The cryptocurrency chaos continues unabated.
As we all know, it started with the buzz of Bitcoin, then the blockchain, then Litecoin and Ethereum joined the party.
It’s easy for newcomers to get overwhelmed by the fact that we have more than 800 cryptocurrencies at present listed on CoinMarketCap.
I have also seen some of these newbies getting influenced by some of the old-timers in the crypto space.
And this is no exaggeration in saying that many of these old-times take advantage of the newbies.
One such chaotic case is that of Ethereum (ETH) and Ethereum Classic (ETC).
There has been a lot of confusion among relatively new people in this space about which is the original Ethereum, which one has a future, and why there are two Ethereums.
That’s why I thought of clearing off some dust and answering such questions which crypto-users might have regarding Ethereum Classic (ETC).
But before answering what ETC is, I think it is important to know about the events which lead to the creation of Ethereum Classic.
First, Ethereum Was Born
Ethereum is the brain child of Vitalik Buterin, a Russian programmer. Vitalik was an early adopter of blockchain technology and was the founder of Bitcoin Magazine.
He created Ethereum in late 2013 to do things which Bitcoin couldn’t do, and formally announced it at The North American Bitcoin Conference in Miami, USA in January 2014.
Ethereum was not built to be a mere cryptocurrency. Rather, it is meant to be a hub where you can code, run, and execute DApps and smart contracts.
Read our exclusive Ethereum beginner’s guide for more details.
Then the famous DAO attack happened.
The DAO and The DAO Attack
Two years after the Ethereum project launch, the Ethereum community thought of launching the DAO.
In short, the Decentralized Autonomous Organization (aka the DAO) was built to act like a decentralized venture capital fund for decentralized crypto projects. The idea was to make a stateless decentralized organization with no board of directors or employees but instead would use independent investors as its key actors.
In May 2016, the DAO went for a crowd token sale to fund its development. With $150 million in pocket, this stood out to be the second largest crowd sale ever held in history.
Shortly after, a flaw in the DAO’s code was exploited by attackers and more than $50 million was drained out of the DAO’s funds.
This lead to an upheaval in the crypto space, among DAO investors, and particularly among members in the Ethereum community.
Hard Decision: The DAO Hard Fork
The unfortunate event brought the DAO investors and the Ethereum community to a loss. DAO was one of the earliest and biggest applications being built on Ethereum’s platform, and it resulted in a mess.
And mind you, $50 million is not a small amount.
When this incident happened, Ethereum was in its infancy stage. Ethereum’s prices dropped as soon as the news was out.
But even though the attackers exploited the DAO code, not Ethereum’s, Ethereum still had to pay for its reputation and loss of market cap because of its relationship to the DAO.
Just to clarify through an example: Consider the Ethereum platform as the internet, and the DAO as your website. If your website gets hacked, that doesn’t mean that the internet isn’t faulty; rather, it means that there’s a flaw in your host or your website code or something. But if your website was one of the first ever created on the internet, it might make the internet look like an unsafe place.
This shattered people’s confidence in cryptocurrencies as a whole.
So the majority of Ethereum community decided that they would “hard fork” Ethereum to restore the investor’s financial loss and reputation.
A hard fork is a kind of split or divergence where the community decides they will no longer follow the same protocols on the same blockchain. Basically, a new version of the original blockchain evolves from that spot.
So a was implemented on the Ethereum blockchain at Block 192000 to refund the loss of the DAO investors. The hard fork made the hacked transaction invalid, and a new version of the blockchain was formed.
Hence, ETC (Ethereum Classic) was born.
To know more about forks, read our guide on What is a hard fork (HF)? Though this guide is for Bitcoin, the hard fork concept is the same.
What is Ethereum Classic?
The majority of the Ethereum community at that time supported the hard fork. But a minority of users were against the hard fork, so they continued on the old blockchain and called themselves “Ethereum Classic”.
Ethereum Classic’s blockchain is the same in every way with Ethereum’s until Block 192000, where the hard fork was applied.
Ethereum Classic (ETC) is also a decentralized programmable blockchain like Ethereum. And like ETH, ETC is traded on exchanges and offers the same functionality of decentralized apps and smart contracts as Ethereum (ETH). It also has the same smart contracts language called Solidity.
ETC is basically the same as ETH.
Why was Ethereum Classic created?
After the DAO attack, the original Ethereum community got divided into two troops:
- Troop I – Those who wanted to reverse the DAO attack and refund investors.
- Troop II – Those who wanted to stick to the notion of “Code is Law”.
Community members who did not support the hard fork idea continued to mine on the old version of the blockchain without upgrading its version.
Since then, both communities have diverged based solely on the versions of the blockchain they are using.
The Team Behind Ethereum Classic (ETC)
The team behind ETC usually prefers to be behind the scenes, which certainly raises some doubts. Much of the team members use pseudonyms.
And needless to say, the ETC community and its team is far smaller than the “new” ETH community.
Here are some notable key players of the ETC project:
For more details, visit here.
Ethereum Classic – Total Supply
Like Ethereum has Ether tokens as its cryptocurrency, Ethereum Classic has “Ether Classic” tokens.
Both act as crypto-fuel for their respective blockchains.
And like Ethereum, Ethereum Classic also has no fixed cap (i.e. it has an unlimited supply). And like Ether, Ether classic (ETC) will be issued at a constant annual linear rate of 0.3 times the total annual amount of Ether created in the pre-sale.
60,102,216 Ether was created in the pre-sale:
- 0.3 times 60,102,216 equals 18,030,664.8
Which comes to approx 18 million Ether Classic tokens per year.
Note: There has been talk that Ethereum Classic is going to change its monetary policy by the end of this year by fixing a hard cap of 230 million total Ether Classic tokens.
Market Cap of Ethereum Classic
According to CoinMarketCap at the time of writing this article, the total supply of Ethereum Classic is 93,699,005 ETC tokens, and the per coin price is $15.97. This puts the total market cap of ETC at $1.49 billion.
How To Buy Ether Classic (aka ETC)
Buy ETC from Changelly
Buying Ether Classic tokens directly from fiat currency is a little difficult. But you can exchange your other coins, such as BTC, LTC, or ETH, in exchange for ETC tokens. The procedure is very simple.
You will need the following things to buy ETC:
- Your ETC address where you would like to get your ETC tokens.
- Some bitcoins/altcoins to exchange for ETC.
Head toward basilpuglisi’s Cryptocurrency Exchange – Changelly and follow the steps given in this guide.
Note: Though this guide shows how to buy Ripple in exchange for BTC, the process is exactly the same to buy ETC.
Buy ETC from ShapeShift
ShapeShift is another multi-currency exchange like Changelly. It currently supports more than 30 cryptocurrencies including ETC.
Personally, I prefer using Changelly because they have better exchange rates and a better transaction history feature to track my funds, but ShapeShift is also good.
Here also you will require the following things to buy ETC:
- Your ETC address where you would like to get your ETC tokens.
- Some bitcoins/altcoins to exchange for ETC.
If you need to know the step-by-step process of exchanging other cryptocurrencies for ETC, see our guide on ShapeShift. Though this guide is for exchanging ETH for BTC, the process is the same to buy ETC.
Buy ETC from Exchanges
Below is a list of cryptocurrency exchanges that list ETC:
Ethereum Classic Wallets
- Hardware Wallets – Trezor, Ledger Nano S (I use this)
- Mobile Wallets – Jaxx (iOS, Android)
- Desktop Wallets – Jaxx (Windows, Mac OS, Linux), Mist (Windows, Mac OS, Linux)
- Web Wallets – Classic Ether Wallet
- Paper Wallets – Classic Ether Wallet
Ethereum Classic vs. Ethereum
In my opinion, this is the best video (2.5 minutes) which explains the difference between both cryptocurrencies:
So the original Ethereum is basically Ethereum Classic, and the current version of Ethereum (ETH) is basically the “new” Ethereum. In other words, ETC is the old cryptocurrency on the old version of blockchain and ETH is the new version.
Ethereum Classic Projects
As explained in the above video, there is no doubt that the new Ethereum is still the unrivaled king of smart contracts and DApps on the market. And with time, it has only grown stronger with the formation of the EEA and the latest updates in the crypto space.
But it is also a possibility that Ethereum Classic is not far behind. Ethereum Classic offers all the same features which Ethereum offers, and it would be unjust to declare it dead because it is still in the top 5 cryptocurrencies in the market.
Moreover, a few ICOs and projects on Ethereum Classic’s blockchain are enough evidence that it is indeed not dead. But these projects and ICOs have so far had a minimal impact on its market cap.
Some of the notable projects and ICOs on Ethereum Classic are:
Ethereum Classic’s Future
Whether Ethereum Classic will be left behind or become stronger is a thing that only time can tell. By watching its current market position, it looks like that it is here to stay, but it is tough to predict anything correctly in this volatile crypto market.
If you look at things from a market angle, ETC is a competitive coin. And in the last one year period from July 2016 to July 2017, ETC has grown by 1600%, which is an ample amount of profit and a number hard to ignore.
But it is also certain from the perspective of technology and use cases, if ETC has to stay in competition with ETH, then it has to innovate at the pace of Ethereum and produce partnerships like the Enterprise Ethereum Alliance.
Otherwise, Ethereum Classic will be outdated like Kodak.
In the future, it will be interesting to see how this plays out as Ethereum Classic lacks a visionary leader like Vitalik (who is on the side of Ethereum).
And needless to say that this ETC and ETH split is a classic example of how free market forces act in an open, decentralized capitalist world.
For more information on Ethereum Classic, visit the following links:
So what do you think about Ethereum Classic? Are you invested in ETC? Do let me know your thoughts in the comments section below.
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For further reading: