Unless you’re well-acquainted with the expansive list of altcoins, you’ve probably never heard of Ethereum Classic, the cryptocurrency that Coinbase recently announced will be added to its trading platform.
Ethereum Classic (ETC) was formed in July 2016, after a venture capital fund called The DAO built on Ethereum suffered from a hack that resulted in the loss of 3.6 million ether (~$50 million). In response to the hack, a portion of the Ethereum leadership decided to implement a hard-fork at block 1920000 to refund DAO token holders, thus creating crypto powerhouse Ethereum (ETH). However, other members of the Ethereum community did not agree with the controversial decision, and original unforked blockchain was maintained as Ethereum Classic.
Following the hardfork, the blockchains for ETC and ETH were split but offered similar features and functionalities. Both blockchains allow for the creation and deployment of smart contract and DApps (decentralized applications), in addition to the same intrinsic specifications, such as similar average block time, size and reward.
Interested in Ethereum Classic? Here’s a quick rundown of the project:
More on the Creation of Ethereum Classic
Ethereum Classic in its core essence was created as a means of deploying smart contracts exactly the way they are programmed to, without any interference from third-party actors.
However, since the hard-fork took place, the Ethereum community has been polarized into two factions — ones who support the fork and those who don’t. Both sides have put forth valid viewpoints such as bringing up the original DAO terms and conditions which state that the blockchain should remain immutable and should never be changed regardless of what the end result might be looking to achieve.
However, people in support of the fork have countered the argument by saying that such a stance is too drastic and those network participants should be given the final say on such important matters — through the use of a social consensus protocol.
What Ethereum Classic Really Offers
Ethereum Classic serves as a decentralized platform that runs smart contracts exactly as they were designed without incurring any issues related to downtime, censorship, fraud or third-party interference. Similar to ETH, Ethereum Classic has undergone multiple additional forks since 2016, addressing various areas related to security and functionality.
Some of the core features of ETC include:
- Transaction Finality: Ethereum Classic is governed by a statuette called ‘Code is Law.’ It proposes the idea that any transaction taking place on the ETC blockchain is immutable and cannot be erased or tampered with. Hence, the smart contracts which facilitate monetary dealings within the network can remain neutral and all outcomes are a result of predetermined conditions that have been agreed upon beforehand by all participating entities.
- Decentralized Governance: As is quite clear for everyone to see, centralization of power leads not only to unaccountability but can also be a source of unwanted corruption. Ethereum Classic relinquishes control established by a formalized central foundation in place of a hierarchy that is based upon the principles of meritocracy and mutual reputation.
The ETC developers have reaffirmed their stance that it will be keeping its blockchain proof-of-work, which requires miners to provide computing power to find blocks. The team believes that this is the only proven decentralization methods, and intends on working with mining hardware manufacturers to better integrate ASICs to further promote decentralization. This is in stark contrast to the ETH development, which now plans to release Casper, a proof-of-stake-based finality system, on top of a chain from the upcoming sidechain system, called a shard.
There are a number of ongoing projects in development for the ETC blockchain:
- Mantis: Node client built entirely from scratch using Scala, the programming language that supports functional programming and favors immutability.
- SputnikVM: Improvements for machine-to-machine communication using ETC, which will a lot more devices, particularly low-powered devices, to interface with ETC.
- Emerald Platform: Toolkit to build applications running on Ethereum ETC, contains UI Components and other SDKs.
- Sidechain: Sharding system that will increase ETC’s scalability.
Ethereum Classic (ETC) currently has a market cap of ~$1.5 billion, which is relatively small when compared to the $51 billion market cap of Ethereum (ETH). Ethereum Classic has a circulating supply of 100,080,282 ETH, is on most major cryptocurrency exchanges, and currently does 2x the transactions of Bitcoin Cash, making it neck-and-neck with Litecoin.
While a lot of people claim that the creation of a “double blockchain” can lead to a host of issues such as confusion among investors and casual users, many maintain that ETC is closer to the original vision of ‘Ethereum’ since it stays true to the principles of decentralization and data immutability. The addition of ETC to the Coinbase trading platforms will ultimately increase project awareness while improving liquidity and use.
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Disclaimer: The author(s) of this article may have a position in one or more of the cryptocurrencies mentioned above. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.