150 million. However, due to a bug in the implementation of DAO’s code, thieves were able to steal $50 million of the funds.
This led to a huge loss in the general sentiment of investors in the Ethereum blockchain, stemming from a general belief that the ETH blockchain was hacked. This threatened to destroy Ethereum itself, a project still in its nascent stages. Therefore, a majority of the Ethereum community decided to enact a hard fork, which rendered the transaction that stole the $50 million of funds invalid.
While this move resulted in the money of the investors being returned, there existed a minority chain after the split of Ethereum. They continued to maintain the immutability of the Ethereum blockchain while believing in the notion of “code is law”. These were the group of people that stayed on the chain which did not render the DAO transaction invalid.
Since then, there have been multiple changes in the Ethereum and Ethereum Classic chains. While most of the big-hitting players such as Gavin Wood and Vitalik Buterin moved to the chain known as Ethereum today, there existed a group of Ethereum community members bent on preserving the immutable nature of the blockchain.
Moreover, ETH and ETC also differ in their monetary policy, with ETH having an uncapped total supply and a fixed yearly supply. ETC, on the other hand, has a caped issuance of 230 million after a prediction of 210 million. It also does not have the capacity to move to Proof of Stake and reduces block rewards every 5 million blocks.
ETC’s claim to fame is that it has never been altered. They also claim that ETH might fork again in the future in a similar situation, and is therefore not immutable. Even two years after the event, there still exists a split. However, it is important to see what will ensue in the future and whether actual immutability will prove to be a driving point for crypto-entrepreneurs in the future.
Subscribe to AMBCrypto’s Newsletter
Source: Read Full Article